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bassexpander
Joined: 13 Sep 2007
Location: Someplace you'd rather be.
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 Posted: Tue Mar 25, 2008 3:23 pm Post subject: Hagwon prices put under stricter controls due to inflation |
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Does anyone have any additional details on what exactly happened to hagwon fees?
http://www.koreaherald.co.kr/NEWKHSITE/data/html_dir/2008/03/26/200803260047.asp#top
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52 items under price controls; tariffs reduced
The Ministry of Strategy and Finance yesterday released the list of household necessities whose prices the government intends to keep under tight control.
The list consists of 52 items that are most frequently bought by households in the bottom two income groups and take up large proportions of their overall expenditures, ministry officials said.
They include flour, "hagwon" (private education institutes) fees, instant noodles and utility charges. The bottom two groups account for 40 percent of the country and their average monthly income is less than 2.47 million won ($2,477).
The National Statistical Office is to monitor the price of the listed items at a 10-day interval and a dedicated taskforce is to analyze trends in prices each month following the release of NSO's monthly consumer prices index report, according to the announcement.
The Finance Ministry also said yesterday it plans to cut import tariffs placed on a list of items in an effort to slow inflation. The ministry said that it will remove the tariff placed on 69 items, including corn and wheat, imported to be processed.
The ministry will also lower the tariff placed on gasoline, diesel, kerosene and heavy oil from the current 3 percent to 1 percent. However, the tariff placed on crude oil and liquefied natural gas will be maintained at the current level due to the large impact a tax cut for the items will have on government revenues, the ministry said.
Ministry officials said a 1 percentage-point cut in tariffs on crude and LNG will lead to a 500 billion won reduction in the government's annual tax income.
The government also plans to expand the list of items that are subjected to the tariff rate quota system to 82 from the current 46. The tariff rate quota system is a taxation method that allows a certain amount of specified goods to be imported at reduced duty rates.
The ministry also said that the expansion of the tariff rate system will bring tax benefits worth 600 billion won and that it will have the effect of lowering overall consumer prices by 0.1 percentage point.
By Choi He-suk
([email protected]) |
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TexasPete
Joined: 24 May 2006
Location: Koreatown
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| Posted: Tue Mar 25, 2008 4:42 pm Post subject: |
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So the government is planning on spending a ton of money bailing people out over the next year, reducing import tariffs (and the money it brings in), and introducing price controls on the crappiest food in the country all in effort to jump start the economy and avoid inflation? Something seems wrong here. I vaguely remember from econ that price controls do the opposite of the intended effect leading to shortages and black markets. Also, increasing tariffs on certain imports seems counter to the FTA stuff and likely to hurt the exports here if certain countries decide to respond reciprocally.
Can someone who knows a thing or two about economics explain if these policies will work or if this is the beginning stage of Lee Myeon Bak running this country into the ground? |
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