KOREAN FINANCE MINISTER SAYS TAX BREAKS WILL CREATE JOBS.

SEOUL, Feb 2 Asia Pulse - Finance and Economy Minister Kim Jin-pyo said Friday that tax breaks will create jobs by making it easier for businesses to hire new workers.

Speaking on a radio talk show on KBS, the official said that he expected the latest measures to act as a sufficient inducement since a company hiring an employee for 20 million won per year can receive a fourth of the cost in the form of various supports.

He said that small- and medium-sized businesses and the service sector will be the main beneficiaries of the policy, which will be continued for three years.

The policymaker, who concurrently holds the title of deputy prime minister, added that cutting excise taxes for most consumer products was designed to help businesses raise their competitiveness, which can lead to more profits. This in turn, he said, will mean more investments and hiring.

Related to this, Kim said that adopting a "wage peak" system was being considered as a means to allow companies to retain elderly workers on the payroll without the burden of pay hikes above a certain level. He said, however, that although the government could consider tax breaks for companies that adopt this system, no specifics have been discussed.

The country's top economic policymaker said that despite criticism that the government was putting the country in jeopardy by running a budget deficit, such a move was advocated by the International Monetary Fund, which had actually advised an aggressive fiscal policy to bolster the sluggish economy.

"Last year the budget deficit was 0.2 percent of the budget, or about 800 billion (US$683 million) won," he said, arguing that even if this ...