SEOUL, KOREA - This week’s ministerial meeting on prices was held on February 23, with a focus on ways to curb increases in public service charges by local governments. The meeting also covered issues related to gasoline prices and preschool education fees.
To encourage local governments to maintain low public service charges, the government will increase financial support considerably from 60 billion won allocated in the original budget to 100 billion. On top of that, local governments that keep their public service fees low will be given preference when they bid for national projects such as those for restoring rivers or building sports facilities, as the government will consider the level of the local governments’public services fees when deciding on winners. Local governments can currently bid for 24 national projects worth a total of 520 billion won. The government is mulling various ways to give benefits to local governments that persistently make efforts to stabilize their public service charges, including advantages when they bid to host national or international events.
As oil prices are continuously high with uncertainties from Iran and unrest in the Middle East, the government will renew its efforts to minimize the effect from any changes. There will be more gas stations with low prices where customers fill their own tanks as well as those that jointly purchase gasoline to cut costs. An electronic market for oil trading, which is scheduled to open at the end of March 2012, will serve as a basis on which domestic oil prices will be set by the market instead of volatile international oil prices. In addition, the government is considering easing terms in purchase contracts between oil producers and gas stations, which oblige gas stations to make 100 percent of their oil purchases from the oil producer. The government will prepare various contingency plans as long as forecasts for oil prices remain uncertain.
To help lower education fees for preschoolers, daycare support will be given for children who are aged 2 years old or younger, while 5 year old children will be provided with support for nursery school fees, regardless of their families’income level. If private nursery schools freeze their tuition fees, they will be supported with monthly government subsidies of 250,000 won per class as operational support, 460,000 won per teacher in charge and 350,000 won per teacher not in charge. To prevent unfair tuition increases through so-called special programs, private nursery schools will be required to publicize detailed fee information from April 2012, and update it annually. As the fee ceiling of private nursery schools is decided by local governments, the government will work with local governments to stabilize the ceiling. There is a possibility that fees for daycare centers and nursery schools will rise due to increased demands from the effect of the government’s childcare support. To match supply and demand, the government will ease regulations on the size of childcare facilities, making larger ones possible.
