‘Fox­conn’s US in­vest­ment bud­get may rise to U$30b’

New Straits Times - - Business -

The gov­ern­ment wants to raise more rev­enue to cover ris­ing so­cial wel­fare costs as a rapidly age­ing pop­u­la­tion cre­ates long-term prob­lems for South Korea’s econ­omy.

South Korea is set to be­come a su­per-aged so­ci­ety by 2026, and has the fastest-ris­ing av­er­age age among the Or­gan­i­sa­tion for Eco­nomic Co-oper­a­tion and De­vel­op­ment coun­tries.

A su­per-aged so­ci­ety refers to na­tions where peo­ple of 65 years or older make up at least 20 per cent of pop­u­la­tion, ac­cord­ing to the United Na­tions.

Boost­ing house­hold in­come is also an ur­gent task for the Moon ad­min­is­tra­tion, as wages have failed to keep up with cor­po­rate earn­ings.

House­hold in­come as a pro­por­tion of ag­gre­gate cor­po­rate in­come fell to 62.1 per cent last year and has fallen steadily from 69 per cent in 1995, gov­ern­ment data shows.

The ra­tio of house­hold debt to dis­pos­able in­come is rock­et­ing to­wards 190 per cent, as weak in­come growth pushes Kore­ans to bor­row more for hous­ing and liv­ing ex­penses.

The gov­ern­ment is count­ing on an 11 tril­lion won sup­ple­men­tary bud­get ap­proved last month to sup­port pri­vate con­sump­tion this year as cor­po­rate in­come fail­ing to flow to house­holds drags on growth.

To fund such spend­ing and re­duce in­come in­equal­ity, the gov­ern­ment plans to broaden its rev­enue base by tak­ing more from the af­flu­ent and less from the poor.

An in­come tax rate of 42 per cent will kick in on per­sonal earn­ings ex­ceed­ing 500 mil­lion won a year start­ing next year, up from 40 per cent cur­rently. Reuters earn­ings in the first half, has been on a roller coaster ride this year, with prices trad­ing between US$53 and US$95 a tonne and now just un­der US$74.

Rio Tinto’s full-year div­i­dend is typ­i­cally weighted to­wards the BEI­JING: Fox­conn chair­man Terry Gou is con­sid­er­ing tripling his United States in­vest­ment bud­get to US$30 bil­lion (RM128.54 bil­lion), said Pres­i­dent Don­ald Trump while out­lin­ing “of­frecord” re­marks made by the bil­lion­aire founder of Ap­ple Inc’s big­gest man­u­fac­tur­ing part­ner.

Fox­conn Tech­nol­ogy Group, the main assembler of the iPhone, un­veiled last week plans to build a US$10 bil­lion dis­play plant in Wis­con­sin, hir­ing as many as 13,000 peo­ple for a project Trump touted as a vic­tory for his “Amer­ica First” ef­fort to brings jobs back to the US. That was just the be­gin­ning, the pres­i­dent told small-business lead­ers dur­ing a gath­er­ing at the White House on Tues­day.

“They’re go­ing to spend US$10 bil­lion. But he is one of the great busi­ness­men of our time,” said Trump. “And I think the num­ber is go­ing to be US$30 bil­lion.”

“He told me off the record he thinks he may go US$30 bil­lion. Think of this. He may go US$30 bil­lion in­vest­ment, but he told me that off the record so I promised I wouldn’t tell any­one,” he said to laughs from the au­di­ence. Bloomberg sec­ond half, which could see an even greater pay­out, given the com­pany is sched­uled to re­ceive pay­ment of US$2.69 bil­lion for the sale of its coal & Al­lied di­vi­sion in Australia to Yan­coal Australia. Reuters

BLOOMBERG PIC

South Korea’s Pres­i­dent Moon Jae-in rul­ing Demo­cratic Party may face par­lia­men­tary ap­proval test as it only holds 40 per cent of the 299 seats in the Na­tional Assem­bly.

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