The ruling Democratic Party and the government on Monday vowed seamless cooperation in seeking a major economic policy shift, repeating President Moon Jae-in's mantra of "people-oriented, income-led growth."

During their regular meeting, they agreed that the new administration will seek a broad change from South Korea's strategy that has hitherto focused on seeking high growth and supporting big conglomerates' exports.

"We have shared the view that we need new economic policies in line with an economic paradigm shift," Kim Tae-nyeon, the ruling party's policy chief, told reporters after the meeting.

"The party and the government will seek the economic paradigm shift with one mind while seeking to enhance people's livelihoods by swiftly executing the extra budget," he added, referring to the 11.03 trillion-won ($9.8 billion) budget approved by the legislature Saturday.

The party and government officials said that new economic policies would focus on raising household incomes, creating quality jobs, ensuring fair competition and pursuing innovative growth.

The policy focus meshes with Moon's much-publicized economic formula aimed at addressing income disparities and boosting growth by creating jobs and increasing household revenue.

Last week, during a meeting on financial strategy, Moon pointed out that his government's economic policies must be people-oriented, inclusive, balanced and transparent, and involve citizens' participation.

Meanwhile, Woo Won-shik, the party whip, stressed the need to speed up preparations for a tax reform that is expected to increase tax rates for top-earning individuals and businesses.

Woo framed the envisioned tax overhaul as a "normalization of the corporate tax and tax hike on the super-rich" as critics called it a "potential tax bomb."

The party and the government plan to hold another meeting Thursday to discuss possible increases in corporate, income and capital gains taxes that would target highest-income earners and companies.

The debate on the tax increase was reignited last week amid growing concerns about how the Moon administration will finance his costly five-year policy agenda, including creating new jobs in the public sector. (Yonhap)