Lee Jae-myung moves to overhaul government to fund campaign promises

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Lee Jae-myung moves to overhaul government to fund campaign promises

Published: 05 Jun. 2025, 09:18 Updated: 05 Jun. 2025, 17:58

Audio report: written by reporters, read by AI

Lee Jae-myung is sworn in as the new president of Korea at the National Assembly in western Seoul on June 4. [NEWS1]

The presidential office is pushing forward a structural overhaul of the government that includes creating a new post for a fiscal planning secretary tasked with overseeing the government’s finances.

The move is aimed at securing stable funding for President Lee Jae-myung’s campaign pledges and expanding the office’s role in the budget formulation process, which is currently led by the Ministry of Economy and Finance. Another proposal under serious consideration is to establish a ministerial-level trade adviser to serve as a command center for economic security.

According to multiple senior figures within the ruling bloc on Wednesday, the presidential office is pursuing a reshuffle centered on gaining greater budgetary control and responding to economic security challenges. Among the new roles, the fiscal planning secretary, a Grade-1 presidential official placed under the presidential chief of staff, is drawing particular attention. The post was created under the Moon Jae-in administration but abolished under the Yoon Suk Yeol administration.

Unlike the deputy chief of staff for economic affairs, who oversees overall economic policy under the policy chief, the fiscal planning secretary reports directly to the chief of staff — a position that reflects the president’s direct influence. The new secretary is expected to review the costs of President Lee’s key policy initiatives and coordinate the allocation of national resources from a macroeconomic perspective.

“This post stands in contrast to the Ministry of Economy and Finance, which only focuses on fiscal austerity,” a ruling party official said. “In order to push the president’s agenda, there needs to be a check on the ministry’s budget-cutting tendencies.”

Lee’s key pledges are expected to cost about 210 trillion won ($154 billion) over five years. Even before his election, Lee’s aides held multiple discussions with lawmaker Lim Kwang-hyun of the Democratic Party (DP) — a former deputy commissioner of the National Tax Service — to explore ways to secure funding without raising taxes, including adjusting tax expenditures and intensifying tax collection on arrears.

Korea's bourse Kospi closes at 2,770.84, up 2.66 percent from the previous trading day, on June 4, President Lee Jae-myung's first day. [NEWS1]

The restructuring is also tied to Lee’s campaign pledge to separate the budget authority from the Finance Ministry. While Lee said in a press meeting on May 25 that the budget function should be separated, he did not clarify where the responsibility would be transferred.

“There is indeed discussion of dividing the Finance Ministry into a Ministry of Economy and an office overseeing planning and budget, and relocating budget authority to the presidential office,” said a DP official. "But if this happens, the presidential office would have to bear full responsibility for fiscal policy.”

Some observers have likened the revival of the fiscal planning secretary to the White House’s Office of Management and Budget (OMB) in the United States. Unlike Korea, the U.S. Congress has budget authority, but the White House submits the president’s budget proposal through the OMB to provide a counterweight.

Plans are also being considered to create a trade adviser — equivalent to a minister — as a central figure in managing economic security. The current role of the third deputy director of the National Security Office, who handles economic security and holds vice ministerial rank, would be upgraded to ministerial level and granted full authority over trade matters.

President Lee Jae-myung takes part in a luncheon with leaders of both opposition and ruling parties on June 4 at the National Assembly in western Seoul. [JOONGANG ILBO]

The urgency of this move reflects the need to respond swiftly to anticipated tariff negotiations with the Donald Trump administration in the United States. Kim Hyun-chong, former trade minister, is reportedly being considered for the role. This plan is also in line with the ruling bloc’s broader proposal to restructure the Ministry of Trade, Industry and Energy by expanding its trade functions into a dedicated economic security agency.

Lee’s campaign pledge to appoint a chief secretary for AI policy is also connected to another structural overhaul: renaming the Ministry of Science and ICT as the Ministry of Science, ICT and Artificial Intelligence, and allowing the minister to concurrently serve as a deputy prime minister.

“The comprehensive restructuring of government ministries would take considerable time due to the need for legislation and confirmation hearings,” a ruling party source said. “That’s why the presidential office is being reorganized first to clearly set the direction of the Lee Jae-myung administration.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY YOON JI-WON [[email protected]]