The Democratic Party of Korea will seek to amend the law to separate the fiscal sector of the Ministry of Economy and Finance immediately after winning the presidential election on June 3. Specific plans will undergo further discussions, but they are considering transferring the budget authority of the Ministry of Economy and Finance to the Presidential Office or the Prime Minister's Office. This decision follows the judgment that the Ministry of Economy and Finance, holding budgetary power, reigns over other ministries, and they intend to drastically reduce its authority by revising the Government Organization Act.
◇“One-point reorganization, swiftly divide authority”
Democratic Party lawmaker Jeong Il-young and others from the National Assembly's Strategy and Finance Committee held a 'government ministry reorganization forum' at the National Assembly on the 28th. At this meeting, rather than a massive reorganization of ministries, the prevailing opinion was to only address the Ministry of Economy and Finance using a 'one-point' approach. Given that the presidential impeachment resulted in an early election, the new government must launch immediately without a transition committee.
Lawmaker Jeong said, “We are in a situation where we have to get to work immediately after the election,” adding, “First, let's discuss the reorganization of the Ministry of Economy and Finance, and then expand to other ministries in the second phase.”
Lawmaker Kim Tae-nyeon referred to the presidential election held due to the impeachment of former President Park Geun-hye in 2017, saying, “At that time, there was a strong demand for the reorganization of the Ministry of Economy and Finance, but we couldn't act due to time constraints. The Ministry of Economy and Finance has become accustomed to a past pattern of 'control and management.' It needs to change to match the altered economic circumstances.”
Lawmaker Oh Gi-hyung stated, “The powerful Ministry of Economy and Finance does not take responsibility for unprecedented revenue shortfalls or policy failures,” emphasizing, “We need to quickly divide the budget function and the treasury function, while further discussion is required for the remaining parts.”
To this end, Lawmaker Oh introduced a government organization bill proposing to divide the Ministry of Economy and Finance into a 'Planning and Budget Office' and a 'Ministry of Finance and Economy' under the Prime Minister's Office.
Concerns were also raised about the lax organizational management of the Ministry of Economy and Finance. Lawmaker Park Hong-geun stated, “Other ministries are cautious of the Ministry of Economy and Finance due to budgetary authority, yet the Ministry's personnel have increased by 24% since its launch in 2008, which aimed at enhancing policy efficiency,” and added, “The common view among the Democratic Party's Strategy and Finance Committee is that the Ministry of Economy and Finance's functions must be reorganized for more efficient approaches to various government agendas.”
◇Presidential Office's policy office, review of transfer to Prime Minister's Office
At the forum on that day, proposals were made to transfer the budget authority of the Ministry of Economy and Finance to the ▲Presidential Office's policy office ▲the Planning and Budget Office under the Prime Minister's Office. However, opinions on specific plans varied among committee members and professors.
Professor Ha Tae-su of Kyonggi University suggested separating the budget office and the economic policy bureau of the Ministry of Economy and Finance into a 'Planning and Budget Office' under the Prime Minister's Office. This is similar to Lawmaker Oh's proposal.
Professor Ha stated, “If we send the Budget Office to the Prime Minister's Office, the government can secure overall policy coordination.” He also pointed out that if the economic policy bureau of the Ministry of Economy and Finance is under the Prime Minister, it will gain a long-term perspective for policy establishment. He further suggested that the remaining organization, including fiscal functions, should be made independent as the ‘Ministry of Finance.’
On the other hand, Professor Park Sang-in from Seoul National University proposed transferring budget responsibilities to the Presidential Office's policy office to strengthen accountability for the budget. In countries that adopt a presidential system, budget functions should be assigned to the Presidential Office instead of the Prime Minister's Office. He suggested abolishing the Ministry of Economy and Finance and establishing a new 'Ministry of Finance' (foreign exchange, international finance, treasury, accounting, private investment, taxation, tariff) and a 'Chief for Fiscal and Budget' under the Presidential Office's policy office.
Jeong Chang-soo, head of the National Budget Institute, also stated, “We must separate and check powerful ministries like the Ministry of Economy and Finance and ensure the President makes policy decisions for the new government to succeed.”
◇“If the Presidential Office holds budget authority, who will provide checks?”
However, there were also calls for caution regarding the reorganization of the Ministry of Economy and Finance. Concerns were raised that the reorganization of government departments could deteriorate into 'intimidation of the Ministry of Economy and Finance' or that the President would exercise unchecked authority.
Professor Ha pointed out, “If the budget functions are transferred to the Presidential Office, who will provide checks if the President dominates the budget?” He noted, “I understand the frustration the Democratic Party has over the budget, but restraint is also necessary when in power.”
Regarding the Ministry of Economy and Finance's refusal to accommodate the Democratic Party's demands for increased funding, it was noted that “it is the bureaucrats’ duty to prevent the political realm from implementing populist policies,” adding that “bureaucrats believe that this is protecting the national interest.” He specifically emphasized, “If you try to solve the problem only through organization, both the organization and personnel can fail.”
Lawmaker Ahn Do-geol, a former Vice Minister of Economy and Finance, said, “The planning and strategic functions operate significantly in unseen ways,” and stressed, “The reorganization of the Ministry of Economy and Finance is related to national strategy, so it must be handled delicately.”
Meanwhile, the Democratic Party's forum on the reorganization of the Ministry of Economy and Finance was held just one day after Lee Jae-myung was confirmed as the party's presidential candidate following a nationwide primary.
The candidate stated to reporters after finishing the metropolitan area, Gangwon, and Jeju primaries held the previous day at KINTEX in Ilsan, “I agree with the criticism that the Ministry of Economy and Finance is acting like the overlord of government ministries.” He also pointed out that “the excessive concentration of power in the Ministry of Economy and Finance poses a risk of abuse,” stating, “I will present detailed plans regarding the reorganization later.”