Interest is high in the direction of administrative reorganization of Lee Jae-myung's government, which will be launched without a presidential transition committee. President Lee Jae-myung announced plans to establish a climate and energy department and separate the budget functions of the Ministry of Economy and Finance during the presidential election period.
The climate and energy department will integrate the energy policy functions of the Ministry of Trade, Industry and Energy and the climate response functions of the Ministry of Environment. The president plans to make this department a control tower for leading carbon neutrality and renewable energy transition. During the presidential election period, the president noted, “Energy transition is needed, but there is currently no dedicated energy department, and it is part of the Ministry of Trade, Industry and Energy. In the future, we need to focus our support on energy transition to address the climate crisis, so an independent department is necessary.”
The climate and energy department is expected to oversee responses to RE100 (transition to 100% renewable energy), establish carbon reduction strategies, and more. The presidential committee on 2050 carbon neutrality and green growth will be operationalized as a policy body based on public participation. The Democratic Party of Korea included this reorganization plan in its campaign pledges and announced it would promptly pursue it upon taking power.
The reorganization direction of the Ministry of Economy and Finance, responsible for economic policy and taxation/budget matters, is also a major focus. During the election, the president criticized the ministry's budget formulation authority. Within the Democratic Party of Korea, they are discussing the possibility of transferring budget and fund management functions to the presidential office or the prime minister's office, under the perception that the ministry acts as a "king" of the administration.
President Lee Jae-myung remarked on the necessity to separate budget functions, noting “In the case of finance, the Financial Services Commission has mixed supervisory and policy functions, so it needs to be separated and organized.” As a result, there is a possibility of creating organizations such as the Planning and Budget Office and the Financial Supervisory Commission.
The abolition of the police bureau under the Ministry of Interior and Safety and the expansion of the Ministry of Gender Equality and Family's functions are also being pursued. The Democratic Party of Korea has included this organizational restructuring direction in its policy book and announced it would swiftly pursue it upon taking power. The Ministry of Gender Equality and Family is planning to expand its name and functions to the "Ministry of Gender Equality and Family". President Lee said, “Gender equality is a core value that realizes an inclusive and sustainable society” and announced plans to expand gender equality policy offices in central and local governments, and increase dedicated departments.
The key is the policy's effectiveness. According to an analysis by the National Assembly Budget Office, if the Ministry of Economy and Finance is divided into the 'Ministry of Finance and Economy' and the 'Planning and Budget Office' following the revised Government Organization Act proposed by Democratic Party lawmaker Oh Ki-hyeong, approximately 47.65 billion won would be spent over five years from 2026. While hundreds of billions won in taxes will be used for the separation, it remains unclear whether the organizational restructuring will be effective.
Currently, the Ministry of Economy and Finance plays a 'control tower' role encompassing budget formulation, tax adjustments, and fiscal execution. As the new government is inaugurated, tasks like establishing economic policy directions, formulating supplementary budgets, and revising tax laws are concentrated, raising concerns that administrative power may be dispersed by pursuing organizational restructuring. In a situation of fiscal uncertainty, there are opinions that integrated management of budget, taxation, and fund operations is essential.
Aligning the terms of heads of public institutions with the presidential term is another challenge for the Lee Jae-myung administration. The intention is to structurally prevent repeated controversies over 'plugging personnel' at the end of an administration. This plan is expected to be promoted by limiting the term of public institution heads to the remaining term of the president.
Improving the transparency of public institution management is also included in the reorganization plan. Key elements include expanding the proportion of private sector members in the operations committee, securing review periods to prevent hasty decisions, and strengthening the reporting of public institutions' financial performance to the National Assembly.
Woo Seok-jin, a professor of economics at Myongji University, said, “Over the past six months since the martial law, the 'plugging' of public institutions has been severe, urging that it is a situation that needs to be addressed, even by creating a special law for normalization.” He added that the issue of blacklisting arising from mismatched terms between the president and institution heads should also be resolved, saying, “The structure where a person of opposing tendencies occupies the head position is not sustainable.”