President Lee Jae-myung on the 30th replaced a large number of ministers, starting with the deputy prime minister for the economy and Minister of Strategy and Finance, who serves as the nation's economic control tower, as well as the land, justice, small and medium enterprises and startups, defense, and Ministry of Gender Equality and Family ministers. Not only sitting lawmakers from the ruling party, but also two sitting lawmakers from minor progressive parties were tapped. The presidential office created a new aide position for the "three mega-projects" worth 4,700 trillion won and appointed public officials from the Ministry of Trade, Industry and Resources and the Ministry of Climate, Energy and Environment. The aim is for the presidential office to take a tighter grip on the lead in regional development, including the 800 trillion won Honam semiconductor cluster.
This personnel move was carried out as the president's approval ratings plunged across generations following the real estate policy and stock market volatility, and the abolition of the prosecution's supplementary investigation authority. It reflects the judgment that personnel appointments themselves are the most powerful "state affairs reform message." However, with issues piling up, such as high-intensity real estate loan regulations and increases in holding taxes, supply problems, the ruling party's hard-line stance on prosecution reform, a special counsel on fabricated indictments and the president's prosecution withdrawal issue, and the question of a constitutional amendment for a second term, it is unclear whether the reshuffle will serve as momentum for a rebound in approval ratings.
◇ replacement of heads for real estate taxation and supply… financial line retained
According to a survey by pollster JoWon C&I commissioned by Straight News on the 26th and conducted on 2,001 men and women aged 18 and older nationwide from the 22nd to the 24th, positive evaluations of President Lee's performance fell 4.0 percentage points from the previous survey to 38.9%. Negative evaluations rose 3.8 percentage points to 57.9%. A Korea Gallup survey released on the 28th also showed Lee's approval rating at a survey-low 42%. Both surveys cited the government's real estate policy and stock market issues, and concerns about the expansion of police power and concealment of investigations following prosecution reform pushed by the ruling bloc, as major reasons. Within the party, a "generational encirclement theory" is being discussed, with middle-aged and older people turning away over real estate, and people in their 20s and 30s over stocks and the supplementary investigation authority.
The government will submit a tax reform plan to the National Assembly on the 3rd of next month centered on "easing the burden on dwellings for actual residence." In line with the policy stance that a house is not for "buying" but for "living," the core is differentiated taxation between dwellings for residence and non-residence for single-home owners. However, the ruling party, mindful of deteriorating support in Seoul, argues that this differentiation should be greatly reduced. It believes that tough lending regulations are severely harming genuine demand, and that raising the comprehensive real estate tax burden not only on multiple-home owners but also on non-residential single-home owners is causing shortages in jeonsei and monthly rentals. The government has expressed reluctance, saying the principle of residence-centered taxation itself could be shaken. A key official in the ruling camp said, "There is no supply measure that can immediately and completely change the game," adding, "For now, the personnel appointments are meant to send a message that we are taking public opinion very seriously."
However, the heads of the financial authorities were retained this time. With the single-stock leveraged exchange-traded fund (ETF) affair cited as a main cause of the stock market's sharp swings, the market and political circles said Lee Eog-weon, chair of the Financial Services Commission, Lee Chan-jin, governor of the Financial Supervisory Service, and Kim Yong-beom, presidential chief of staff for policy, should be held accountable. But they were not included in this round of appointments. Presidential Chief of Staff Kang Hoon-sik said, "It's not necessarily that we appoint a new Minister because of the evaluation of predecessors." The presidential office appointments were limited to filling the vacant senior secretary for AI future planning, the president's special political adviser, and the newly created mega-projects aide.
◇ Kim Seung-won, who served as co-chair of "Gongchimo," is tapped… attention on prosecution withdrawal
The selection of the justice Minister remains a political burden. There is no change in the existing line, such as abolishing the supplementary investigation authority, which faces high public opposition, and that is because nominee Kim Seung-won led the "prosecution withdrawal" of President Lee's criminal case. A former judge, Kim has steadily pushed for the complete abolition of the supplementary investigation authority as a secretary of The National Assembly's Legislation and Judiciary Committee. Former Justice Minister Jung Sung-ho had argued for caution, citing public harm, but the demands of hard-liners within the party were so strong that they were not accepted. Despite negative responses in various polls, the party and ultimately President Lee approved a bill to amend the Criminal Procedure Act in a Cabinet meeting.
Political circles are also paying attention to the president's prosecution withdrawal issue. Kim served as co-chair of "Gongchimo," a group of lawmakers within the Democratic Party aiming to withdraw the indictment in President Lee's criminal case and to push for a parliamentary investigation. In January, Kim and Democratic Party lawmakers from the Gyeonggi area held a joint press conference, saying, "The case of President Lee Jae-myung, which political prosecutors fabricated and indicted, must be withdrawn right now," and, "Even if the trial has been suspended, that does not resolve the injustice of the indictment itself. The indictment itself must be scrapped." The prosecution withdrawal issue could resurface and weigh on approval ratings.
◇ widening the field amid a "line struggle" and appointing a 1990s-born figure
On this day, President Lee nominated Basic Income Party floor leader Yong Hye-in as Minister of Gender Equality and Family and named Reform Party lawmaker Lee Hae-min as senior secretary for AI future planning at the presidential office. If they pass the National Assembly confirmation hearings, the Cabinet will also include a minister in their 30s born in the 1990s. As Lee has emphasized "pragmatism" and a "centrist" line and clashed with the old mainstream of the Democratic Party, in his second year in office he is also appointing figures from minor progressive parties to broaden the talent pool. Around the Democratic Party convention, the issue of a merger with the Rebuilding Korea Party led by Cho Kuk was contentious, and there is an assessment that appointing a Reform Party figure helped soothe the progressive camp.
At the same time, it appears the rapid pace of support withdrawals among people in their 20s and 30s was taken into account. As recent polls showed negative evaluations of the president among people in their 20s and 30s exceeding 60%, the presidential office poured 43 trillion won into next year's "youth budget" and appointed a woman in her 30s as a minister in the Cabinet. The presidential office said, "Considering that nominee Yong is a two-term young lawmaker who has spoken out clearly on the side of the socially vulnerable, such as preventing digital sex crimes and creating conditions for work-family balance," adding, "She is the right person to move beyond intergenerational and gender conflicts toward equality for all together with the younger generation."
For details on the polls cited in this article, refer to the website of the Central Election Poll Deliberation Commission.