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President calls for consolidation of 'wasteful' public institutions

Published: 14 Aug. 2025, 16:21

President Lee Jae Myung delivers opening remarks during a national fiscal savings meeting at the presidential office in Yongsan District, central Seoul, on Aug. 13. [JOINT PRESS CORPS]

President Lee Jae Myung on Wednesday called for a sweeping consolidation of public institutions, saying there are “so many that I can’t even count them.”

Presiding over a national fiscal savings meeting at the presidential office, Lee instructed presidential policy chief Kim Yong-beom to carry out a “large-scale” consolidation. The meeting was attended by budget officials from the Ministry of Economy and Finance as well as private-sector fiscal experts to discuss ways to cut government spending.

Lee’s remark reflected his belief that “public institutions run in a lax manner are a fiscal burden in themselves” and that “if there are institutions whose very existence should be questioned, bold consolidation is necessary,” according to presidential spokesperson Kang Yu-jung.

As of this year, there are 331 public institutions registered on the public institution management information system: 31 state-run companies, 57 quasi-governmental institutions and 243 other public agencies. Wasteful management in public institutions has been a recurring criticism under past administrations, but reform efforts have been slow. This has prompted the opposition to suspect ulterior motives.

Conservative People Power Party spokesperson Lee Jun-woo said, “Isn’t this an attempt to use consolidation as a pretext to simultaneously oust the heads of agencies appointed by the previous administration?”

During Wednesday’s meeting, subsidies for the coal industry were cited as an example of inefficient spending. Jung Chang-soo, head of the Fiscal Reform Institute, noted that “private coal mines are scheduled to close in 2030, but about 130 billion won [$94 million] is still being allocated annually. Coal production has been declining since 1989, but the budget has not.”

“That’s a waste of money,” said Lee. “We should stop it.”

Adjustments to welfare spending were also discussed. Woo Suk-jin, an economics professor at Myongji University, pointed out that cash support programs for children are fragmented and proposed merging them into a “basic income for children.”

“They’ve been split up so much I can’t even remember the names of the accounts,” said Lee. “When administrations change, the account names change too. Integrating programs fragmented from the supplier’s perspective into a system focused on the needs of recipients is a really good idea.”

The president also ordered a shift from the current application-based welfare system to automatic payments. “Application-based systems are cruel,” he said. “If you don’t apply, you don’t get support, which can lead to people dying.”

“With automatic payments, administrative agencies bear the responsibility of verifying and investigating eligibility,” Lee continued. “It’s crucial to set the right principles, and if necessary, we can handle it through legislation — so review it.”

Lee also instructed officials to “follow through on recovering pro-Japanese collaborators’ assets” worth an estimated 150 billion won.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY YOON JI-WON [[email protected]]