Kim Yong-beom's abrupt resignation as head of the presidential policy office reflects his failure to escape blame for housing policy and turmoil in the stock market, political observers said. Kim was left in place in the presidential staff reshuffle carried out on the 30th of last month, but stepped down after criticism of him mounted, largely from within the governing camp. Analysts pointed in particular to a rift between the party and the government over a property tax overhaul as a direct factor in his departure.
The property tax package that was set for review and approval at the Cabinet meeting on the 1st is seen as central to Kim's resignation. The government had been expected to submit the package to the Cabinet unchanged and send it to the National Assembly. The Democratic Party had called for revisions to a provision that would vary the tax burden on single-home owners depending on whether they live in the home, but Kim reportedly held to the position that the original plan should stand.
At the Cabinet meeting, however, the government substantially revised its earlier stance. It kept the basic comprehensive real estate tax deduction for single-home owners who do not live in their property at the current 1.2 billion won, rather than lowering it to 900 million won, and withdrew a plan to raise the cap on increases in the tax to 200%, leaving it at the current 150%. That has prompted speculation that Kim accepted the criticism from inside and outside the party and decided to resign. "As revision calls emerged inside the presidential office as well, I understand Kim dropped his position of keeping the original plan and drafted a revised version the day before the Cabinet meeting," an official in the governing camp said.
President Lee Jae-myung's call at the same meeting for the government to actively take in the views of the National Assembly and the public has also drawn attention. Ahead of deliberations on next year's budget, Lee said the government "must acknowledge that its own proposals are not always right and cannot be perfect," and asked officials to "reflect reasonable criticism and suggestions faithfully in legislation and the budget without hesitation." Because the remarks came immediately after the property tax package at the center of the party-government rift was effectively revised, some analysts see them as connected to Kim's resignation.
Analysts said blame for turmoil in financial markets, not just housing policy, also weighed on Kim's exit. After he was retained in the Cabinet and presidential staff reshuffle on the 30th of last month, some in the governing camp complained that replacing only the deputy prime minister for the economy — the minister of finance and economy — and the land minister while leaving the policy chief, the government's policy control tower, in place amounted to cutting off the tail. Others argued that a change at the policy office was unavoidable, given that the recent slide in Lee's approval rating was driven by housing policy and by measures Kim had championed, such as the introduction of single-stock leveraged exchange-traded funds.
The KOSPI, which had at one point topped 9,000 after the Lee administration took office, showed sharp volatility, falling to as low as 5,000 in intraday trading in July. With criticism of Kim growing, word that he would stay on added to unease within the governing camp, analysts said. A presidential office official said that "with the average tenure of presidential aides running from one year and two months to one year and six months, there is nothing particularly unusual about any aide being replaced," describing the move as intended to keep the administration running smoothly.
Kim was appointed the administration's first policy chief in June last year, shortly after Lee took office, and spent one year and three months coordinating economic and housing policy as well as tariff negotiations with the United States. With the policy chief replaced alongside the launch of the second Cabinet, changes are also expected in the government's livelihood and economic policies and its reform agenda.
Some observers raised the possibility of a further shake-up among senior presidential aides. If Lee's approval rating fails to rebound clearly even after the latest midsize Cabinet reshuffle, follow-up personnel changes targeting the presidential staff could accompany another round of Cabinet appointments, they said.
The opposition stepped up its attacks on Lee following Kim's resignation. Jang Dong-hyuk, leader of the People Power Party, cited the introduction of single-stock leveraged ETFs and said, "Kim Yong-beom is the tail, and the body must be President Lee." Chung Jum-sik, the party's floor leader, said the administration "has already admitted the reshuffle was a failure."
