[fn Plaza] The next year is crucial in this election-free zone

The results of the 9th nationwide local elections and the by-elections for National Assembly seats, held on the 3rd, will be announced on the 4th. Lee Jae Myung will mark his first anniversary in office that day. The vote will serve as an assessment of the administration's performance over the past year. In a democracy, elections confer legitimacy on power. The most authoritative judgment comes from voters. There are good reasons to pay attention to regular polls on government approval. Neither the president nor the ruling and opposition parties can defy public sentiment. It is only natural that the aftermath of an election shakes the political landscape.
Whatever the outcome, Lee will enter his second year in office. Over the past year, he has delivered a number of results. The broad assessment is that he restored stability by removing the intense chaos, division and uncertainty that engulfed society after the declaration of martial law. On the foreign policy front, he also performed relatively well in tariff and security talks with Donald Trump, who is widely seen as unpredictable. Relations with Japan have improved as well. Economic results have also been notable. The KOSPI, which stood at 2,770 when he took office, is now approaching 9,000. Exports have continued to rise even amid the Middle East War. On the back of these achievements, the president's approval rating has remained in the 60% range. If the ruling party's local election strategy amounted to saying, "We have Lee Jae Myung," that says enough.
But the election event is over. Delayed economic and political issues now have to be addressed. The political honeymoon is effectively over as well. This is the time to compete on ability alone.
The most immediate economic policy variable is real estate taxation. The key issue in the Seoul mayoral race was housing supply. The debate centered on whether to emphasize the private sector or prioritize public provision. Both parties avoided speaking in detail about property taxes, fearing a backlash from voters. That changes after the election. Lee has repeatedly stressed the need to stabilize home prices through social media, while also suggesting that "taxes can be used as a last resort." He has not, however, specified whether taxes would be raised, who would be targeted, or by how much. Lee will want to be remembered as the president who brought home prices under control. He may therefore consider a card that increases the tax burden on single-home owners. If the final decision is to raise taxes even on single-home owners, public sentiment could swing sharply. It is a variable that could unsettle the administration as it enters its second year.
A policy issue that has recently risen to the top is how to address excess tax revenue. Public attention has also been heightened by the wage bonus dispute at Samsung Electronics Co., Ltd. and its labor union. If the improved earnings of Samsung Electronics Co., Ltd. and SK hynix continue for three years, corporate tax revenue alone could reach about 400 trillion won. Income tax from highly paid semiconductor workers would also rise sharply. That would create an unprecedented windfall in tax revenue. When resources are scarce, everyone focuses on one issue. When they are abundant, disputes are inevitable. A recent example is the disagreement between Kim Jung-kwan, Minister of Trade, Industry and Resources, and Kim Young-hoon, Minister of Employment and Labor (MOEL). Kim Jung-kwan prioritized "productive reinvestment" for future competitiveness, while Kim Young-hoon emphasized "shared growth" to reduce polarization. Social conflict could intensify during the process of public debate. If the government fails to reach a smooth social consensus, this will become an issue that burdens the administration and the ruling party politically for a long time.
The handling of the Special Prosecutor Act for Dismissal of Prosecutions is the biggest political issue. On the 6th of last month, the Democratic Party of Korea, through floor leader Han Byung-do, said it would decide on the content and timing of the bill after the June 3 local elections. The bill would allow the dismissal of prosecutions in Lee Jae Myung's case, and it was a temporary pause after signs emerged that pushing it forward could trigger an election backlash. The real battle begins now that the local elections are over. There could be clashes not only with the opposition over removing the authority to dismiss prosecutions, but also within the Democratic Party of Korea itself.
Back in April, when even the candidates for the local and by-elections had not yet been decided, I met a Democratic Party of Korea official from the pro-Lee Jae-myung faction and asked about the party's local election strategy. The answer at the time was unexpected. "We are focusing more on the strategy for the year after the election than on the local election itself," the official said. I also remember the remark that this was the period that would determine the success or failure of the government.
For the time being, there are no political conditions like a nationwide election. There will be no election until April 2028, when the 23rd legislative election is scheduled. Taking nomination schedules and other political timetables into account, the next year or so is effectively an "election-free zone." It is a period that could be called the right time for reform. That is a favorable condition for the government and the ruling party. Even so, real estate taxes, excess tax revenue and the Special Prosecutor Act for Dismissal of Prosecutions remain highly volatile issues. The process of handling these three variables could shake the government's and the president's support base. They should not be satisfied just because the election results look good. Public sentiment shows direction through elections, but that does not mean it has granted unlimited authority to reshape laws and institutions. What comes after the election matters more.
mirror@fnnews.com Reporter