South Korea's National Assembly passes law overhauling finance ministry, prosecutors' office

By Heejin Kim and Jihoon Lee

SEOUL (Reuters)<?xml version="1.0" encoding="utf-16"?> -South Korea's National Assembly passed a law on Friday overhauling government organisations including the finance ministry and prosecutors' office, live footage from the parliament showed on Friday.

The law aims to dismantle the nation's prosecution service and strip the finance ministry of its power to prepare budgets, setting up new bodies to handle such tasks.

The major overhaul is part of the efforts of President Lee Jae Myung, who said during his election campaign that some public agencies had too much power.

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The newly-formed finance ministry will be launched in January, according to the assembly. The ministry's budget office will be under the control of the prime minister's office.

The Ministry of Trade, Industry, and Energy will spin off the energy department that will be merged with the environment ministry.

The prosecution office will lose its power of investigation to a newly-created organisation while maintaining its right of indictment.

Lee's administration has vowed expansionary fiscal policy to boost economic growth, with next year's budget spending planned to rise at the steepest pace in four years.

The government said earlier this month the transfer of budget functions is aimed at ensuring a more balanced budget planning and stronger check and balance.