Park Hong-keun Proposes Future Response Fund for Extra Budgets

Park Hong-keun, Minister of the Ministry of Planning and Budget, said on the 5th that surplus funds from the Future Response Fund—to be created from excess tax revenue driven by the semiconductor boom and other factors—will be invested in stocks and bonds. The plan is to invest through asset management firms to generate returns higher than interest rates, and then use the surplus in cases of revenue shortfalls or supplementary budget arrangements.

Park explained the fund's operation method during an appearance on SBS's "Joo Young-jin's News Briefing" that day.

"The fund raised will be strategically invested in areas such as youth, growth engines, regional development, and education and talent management," he said, describing another use of the Future Response Fund.

Park said in particular, "I have a strong interest in the youth sector," adding, "We will prepare a detailed package covering everything from youth education, jobs, and asset formation to housing, childbirth and childcare, and will present it to the president and the public soon."

Regarding the size of the Future Response Fund, he explained, "We need to know how much revenue will come in next year to determine the fund's size, but we are not at that stage yet," adding, "It will be a substantial amount." He continued, "Preparation of next year's budget proposal is in the final stage of review," and added, "We will submit it to the National Assembly in early September, the Assembly will conduct a full review during the regular session, and the budget proposal for next year will be finalized in early December."

Park forecast, "This year's (total spending), including the supplementary budget, was 754 trillion won, and next year it will be 800 trillion won plus alpha," adding, "The total spending growth rate exceeded 10% during the global financial crisis, and it is projected to surpass that level." Regarding revenue, he added, "This year the plan was 390 trillion won, and next year we expect it to exceed 500 trillion won."

Concerning criticism from some quarters that expansionary fiscal policy burdens future generations, he said, "As we learned under the previous administration, using money only to pay off debt, failing to arrange supplementary budgets when needed, and pursuing tax cut policies led to a vicious cycle of austerity," adding, "If we do not invest now, we will let the golden opportunity slip away on our own."

He also reaffirmed the plan to reform the local education finance grant. "Over the past 20 years, there have been six years when the grant decreased from the previous year," he said, stressing, "Even if we reform the system, we will guarantee the existing upward trend of the grant." He added, "Rather than simply cutting funding for primary and secondary education, we will redistribute it to higher education, lifelong education, job transition education, and early childhood education."