Minister Park Honggeun Vows: "Ministry of Planning and Budget Will Lead to Prevent Taxpayer Money from Being Wasted"

Ministry-Led Forum on Expenditure Restructuring
Lively Debate on Local Education Grants, Basic Pension, and More

The government has reaffirmed its commitment to carry out the most extensive expenditure restructuring in history during next year's budget formulation by completely abolishing 10% of unnecessary fiscal projects and mandating a 10–15% reduction in both discretionary and mandatory expenditures. Long-standing mandatory spending programs—such as local education grants and unemployment benefits, which have faced criticism for being a 'waste of money' due to their failure to adapt to demographic changes like low birth rates and an aging population, despite significant tax funding—are expected to undergo major reforms.

On the 8th, Park Honggeun, Minister of Planning and Budget, speaks at the "Open Discussion on Expenditure Structure Adjustment". Ministry of Planning and Budget.

On June 8, Park Honggeun, Minister of Planning and Budget, held the 'Open Forum on Expenditure Restructuring' at SVC Seoul in Mapo-gu, Seoul, with the participation of over 100 people, including citizens, experts, civic groups, and government officials. This forum marks the first time that the fiscal authorities have hosted a public discussion dedicated solely to expenditure restructuring as its agenda. In his opening remarks, Minister Park stated, "Next year's budget bill will be the first to be fully managed by the Lee Jaemyung administration throughout the entire budgeting process," and asserted, "If we do not implement painful restructuring this year, there will be no other opportunity."

"All Projects to Be Reviewed from Scratch"...'15·10·10' Strong Guidelines Reaffirmed

The core principle for next year's restructuring, as outlined by the Ministry of Planning and Budget, is a 'review from scratch.' The government has decided to disregard any vested interests in all fiscal projects and to review each from a zero-base, aiming to reduce discretionary spending by 15% and mandatory spending by 10%, respectively. In addition, it has set a concrete goal of abolishing (sunsetting) 10% of all fiscal projects. Resources secured through these measures will be boldly reinvested in expanding the nation's irreplaceable growth engines and spreading income gains across generations, regions, and social classes.

During the forum, experts delivered sharp criticism of chronic budget waste that threatens the sustainability of national finances. Lee Junghwan, a professor at Hanyang University who presented on social, educational, and cultural topics, pointed out, "Despite a sharp drop in the school-age population, the local education grant system—linked to national tax revenue and established in 1972 to meet educational demand—continues to mechanically allocate funds, resulting in waste on various events and commemorative projects." He emphasized the urgent need to reform the grant system. Professor Yoon Dongyeol of Konkuk University also highlighted issues with duplicate recipients repeatedly claiming unemployment benefits and the 'wage inversion phenomenon,' where unemployment benefit payments exceed earnings from work, calling for a comprehensive overhaul of the unemployment benefits system.

Full Integration of Similar and Overlapping Projects...Basic Pension System Also Set for Reform

'Expenditure Restructuring Open Forum' held on the 8th. Ministry of Planning and Budget.

Calls for restructuring to improve budget efficiency continued in the economic and administrative sectors as well. Um Booyoung, a research fellow at the Korea Small Business Institute, noted, "Multiple ministries are running separate small business support projects individually, leading to severe inefficiencies and the proliferation of small-scale projects." He suggested consolidating these projects under the Ministry of SMEs and Startups and swiftly eliminating underperforming programs.

Son Jongpil, a research fellow at the Korea Institute of Local Finance, urged local governments to refrain from indiscriminately building new public facilities, emphasizing the need to relocate and repurpose existing ones. In the welfare sector, Professor Seok Jae-eun of Hallym University pointed out the widening income gap among basic pension recipients and advised that, rather than expanding coverage, the system should be restructured to provide stronger support for low-income seniors through a gradual reduction of the recipient pool.

Minister Park expressed deep agreement with these observations, responding, "The government will focus its capabilities on bold institutional reforms to ensure that mandatory spending programs, which place a heavy long-term burden on national finances, can be operated more efficiently."

"The Ministry Will Take the Lead and See This Through" ... Budget Battle Looms in the Second Half of the Year

This forum moved beyond one-way administrative announcements by expanding participation to include civic groups, the general public, and influencers, and by having the minister respond in real time to YouTube comments, thereby increasing the level of public engagement. The Ministry of Planning and Budget has announced that the feedback gathered on site will serve as the most important milestone for next year's budget formulation.

With the fiscal authorities pledging to reflect public opinion not only in the budget guidelines but also in the expenditure restructuring phase, broad-based conflicts with ministries and interest groups opposed to budget cuts appear inevitable going forward. Minister Park reiterated, "Reducing existing budgets is an extremely difficult task, akin to cutting flesh, but the Ministry of Planning and Budget will take the lead and ensure restructuring is completed so that taxpayers' hard-earned money is not wasted."

This content was produced with the assistance of AI translation services.