Blue House: "Future Response Fund Not Permanent... Projects Planned Over 3-4 Years"

Concerns Over the Future Response Fund Being Treated as a Slush Fund

Blue House: "It’s Not at the Government’s Discretion"

Debt Repayment and Reduced Bond Issuance Planned for Next Year

The Blue House stated regarding the government-led Future Response Fund, "We do not consider it a permanent fund," adding, "We expect to structure projects with a timeline of three to four years, so they can yield results."

On August 26, in a press briefing at the Chunchugwan, a Blue House official made this remark in response to a question: "Isn't the wide scope of the Future Response Fund essentially allowing the government to design its plans as it pleases?" The official clarified, "The Future Response Fund is not structured so that additional tax revenue is permanently accumulated," and continued, "Within a limited period, the government will execute projects after considering areas where we want to focus our efforts."

Regarding the decision to set the amount that does not require reauthorization from the National Assembly at 30% of the total, according to the National Fiscal Act, the official acknowledged, "There is an aspect where the government has broad discretion over allocation." However, the official added, "I believe there will be further discussion during the parliamentary deliberation process," and emphasized, "Since execution is limited to the allocated scope, it is not as if the government can do whatever it wants."

In connection with this, the official offered the example: "Consider the graphics processing unit (GPU) project." He explained, "Suppose we need to purchase GPUs, but prices surge and we can't buy them with the budgeted amount. If fund adjustment allows such purchases, doesn't that enable us to respond efficiently? The fund is being established for the swift execution of projects that face sudden urgent demand."

Explaining the purpose of the Future Response Fund, the official noted, "There have been times when we collected significant tax revenues, but when they came in, they were used up quickly," and added, "In years like 2023 and 2024, when tax revenues fell short, expenditures were frozen, reducing government spending." The official went on to stress, "This initiative began out of concern that using more when revenues are high and less when they are low does not reflect responsible fiscal management."

The official further commented, "Both this year and next year, we anticipate unexpectedly large tax revenues to come in next year," and continued, "To ensure responsible fiscal management, we intend to create the Future Response Fund and invest it appropriately when the time is right."

In response to some calls that additional tax revenue should be used to pay down debt, the official countered, "If we do so next year, what about the year after that? We can't be sure additional tax revenue will keep coming in, and if tax revenue falls short, we'd have to issue even more government bonds. That wouldn't necessarily lead to stable national debt management, either."

Additionally, the official stated, "We will likely see a significant reduction in national debt levels," and added, "Even while drafting a supplementary budget, we paid down some debt this year. We plan to do so next year as well." The official concluded, "Next year, we plan to issue fewer government bonds. Consider that repayment, if you'd like."

Meanwhile, on the nation’s economic growth forecast this year, the official said, "We will probably be able to achieve 3% growth," and predicted, "I think we could even slightly exceed the potential growth rate." The official emphasized, "If we miss this opportunity, where else can we boost the potential growth rate? The government cannot step back from responsible fiscal policy now."

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