Ruling and Opposition Clash Over Future Response Fund... Opposition: "Slush Fund" vs Ruling Party: "Fiscal Safety Net"

Confirmation Hearing for Deputy Prime Minister and Finance Minister Nominee Lee Hyungil
Lee: "The Future Response Fund Is Not a Slush Fund... It Addresses Management of Surplus Tax Revenues"

Deputy Prime Minister and Minister of Finance and Economy nominee Lee Hyungil refuted the opposition party's criticism that the Future Response Fund is a 'slush fund' at the National Assembly's Planning and Finance Committee confirmation hearing on the 15th, stating, "I do not consider it a slush fund." The People Power Party pressed that surplus tax revenue should first be used to pay down national debt, while the Democratic Party of Korea argued that the Future Response Fund serves as a fiscal safety net in response to tax revenue fluctuations.

At the confirmation hearing for nominee Lee held at the National Assembly on the 15th, Lee explained about the Future Response Fund, saying, "The fund was considered in light of a situation where the inflow of unexpected, large-scale tax surpluses made it difficult to adjust fiscal operations flexibly." He added, "Without a buffer to accept such large-scale surplus tax revenues, all the revenue would have to be either spent entirely or used entirely for national bond repayment."

He continued, "If all the revenue is spent, it becomes difficult to reduce spending later. On the other hand, if it is all used for bond repayment, liquidity in the national bond market could decrease sharply." He emphasized, "I agree with the intention of needing such a fund."

The opposition continued its attack, labeling the government fund as a 'slush fund.' Kim Sanghun, a lawmaker from the People Power Party, criticized, "The Future Response Fund lacks a size cap or clearly defined loss responsibility, and with the Minister of Planning and Budgeting handling everything from management to review, it is a slush fund with no oversight."

Deputy Prime Minister and Minister of Finance and Economy nominee Lee Hyungil is responding to questions from lawmakers at the confirmation hearing held at the National Assembly on the 15th. 2026.09.15 Photo by Dongju Yoon

Another lawmaker from the People Power Party, Lee Jonguk, also argued during the questioning that surplus tax revenue should primarily be used to reduce national debt. He stated, "Taiwan also experienced excess semiconductor-related tax revenue, but in their case, they paid off debt first." He further pressed, "Why is the government planning to increase national debt by 106 trillion won next year while holding on to surplus resources of 104 trillion won?"

When nominee Lee responded that reducing government bond issuance all at once could dampen bond market liquidity, Lee Jonguk countered, "It seems like the government is just making excuses about market liquidity to avoid paying down debt and is hoarding the money instead." He went on to argue, "If you turn around the idea of 'flexible management,' it just means discretionary spending like a slush fund."

In response, nominee Lee explained, "The intent is not to spend all the revenue at once because once spending increases, it is difficult to flexibly adjust it in the future." Regarding a suggestion to establish a sovereign wealth fund instead of the Future Response Fund, he answered, "There are strengths to investing via a sovereign wealth fund," but added, "Since this is the first year, we need to comprehensively consider related demand and the overall situation."

The Democratic Party supported nominee Lee, arguing that the Future Response Fund is a tool to respond to abrupt fluctuations in tax revenue. Democratic Party lawmaker An Dogeol stated, "The purpose of the fund is to accumulate surplus tax revenue that arises under exceptional circumstances and to use it during future periods of tax revenue deficit."

An further argued, "If we use all of the excess tax revenue to pay down debt now, we will need to borrow again when revenue falls short." He said, "It is wise to use part of the surplus to pay off national debt and to save the remainder." He claimed that a reduced national debt ratio and an improved managed fiscal balance allow Korea to address both fiscal soundness and growth.

Oh Gihyeong, another lawmaker from the Democratic Party, also remarked that "using surplus tax revenue from a boom period to create a supplementary budget could overheat the economy, whereas using it as a fiscal stabilization device allows it to be used during revenue deficits rather than taking on new debt." He called it "a necessary institutional evolution."

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