Park Honggeun: "Reviewing Firefighting Funding Measures... Discussion During National Assembly Budget Review"

"Comprehensive review of the impact of the individual consumption tax and local governments' fiscal capacity"

Minister of Planning and Budget Park Honggeun said on Wednesday, regarding the reduction in state funding for firefighting, “During the National Assembly’s review of the budget bill, we will take a comprehensive look at the impact of the individual consumption tax, local governments’ fiscal capacity, and the adequacy of central government support, and consider what needs to be addressed.”

Minister of Planning and Budget Park Honggeun speaks about the 2027 youth employment budget at a job site visit meeting held at Medintech in Jongno-gu, Seoul, on October 19, 2026. Photo by Kang Jinhyung.

Visiting the press room of the Ministry of Planning and Budget at the Government Complex Sejong on Wednesday, Park said, “It is the government’s responsibility to create an environment where those who have sacrificed and devoted themselves to the country and its people can perform their duties more safely.”

Following a recent factory fire in Bucheon, Gyeonggi Province, in which Fire Lieutenant Kim Jinseok died in the line of duty, remarks by Gyeonggi Province Governor Choo Mi-ae during a parliamentary audit that “firefighting seems like the biggest fiscal drain” have sparked controversy. Public interest in firefighting finances has since risen.

Firefighters became national government employees in 2020, but local governments still shoulder most firefighting expenses, including personnel costs. According to the National Assembly Research Service, state funding accounted for just 11.4% of the KRW 8.5949 trillion in firefighting budgets nationwide this year. That share is expected to decline further next year. The Fire Safety Grant Tax is funded by 45% of the total individual consumption tax collected on tobacco, and tobacco consumption continues to fall. According to the Ministry of Planning and Budget’s 2027 budget proposal, the Fire Safety Grant Tax is set at KRW 760.5 billion for next year, down KRW 289.7 billion (27.6%) from this year’s budget of KRW 1.0502 trillion.

“It is true that the financial burden on local governments has grown as the total individual consumption tax has fallen with the recent decline in tobacco consumption,” Park said. “I understand that the ruling party is also reviewing various proposals, and the government strongly agrees that this issue needs to be examined closely in light of the public concern it has raised.”

The government plans to coordinate among ministries on specific measures to shore up funding. “Internal discussions have not yet reached a conclusion, and we will need to examine this issue with the presidential office (Cheong Wa Dae), the Ministry of the Interior and Safety, the National Fire Agency, and local governments,” Park said. “We will comprehensively assess the actual impact of the grant tax decline on local governments, the capacity of each local government’s special firefighting account, and the adequacy of central government support, and actively consider measures to address the issue during the National Assembly’s budget review.”

Park also flatly rejected criticism in the National Assembly that the Future Response Fund was a “personal slush fund,” saying, “Neither the president nor I can dip into it at will. That is absolutely not how it works, and I have never thought of it that way.” He added, “Under the National Finance Act, funds are designed to be managed flexibly for specific purposes,” and emphasized that “safeguards have been put in place to prevent the government from increasing on its own the budget for projects cut by the National Assembly.”

Explaining why the government set the fund’s own adjustment limit at 30%, higher than the 20% limit for general funds, Park cited its unique structure. “The Future Response Fund is a hybrid fund with both project-based and financial accounts,” he said. “For next year, the project-based portion accounts for only about 28% (KRW 45.4 trillion), while more than 70% consists of financial accounts, so it is reasonable to allow adjustments of around 30%.” He added, “New models emerge in the AI sector every six months, requiring urgent investment,” and said the aim was “to respond actively and swiftly to external uncertainties.”

Regarding the target he mentioned during the parliamentary audit of an excess return of 1.7 percentage points over the three-year government bond yield, Park said, “My point at the time was that such a return might be achievable, given the average returns of pension funds.” He added, “It is difficult to make a definitive statement before the fund bill passes, while we are still gathering expert opinions. We need to carefully assess revenue variables, such as the scale of surplus tax revenue to be reflected and the semiconductor cycle, as well as the nature of expenditures.”

“The Future Response Fund is focused less on generating returns as an end in itself than on serving as a ‘fiscal dam’ to support strategic investments in the future,” Park said. “We will develop the fund’s structure after comprehensively reviewing whether to establish a separate outsourced chief investment officer (OCIO) system or use the pension fund investment pool, as well as how to allocate assets in the short, medium, and long term.”

Regarding the “2045 National Mid- to Long-Term Strategy,” scheduled to be announced at the end of the year, Park said, “We are refining the draft, led by the KDI 3040 research team, and incorporating the views of young people, government ministries, and political parties through town hall meetings and surveys.” He added, “We will present a polished final proposal after briefing the president on its progress in the near future.”

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