23.6 Trillion Won of Future Response Fund's 45.4 Trillion Won in Project Spending Goes to Existing Programs... Parties Clash Over Budget Allocation

The National Assembly has raised concerns that more than half of the project spending in the Future Response Fund, newly established in the 2027 budget proposal, consists of existing budget programs. As the ruling and opposition parties clash over how to use additional tax revenue generated by the semiconductor boom, debate has also arisen over whether it is appropriate to fold existing programs and ongoing welfare spending into the fund.

At a public hearing on the 2027 budget proposal and fund management plan held by the National Assembly’s Special Committee on Budget and Accounts on Oct. 30, Progressive Party lawmaker Jeong Hye-gyeong said, "According to the government’s budget proposal, 23.6 trillion won of the fund’s 45.4 trillion won in project spending, or more than half, is for programs that were already included in the original budget." The scale of existing programs cited by Jeong amounts to about 52% of total project spending.

(Seoul=Yonhap News) Reporter Shin Hyunwoo speaks during a public hearing on the 2027 budget bill and fund management plan at the second plenary meeting of the National Assembly Special Committee on Budget and Accounts on the 30th. 2026.10.30 nowwego@yna.co.kr (End)

Citing the 2.9 trillion won basic child allowance as an example, Jeong stressed, "Ongoing programs such as the child allowance should be funded through the main budget. The fund should be used for purposes that help build a sustainable, powerful country, such as developing infrastructure, training the workforce, and addressing inequality and polarization."

The People Power Party also criticized the inclusion of existing programs in the fund. Referring to support for youth employment and startups, public rental housing, and scholarships, party lawmaker Yoo Sang-beom said, "These are things that had already been included in the budget as ongoing expenditures, but now they have been added again, haven't they?"

The Democratic Party of Korea, meanwhile, emphasized the need for active fiscal investment in future industries. Lawmaker Kim Nam-geun said, "If we don't invest now in advanced strategic industries such as AI semiconductors, data centers, and physical AI, the gap with competing countries could widen rapidly," adding, "This is the time to secure funding through other means and invest actively, even if there is no excess tax revenue."

Experts attending the public hearing also expressed differing views. Kim Jeong-hun, head of the Institute for Fiscal Policy, said, "2026 and 2027 are highly exceptional years that offer South Korea an opportunity," adding, "If we make good use of this period, we can introduce institutional changes and improve the fundamentals of South Korea's public finances in ways that could buy us at least 10 years."

In contrast, Yonsei University professor Yang Jun-mo said, "I earnestly ask that you scrap the Future Response Fund plan," criticizing the government: "Increasing national debt while saying tax revenue has risen is an abdication of the duty to manage public finances."

The government plans to establish the Future Response Fund with a total of 162.3 trillion won in 2027. This consists of 45.4 trillion won in project spending, 104.4 trillion won in reserve funds, and 12.5 trillion won in reductions to new government bond issuance.

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