Budget and Accounts Committee Opens Policy Session... Debate Spans Fiscal Soundness to Future Response Fund

Comprehensive policy questioning at National Assembly Budget and Accounts Committee on April 4
Opposition: "Questions over the sustainability of fund spending"
Ruling party: "Golden time for strategic investment in the AI era"

The National Assembly’s Special Committee on Budget and Accounts began comprehensive policy questioning on Nov. 4 over next year’s budget proposal. Lawmakers from both the ruling and opposition parties questioned the government on measures to increase or cut spending, the Future Response Fund, and proposed reforms to local allocation tax, focusing on the fiscal management of the largest-ever budget, which is in the 820 trillion won range.

After holding comprehensive policy questioning through Nov. 5, the committee will review economic and non-economic ministries’ budgets from Nov. 9 to 12. Prime Minister Han Seongsuk, Deputy Prime Minister and Minister of Finance and Economy Lee Hyeongil, and Minister of Planning and Budget Park Honggeun attended the session.

Lee Kwangjae, chair of the committee, said, "The AI revolution presents an opportunity to change the nation’s future, but it also carries a high risk of exacerbating inequality and the jobs crisis. I ask you to consider not only the budget but also how to make use of national assets, including pension funds, public land and property, and policy finance."

Prime Minister Han Seongsuk delivers opening remarks at a comprehensive policy briefing at the National Assembly on Nov. 4, held as part of the review of next year's budget. 2026.11.04 Photo by Yoon Dongju

Early questions focused on national fiscal soundness, the Future Response Fund, and proposed reforms to local allocation tax.

The opposition said that, given the uncertain revenue outlook, the priority should be to ensure fiscal soundness by repaying government bonds rather than expanding spending. The ruling party, meanwhile, argued that the government should establish a fiscal safety net to prepare for future revenue declines while making bold investments in future growth sectors.

In the first round of questioning, People Power Party lawmaker Na Kyungwon focused on the sustainability of the Future Response Fund. "Additional tax revenue is not expected to come in from 2029, but the fund will continue to spend about 21 trillion won every year," she said. "How will you respond if the flow of funds dries up in three years?"

Prime Minister Han replied, "It is difficult to predict definitively whether additional tax revenue will dry up. Experts also disagree on whether repaying debt during an economic boom is the right answer." She added, "Our country’s fiscal soundness and level of government debt are considered manageable."

In the second round of questioning, Democratic Party of Korea lawmaker Ahn Dogeol stressed the need for the government to play an active role in securing a lead in the AI era. "We have been unable to invest sufficiently in future growth sectors because of tax revenue shortfalls, but now we can begin investing in earnest," he said. "This is the golden time for strategic investment, and we must make bold and ambitious investments."

Minister Park said the Future Response Fund would "use surplus funds to mitigate and absorb sharp fluctuations in tax revenue, and, if a revenue shortfall occurs, to bolster fiscal capacity in a timely manner."

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