Minister of Planning and Budget Park Hong-keun said Thursday the government would establish a future response fund using additional tax revenue to invest in youth and regional talent, ensuring stable and sufficient financing for future growth engines and addressing K-shaped polarization.

Park made the remarks during a briefing to the National Assembly's Finance and Economic Planning Committee, saying that active fiscal investment requires scrutiny not just of how much is spent, but of what results are achieved.

Minister of Planning and Budget Park Hong-keun answers lawmakers' questions at the second plenary session of the National Assembly's Finance and Economic Planning Committee on Thursday. [Yonhap]
Minister of Planning and Budget Park Hong-keun answers lawmakers' questions at the second plenary session of the National Assembly's Finance and Economic Planning Committee on Thursday. [Yonhap]

Park said the government would conduct a zero-based review of all fiscal programs, cutting or abolishing those that show no results, and fundamentally restructure mandatory expenditures such as the local education finance grant to reflect a changed environment.

He described the semiconductor boom and the AI revolution as "a once-in-a-lifetime opportunity for South Korea," urging citizens, the National Assembly and the government to pool their efforts and concentrate national capabilities to make the most of what he called the country's golden window — one that may never come again.

On the reform process for the local education finance grant, Park said the ministry plans to narrow its differences with the Education Ministry, the agency with primary jurisdiction, before submitting a final amendment bill to the National Assembly.

Park acknowledged that the education landscape had changed significantly, recalling that when he was a first-term lawmaker in 2016 he had introduced a bill to raise the domestic tax linkage ratio to 22 percent. "Looking back, my thinking at the time was, in a sense, shortsighted — narrow and shallow," he said.

He added that he had been calling for reform in this area since his days as a lawmaker, not merely because he now serves as minister of planning and budget. He said he viewed the current moment as the right time to act.

Park also noted that under the current domestic tax linkage formula, there are cases where no grant can be disbursed at all when domestic tax revenue falls short, and said resolving this instability in the grant system is the right direction to pursue.


y2k@heraldcorp.com