Minister of Planning and Budget Park Hong-keun [Yonhap]
Minister of Planning and Budget Park Hong-keun [Yonhap]

Minister of Planning and Budget Park Hong-keun said Wednesday that the government's future response fund would be invested through bond and share managers to generate returns above prevailing interest rates, with any surplus available to cover revenue shortfalls or finance supplementary budgets.

Park made the remarks on SBS's "Ju Yeong-jin's News Briefing," where he outlined how the fund would be managed.

He added that the accumulated fund would be "strategically invested" in youth, growth engines, regional development, and education and talent programs.

Park said he had a particular interest in youth policy and pledged to present a comprehensive package — covering education, employment, asset formation, housing, and childbirth and childcare support — to the president and the public "in the near future."

The government had earlier announced plans to establish the future response fund and channel it into raising the country's potential growth rate, after an unprecedented semiconductor boom pointed to record additional tax revenue this year.

On the fund's size, Park said the figure could not be determined until next year's tax revenue was known, but added it would be "substantial."

He described next year's budget as being in the "final review stage." The government would submit it to the National Assembly in early September, he said, with the Assembly conducting full deliberations during the regular session before a final vote in early December.

Park forecast that total expenditure next year would reach "800 trillion won plus alpha," adding that the spending growth rate was expected to surpass the more than 10 percent recorded during the global financial crisis. Total expenditure this year, including the supplementary budget, stands at 753 trillion won ($527 billion).

On the revenue side, he said the government had planned for 390 trillion won in tax revenue this year and projected that next year's figure would exceed 500 trillion won.

Responding to criticism that expansionary fiscal policy burdens future generations, Park pushed back, saying the previous administration's approach — focusing solely on debt repayment, forgoing necessary supplementary budgets, and cutting taxes — had produced a vicious cycle of austerity.

"The idea is to invest properly in economic growth so that our economic performance translates into higher tax revenue and a virtuous cycle of fiscal soundness," he said. "If we don't invest now, we are squandering the golden window of opportunity ourselves."

On plans to restructure the local education finance subsidy system, Park said the intent was to use the grants "more efficiently and in a more balanced way" across not only primary and secondary education but also higher education, lifelong learning and early childhood education.


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