Budget, education ministries clash over education grant reform

Government plans to overhaul the local education grant system are stalled as the budget and education ministries remain at odds over the specifics of a funding formula that has remained largely unchanged for over half a century, despite agreeing on the overall framework for reform. The push for reform intensified as the Ministry of Planning and Budget anticipated a significant boost in tax revenue driven by the semiconductor industry's growth.

However, the Ministry of Education has expressed concerns that current education grants have been automatically increasing along with tax revenue despite a decreasing school-age population, raising fears of wasteful or inefficient education spending.

The disagreement between the two ministries extends to how the newly proposed Future Response Fund, funded by excess tax revenue from semiconductor exports, should be utilized. The Ministry of Planning and Budget aims to unveil details of this fund, which could potentially address the funding issues, as early as this week. Both ministries have agreed on the necessity of abolishing the existing system, which arbitrarily allocates 20.79 percent of annual domestic tax revenue to local education grants.