Budget minister calls for 'virtuous cycle' of spending, growth and tax revenue

Seoul, Oct. 8 - South Korea's budget minister stressed the importance of creating a virtuous cycle of proactive fiscal spending, economic growth and higher tax revenue, according to the National Assembly. Park Hong-geun, the Budget Minister, outlined the government's plans for the Future Fund, which he believes will play a crucial role in achieving this goal.

"The Future Fund, channeling windfall tax revenue from the semiconductor boom, will be a key driver in promoting sustainable economic growth," Park stated. "By boldly overhauling spending structures, we aim to ensure the sustainability of our public finances."

The Future Fund, set to launch next year, will use windfall revenue - defined as tax receipts exceeding long-term trends due to structural changes or significant fluctuations - to invest in various sectors, including young people, growth engines, regional economies, education, and talent development. This approach aims to provide a stabilization mechanism for fiscal management, rather than spending all the additional funds in a single year.

Park emphasized that the ministry will address persistent challenges such as the economic and social burdens of an aging population, as well as regional disparities.