The government will soon introduce a bill to revise the current system, which automatically allocates a fixed portion of national tax revenue to local education finance grants. The basic pension will be restructured to strengthen support for low-income groups, while the creation of a future response fund and the second round of relocating public agencies to provincial areas will also be accelerated.
Park Hong-keun, Minister of the Ministry of Planning and Budget, appeared on KBS's "Sunday Diagnosis" on the 26th and said, "As the school-age population is declining while the scale of national tax revenue has grown, we are preparing a new plan to break the 20.79% linkage structure." He added, "We are in consultation with the Ministry of Education and plan to submit the government's proposal to the National Assembly in the form of a bill soon." The plan the ministry is considering would sever the current structure that automatically allocates 20.79% of national tax revenue as local education funding, while maintaining the annual grant per student (about 13 million won) and directing the saved resources toward higher education, lifelong education, and early childhood education, which had previously been neglected.
Park also reiterated the direction of the basic pension reform. He reaffirmed that he would pursue a structure focused on low-income support by changing the current method of paying to the bottom 70% of income earners to one centered on the standard median income. "Much of the consultation with the Ministry of Health and Welfare is in its final stages," he said. "If we restructure it based on the standard median income, we can provide more substantial support to those in difficulty."
Next year's budget will focus on three mega projects, raising the potential growth rate, and building a social safety net for vulnerable groups. The future response fund, created using tax revenue that increased far more than expected due to the semiconductor boom, will invest in strategic fields such as artificial intelligence (AI), youth, provincial regions, and talent development. It will also be used as a fiscal stabilization mechanism when there is a tax revenue shortfall or a need for a supplementary budget. Park explained, "The aim is to overcome the limitations of the single-year budget and accounting approach and increase productive spending for the future."
The government will also pursue balanced regional development policies. It plans to establish a "super-wide-area account" that expands fiscal support at the metropolitan level, increasing resources that regions can use autonomously. Park said he would carry out incentive support for the integrated special city of South Jeolla Province and Gwangju without setbacks, and would soon announce plans for the second round of relocating public agencies to provincial areas, laying the foundation for the capital region and provincial areas to grow together.
