The government will establish a future response fund financed by additional tax revenue expected to reach 100 trillion won by next year. An official at the Ministry of Planning and Budget said Thursday, "We will push for related legal revisions to establish a future response fund that will be used for future growth engines." A day earlier, Presidential Chief of Staff Kang Hoon-sik also announced plans to create the future fund. The ruling party, government and presidential office appear to be accelerating efforts to build the fund after President Lee Jae-myung, at a press conference marking his first anniversary in office last month, ordered measures to utilize the additional tax revenue. Kang cited the creation of future growth engines, response to K-shaped polarization, and support for youth housing and jobs as uses for the fund.
The reason the future fund draws such strong public attention is likely its enormous scale. The government raised its national tax revenue forecast for this year by 25 trillion won, from an initial 390 trillion won to 415 trillion won. Some analysts project that additional tax revenue will reach 100 trillion won by next year, driven by increases in corporate and income taxes from the semiconductor boom and a surge in securities transaction taxes from the stock market rally. As Kang limited the scope of support, the future fund should be concentrated in productive areas such as infrastructure building for future industries including semiconductors, physical artificial intelligence (AI), data centers and robots, along with youth employment and resolving the polarization between large and small businesses. The government must never carelessly use the future fund for politically motivated favors as if it were "the administration's slush fund," nor misuse it as a source for cash handouts.
The ruling party, government and presidential office must carefully overhaul related legislation so that the future fund can be used properly. The National Finance Act restricts excess tax revenue to be used first for settling local education finance grants, contributions to the Public Fund Repayment Fund, and repayment of national debt. Without meticulous preparation, it could conflict with the National Finance Act. Coordination among ministries over investment targets is also needed. If the future fund proceeds in a disorderly manner without coordination with the sovereign wealth fund led by the Ministry of Finance and Economy and the National Growth Fund overseen by the Financial Services Commission, it could cause inefficiencies from overlapping investments. The future fund is precious money built from the sweat and hard-earned taxes of companies and citizens. The creation and operation of the future fund must strictly focus on "growth engine support" and "transparency," and this must be codified in the relevant regulations. Not a single political calculation should be allowed in the future fund.
