[Anchor]

The government has unveiled next year's budget proposal: a staggering 820.9 trillion won. This is the largest scale in history, marking a 12.8% increase from this year. With the growth rate also hitting an all-time high, it is literally a "super budget." This is thanks to projections that tax revenues will increase by nearly 170 trillion won compared to this year, driven by the semiconductor boom. The government plans to concentrate these expanded funds on future industries, youth, and regional development.

Let's first take a look at the specific policies included in the report by reporter Kim Beom-joo, and then we will hear directly from the Minister of Budget and Planning on whether these funds will be put to proper use.

[Reporter]

First, 43.3 trillion won, an increase of over 50% compared to this year, will be poured into youth-related sectors.

A representative example is the "Our Child Independence Fund," which deposits up to 1.2 million won annually into fund accounts for children from families below a certain income threshold until they turn 18.

The calculation is that if families save 2 million won every year for 19 years, combining parental support, their children can secure 70 million won in seed money upon reaching adulthood.

Additionally, 1.7 trillion won will be allocated to the "Youth Future Savings" program, where the government contributes 6% of savings for individuals aged 19 to 34, and 2.1 trillion won will go toward the military service preparation savings for enlisted soldiers.

Newlyweds will also receive a cash payment of 1 million won upon marriage, with childbirth subsidies of 10 million won for the first child and up to 20 million won for the third child and beyond.

[Cho Yong-beom / Vice Minister of Budget and Planning: People say we have continuously implemented youth preferential policies every year, but because the increases were piecemeal, the actual impact felt was low. This time, we decided to single out youth policies and implement them comprehensively and boldly enough that people can truly feel the difference.]

The government will also allocate 41 trillion won to foster advanced strategic industries to develop future growth engines, 21.3 trillion won specifically for semiconductors and artificial intelligence, and 117.1 trillion won to support regional areas and vulnerable groups.

To back these investments, the government plans to siphon off 162 trillion won from the excess tax revenues collected to establish a new Future Response Fund.

After spending 58 trillion won next year on youth and growth engine investments, the remaining 104 trillion won will be kept as a reserve fund to prepare for times when tax revenues fall short.

However, controversies are expected to arise during the subsequent review process, including concerns over whether this money might be used like a government slush fund and whether the increase in cash handouts amounts to populist administration.

(Video Editing: Kim Yoon-sung, Design: Lee Ga-jin)

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[Anchor]

Various perspectives and expectations are intersecting surrounding next year's record-breaking 820 trillion won budget proposal and the Future Response Fund. Minister of Budget and Planning Park Hong-keun is here in the studio today (the 1st).

Q. What are the characteristics and key investment directions of the 2027 budget proposal?

[Park Hong-keun / Minister of Budget and Planning: This budget proposal involves bold and large-scale investments to prepare for the future. At the same time, fiscal soundness actually improves, creating a virtuous cycle between economic growth and public finance—that is how you can view next year's budget. Despite this, we also aggressively pursued expenditure restructuring simultaneously. It is a budget that has achieved fiscal innovation achievements together. There are two major pillars we aim to achieve through next year's budget: investments in growth sectors to rebound our fading potential growth rate, alongside investments in easing polarization so that the fruits of growth can be distributed evenly among citizens, regions, and income brackets.]

Q. Concerns that the 162 trillion won Future Response Fund could become a government 'slush fund'?

[Park Hong-keun / Minister of Budget and Planning: The Future Response Fund is by no means something our government can operate arbitrarily. Like general accounts or other funds, it is subject to the control and discipline of the National Fiscal Act and the National Assembly Act. If we need to make changes to the fund operation due to necessity, it is designed to be done only within the scope permitted by the National Assembly. Furthermore, ex-post changes—meaning when we utilize excess tax revenue or make accumulations—must be reported to the National Assembly without delay.]

Q. Criticisms that 'increased tax revenues should be used to pay off national debt'—what is your stance?

[Park Hong-keun / Minister of Budget and Planning: We are utilizing 12.5 trillion won of this Future Response Fund to scale down new government bond issuance next year. Consequently, our national debt ratio is projected to drop from around 51% this year to the 48% range next year. It decreases by 3.3 percentage points. Moreover, by 2030, the final year of our administration, it will drop by more than 10 percentage points compared to the original mid-term plan established every five years. Therefore, South Korea's fiscal soundness is actually becoming very sound; in other words, you can look at this budget as one that simultaneously catches two hares: economic growth and fiscal soundness.]

Q. Won't the end of the semiconductor boom 오히려 create fiscal burdens?

[Park Hong-keun / Minister of Budget and Planning: That is precisely why we are creating this Future Response Fund. If we were to put all the increased tax revenue into the general account, single-year accounting principles would force us to spend it all at once or pay off debt, right? However, we are putting tax revenues brought in by such temporary super-booms into this fund, pulling out only as much as needed during booms, and using it to properly pay off debt or fund critical investment areas during recessions. You can understand that this fund was prepared with the intent to overcome and supplement the single-year accounting principle of spending more when more comes in and less when less comes in.]

Q. The Bank of Korea raised the benchmark interest rate... Is this a policy misstep?

[Park Hong-keun / Minister of Budget and Planning: Next year's budget proposal, which we designed and formulated with investment plans this time, focuses heavily on fostering future growth engines, namely lifting the potential growth rate. Alongside this, we implemented customized support projects for vulnerable groups. As such, even the Bank of Korea Governor remarked that fiscal policies lifting the potential growth rate do not constitute a policy misstep, did he not? In that respect, because we operated in a direction that reduces aggregate demand stimulation while simultaneously expanding aggregate supply, we believe harmonious operation with monetary policy is possible.]