-Next year's budget? A crucial budget that will determine the nation's destiny
-Many interview requests regarding finances, but budgeting is done strictly on principle
-Decided to invest in the future of youth, including 'jobs, asset accumulation, and housing'
-Handing out cash? Now is the golden time to raise potential growth rate
-Not spending all collected tax revenues... adjusting wasteful projects
-Plan to increase aggregate supply while minimizing the impact on inflation
-A vicious cycle of austerity was repeated under Yoon…we are moving toward a virtuous cycle
-Repayment of IMF public funds ends next year…putting a full stop to past debt
-Deficit debt rising? South Korea's debt is at a manageable level
-Concerns over a slowdown in the semiconductor boom? Managing surplus funds taking this into account
-Purpose of Future Response Fund? Keeping pace with the era of AI hegemony competition
-Utilizing presidential decree projects? National Assembly approval will be sought in emergencies
 
■ Broadcast: SBS Kim Tae-hyun's Political Show (FM 103.5 MHz 7:00 – 9:00)
■ Date: Wednesday, September 9, 2026
■ Host: Attorney Kim Tae-hyun
■ Guest: Park Hong-keun, Minister of Planning and Budget
 
[Kim Tae-hyun]: While expectations and concerns cross over the government's proposed 820 trillion won budget for next year, the opposition party is preparing for a sharp interrogation in the National Assembly interpellation session that begins today. Joining us to discuss this is Park Hong-keun, who serves as the inaugural Minister of Planning and Budget in our administration. Hello, Minister.
 
[Park Hong-keun]: Good to see you.
 
[Kim Tae-hyun]: You are the current administration's inaugural Minister of Planning and Budget, aren't you?
 
[Park Hong-keun]: Yes, since the ministry was launched on January 2 of this year.
 
[Kim Tae-hyun]: Yes. So since this is your first budget, it must be an extremely important budget from your perspective.
 
[Park Hong-keun]: Not only personally for me, but I view it as an exceptionally critical budget that will determine the very destiny of the Republic of Korea. I believe it is a budget proposal that will influence South Korea's next five to ten years, not just define next year.
 
[Kim Tae-hyun]: Minister, you served as a lawmaker for a long time. People often refer to the Minister of Planning and Budget as an influential "powerbroker" minister, since you handle the budget. Do lawmakers from both ruling and opposition parties come and ask to meet you with various requests?
 
[Park Hong-keun]: When I was nominated as minister, the media talked a lot about whether I might be swayed by such petitions because it was the first time a former lawmaker took charge of finance. But I like communicating.
 
[Kim Tae-hyun]: Because as I recall from your confirmation hearing, lawmakers from the opposition party also gave you very favorable evaluations.
 
[Park Hong-keun]: That is why when a meeting request comes in, I try to meet, even for five or ten minutes, in whatever way possible. The focus is on meeting people. However, when it comes to budgeting or making such determinations, I have no choice but to adhere strictly to principles.
 
[Kim Tae-hyun]: You have drafted next year's budget at an all-time record 820 trillion won. You defined it as "a bold investment to prepare for the future." Looking at it, the budget for youth and newlyweds has indeed increased significantly.
 
[Park Hong-keun]: Before entering politics, I served as the head of youth organizations for a long time, and after joining the party, I served as the youth committee chair, and as a lawmaker, I led a bipartisan gathering of young lawmakers studying youth issues. The lives of young people no longer change solely based on individual effort; it has already moved into a socio-structural dimension. That is why I see investing in young people not as special consideration for a specific generation, but as a strategic investment to lift the nation's future growth. So for next year, we set the budget at 43.3 trillion won, an increase of 53.5 percent compared to this year. The reason we expanded it so much is that if we do not invest properly in young people right now, it could cause not only a slowdown in national growth but also future social costs. Therefore, we established detailed investment plans across different stages of growth. For instance, we provide a marriage support allowance of 1 million won when couples marry. Then, when they have children, although it varies between the Seoul metropolitan area and regional areas, we grant up to 10 million to 20 million won. We also provide a basic child allowance of 200,000 to 300,000 won per month until age 12. But the most important thing is jobs.
 
[Kim Tae-hyun]: Yes, that is the most important.
 
[Park Hong-keun]: That is why regarding youth jobs next year, we meticulously designed programs to provide job training, work experience, and job search support to 720,000 people.
 
[Kim Tae-hyun]: Yes.
 
[Park Hong-keun]: Thus, we are keeping the importance of jobs in mind more than ever before. Along with this, assets—asset formation is also very important, isn't it?
 
[Kim Tae-hyun]: That's right.
 
[Park Hong-keun]: In this area as well, people have no income when preparing for employment or starting a business. We established a new loan that can be used without the burden of interest during such times. Furthermore, there is the Youth Future Savings Account, which was very popular this year. Previously, this was selective, but next year we will open its doors to all young people up to age 34, allowing them to build a lump sum of money. Also, one of the biggest issues these days is housing.
 
[Kim Tae-hyun]: That is paramount.
 
[Park Hong-keun]: Previously, youth housing consisted of small floor plans located far on the outskirts, but now we have made it so that medium-sized units near subway stations are also accessible under this universal rental housing program. In addition, young people engage heavily in cultural activities. There is something called the Culture and Arts Pass for exhibitions, performances, and sports. While it used to be offered only once at ages 19 and 20, we have expanded it so that anyone up to age 34 can receive 100,000 to 150,000 won every year to spend on such activities.
 
[Kim Tae-hyun]: While this is very good for young people, looking at criticisms from the opposition party, they criticize it as handing out cash, populist administration, and the like. What are your thoughts on that?
 
[Park Hong-keun]: Would I spend such precious tax revenues just to scatter money around? We think of it this way. First, we believe that next year and the year after—that is, the next two to three years starting from this year—is the golden time for raising South Korea's potential growth rate. Therefore, believing that we must invest boldly and swiftly to expand this potential growth rate during this window, we increased the budget by 12.8 percent compared to this year to draft an 821 trillion won budget. In the early stages, we make strategic expenditures and investments like this.
 
[Kim Tae-hyun]: Yes.
 
[Park Hong-keun]: However, from 2028 onward, we plan to manage the total expenditure growth rate while comprehensively observing whether those results are properly emerging and whether revenue conditions continue to improve. For example, we plan to manage the growth rate in the 5-percent range through 2030.
 
[Kim Tae-hyun]: Yes.
 
[Park Hong-keun]: Another point is that just because revenue comes in does not mean we spend it all. We will create a Future Response Fund from increased tax revenues and reinforce it so that it can be used fiscally during recessions when tax revenues slow down. We are creating such mechanisms. Furthermore, we did not just sit idle because a lot of money came in; like wringing out a dry cloth or a towel, we carried out the largest expenditure restructuring in history. It amounted to a massive 107 trillion won. On an unprecedented scale, through fiscal expenditure and—
 
[Kim Tae-hyun]: You mean stopping money leaks?
 
[Park Hong-keun]: Yes. So by restructuring inefficient, low-performing, and wasteful projects, I am reinvesting that money.
 
[Kim Tae-hyun]: That is important.
 
[Park Hong-keun]: Because we are doing both simultaneously, I can say that we are using the taxpayers' hard-earned money without wasting it.
 
[Kim Tae-hyun]: Did you happen to watch Floor Leader Jeong Jeom-sig's negotiation bloc representative speech yesterday?
 
[Park Hong-keun]: Yes, I listened to the whole speech.
 
[Kim Tae-hyun]: Regarding your bold investment, Floor Leader Jeong Jeom-sig defined it yesterday as "plundering the future." He pointed out that to curb inflation right now, liquidity fundamentally needs to be tightened, yet the government is handing out money, asking how it makes sense to curb inflation and stabilize real estate when market liquidity is increasing.
 
[Park Hong-keun]: The Governor of the Bank of Korea has already commented on that issue. It is a criticism asking whether monetary policy and fiscal policy are out of sync. But you can look at it this way. Anyone with basic knowledge of economics understands aggregate supply and aggregate demand. We are trying to minimize stimulating aggregate demand. That is, we precisely target and provide customized support to vulnerable groups in terms of people's livelihoods.
 
[Kim Tae-hyun]: Yes.
 
[Park Hong-keun]: We invest much more in expanding aggregate supply—that is, lifting potential growth rate to grow South Korea's growth capacity. We are investing the most in that area next year. For example, things like three mega-projects, AI, and regional growth engines. Looking at it this way, this minimizes the immediate impact on inflation while driving economic growth over the mid- to long-term.
 
[Kim Tae-hyun]: Yes.
 
[Park Hong-keun]: We are not the only ones evaluating it this way. International organizations are also speaking about our fiscal evaluation along these lines. After all, there are many cases where countries like the United States and EU members combined expansionary fiscal policy with contractionary monetary policy. Therefore, our active fiscal policy next year will go toward investments that enhance growth capacity, ensuring that we will by no means be out of sync. Ultimately, because now is an opportune window to raise the potential growth rate, we are taking advantage of this golden chance without letting it slip.
 
[Kim Tae-hyun]: Yes.
 
[Park Hong-keun]: If I may add just one more thing, during the Yoon Suk Yeol administration over the two-year period across 2022, 2023, and into 2024, a massive tax revenue shortfall of around 87 trillion won occurred.
 
[Kim Tae-hyun]: It seems that was the case.
 
[Park Hong-keun]: That resulted from tax cuts centered on corporate taxes and responding passively to economic conditions. As a result, the economy went into a slump, and tax revenues were poor. That is the vicious cycle of austerity.
 
[Kim Tae-hyun]: A vicious cycle of austerity.
 
[Park Hong-keun]: Yes. But we should not go that way; we must create a virtuous cycle. What is that? We invest actively to grow the economy, which in turn expands tax revenues, and that allows us to reinvest. Aside from establishing a virtuous cycle of fiscal soundness and economic growth, what other path is there? That is the path we must take. That is what we intend to do under the Lee Jae-myung administration.
 
[Kim Tae-hyun]: So it is also not a case of expansionary fiscal policy and monetary policy being out of sync, right?
 
[Park Hong-keun]: Correct.
 
[Kim Tae-hyun]: You mean that rather than being at odds with the Bank of Korea, it can be well-coordinated to create a virtuous cycle.
 
[Park Hong-keun]: That is correct.
 
[Kim Tae-hyun]: Understood. And Minister, there was some good news recently. The President spoke about this directly to the public: the repayment of public funds borrowed from the IMF. So does that mean it will be fully repaid next year?
 
[Park Hong-keun]: That is right.
 
[Kim Tae-hyun]: How long has this taken?
 
[Park Hong-keun]: I reported that at a Cabinet meeting. Vice Minister Lee Hyoung-il, who was nominated as Minister of Finance and Economy and sat next to me, was the deputy director named Lee Hyoung-il at the very bottom of the document I showed during the report back then. So when I mentioned, "The person from back then has now been nominated as the economic commander, and next year the repayment of the public funds borrowed during the IMF crisis will finally be concluded," the President was very pleased and even wrote a post about it the next day.
 
[Kim Tae-hyun]: This is something worth applauding.
 
[Park Hong-keun]: We have been repaying it for about 25 years, and it holds this significance: rather than passing the foreign exchange crisis debt onto future generations, the current generation finishes it and moves forward.
 
[Kim Tae-hyun]: Indeed.
 
[Park Hong-keun]: Internationally as well, doesn't it signify that the Republic of Korea is a country that keeps its promises? Our government, the public, and the financial sector are putting a full stop to the past debt we shouldered over the past 25 years. Thus, I see it as having the significance of institutionally putting a period to and completing our major national crisis known as the foreign exchange crisis.
 
[Kim Tae-hyun]: Paying off money borrowed when one was a deputy director after becoming a minister is truly meaningful. But Minister, looking at the projections, four years from now will be 2030, and you projected that national deficit debt that we must repay will reach the 1,300 trillion won range. Although the IMF debt is fully repaid, is there no problem with our finances? 1,300 trillion won is not a small amount of national debt.
 
[Park Hong-keun]: When people hear 1,300 trillion won, it sounds like an enormous scale. But debt should be approached this way: rather than just looking at the immediate scale or speed, isn't it more important whether we can manage it?
 
[Kim Tae-hyun]: Relative to our economic stamina.
 
[Park Hong-keun]: Exactly. But our country's debt, including this deficit debt, stands as follows: everyone establishes a medium-term fiscal plan of about five years every year. This year as well, a plan starting from this year through 2030 was reported at the last Cabinet meeting and submitted to the National Assembly with this budget proposal. If you compare it with that, everything improves, including the scale and proportion of the debt. Therefore, from a medium-term perspective, national debt is entirely manageable for us. I am not deciding this arbitrarily; when looking at international comparisons and assessments made by international organizations, I am saying that it is fully manageable over the mid- to long-term.
 
[Kim Tae-hyun]: Yes.
 
[Park Hong-keun]: Here is the thing. For international comparisons, there is what is called D2, general government debt. This combines the debt of the central government, local governments, and non-profit public institutions. Comparing this with major advanced economies based on IMF published standards, South Korea's ratio relative to GDP is 54.4 percent, whereas the OECD and IMF advanced economy average is 108.2 percent. We are at half their level. That is why international organizations like the IMF evaluate our fiscal capacity very positively. Just this past May, they stated that South Korea's debt is at a sustainable level and that the risk of a debt crisis is also low. Then, some might ask if interest payments are too high. Interest is quite substantial, close to 30 to 40 trillion won. Regarding interest as well, we manage it while continuously comparing it with other countries. This is also at a lower level compared to major advanced economies. I will not go into detailed figures here.
 
[Kim Tae-hyun]: Yes.
 
[Park Hong-keun]: Therefore, we naturally lower burdens on the future while focusing on productive investments that maximize economic growth potential. What is the core issue? The national debt ratio ultimately depends on how much the denominator, GDP, grows. Since the numerator is national debt, this year alone the nominal growth rate was officially announced at 12.3 percent, and there is potential for it to be even higher.
 
[Kim Tae-hyun]: Yes.
 
[Park Hong-keun]: Therefore, how much more we grow this GDP is a crucial matter. In that regard, I am managing it well, and as I mentioned earlier, we are restructuring expenditures on a scale incomparable to previous administrations, working toward fiscal soundness as well. As a result, how will things change by 2030 when this administration ends? If left alone, the national debt-to-GDP ratio was originally projected to reach 59 percent. We are lowering this by 10 percentage points down to 49 percent.
 
[Kim Tae-hyun]: By a full 10 percentage points.
 
[Park Hong-keun]: And as you know, the managed fiscal balance was 3.9 percent this year, but we will bring it down to 0.1 percent next year. Therefore, the fiscal rule advocated by the opposition party—to keep the managed fiscal balance within minus 3 percent—will continue to be realized during our administration.
 
[Kim Tae-hyun]: Hearing your explanation, corporate taxes are being collected in huge amounts right now. Rather than using that excess tax revenue simply to pay off debt, you judged that investing in the future to expand the size of our economy is far better for future generations in the long run, right?
 
[Park Hong-keun]: That is correct.
 
[Kim Tae-hyun]: Minister, one concern is that while it would be wonderful if Samsung Electronics and SK Hynix continue to make money from semiconductors for 20 or 30 years, things do not always turn out that way. If semiconductors stumble, corporate tax revenue will decline, and once a budget is expanded, it is not easy to reduce it. Are preparations being made for that?
 
[Park Hong-keun]: Naturally, we design the budget taking such factors into account. We do not assume that tax revenue conditions will remain favorable indefinitely. That is why we designed the budget based on outlooks indicating that revenue conditions will be better next year than this year, but will weaken somewhat the year after next. We are creating the Future Response Fund and will not spend it all; we will manage a significant portion of it as surplus funds. For example, through professional asset managers in bonds or stocks, we will operate the fund professionally to generate returns exceeding the interest incurred when issuing government bonds—which was around 3.9 percent for 3-year bonds based on figures from a few days ago. And next year, we will invest around 45 trillion won of that into the aforementioned youth, growth engines, regional development, and talent cultivation to boost the potential growth rate. Additionally, 12.5 trillion won will be used to manage national debt by reducing new bond issuance volume. Because funds are utilized in such ways, I can say that we are managing it with potential downturns in future tax revenues in mind.
 
[Kim Tae-hyun]: You mentioned the Future Response Fund several times today. Looking at it, funds like the National Housing and Urban Fund and the National Pension have designated purposes, but "future response" sounds abstract, leading the opposition party to immediately cast doubt: "What is this? Are they holding onto money only to distribute it under the President's authority ahead of elections? Will it be used for pork-barrel administration? Where will it be spent?" How do you respond to such suspicions and criticisms from the opposition?
 
[Park Hong-keun]: There is the global credit rating agency Moody's. Two days ago and yesterday, they issued an unusually favorable report. They stated that establishing this Future Response Fund struck a balance between economic growth and fiscal soundness, and noted that utilizing part of the additional tax revenue to reduce government bonds rather than spending it entirely is favorable for international credit ratings. I would like to ask the opposition party where they think this substantial additional tax revenue should be spent. We cannot spend all of it in a single year, nor can we use it only to pay off debt, which would leave us without money to invest when proper investment is needed. That is why we are doing both. First, it serves as a strategic investment platform. As the war for AI super-gap technology hegemony has begun, we must redesign our economic and social systems through proper investments over these two to three years. One aspect is that we have boldly leaped into this decisive arena.
 
[Kim Tae-hyun]: Yes.
 
[Park Hong-keun]: Second, as I mentioned earlier, we must move beyond the limitations of a single-year general account-centered budget system where more is spent when more is earned and less is spent when less is earned. Therefore, as I stated, during boom times we do not spend all tax revenue increases on consumption, but save them to provide fiscal reinforcement during recessions when revenues are low, which I see as a very wise approach.
 
[Kim Tae-hyun]: The government issued a legislative notice. In drafting the bill regarding its uses, it states that the fund can also be used for projects designated by presidential decree outside the uses specified by law. What does this mean?
 
[Park Hong-keun]: We established five accounts there, and four of those project areas correspond directly to what I mentioned earlier by account. So those uses are specifically stated in the law. However, because of the recent AI grand transformation, the pace of technological change is extremely fast. As change happens so quickly, unexpected new policy demands could arise.
 
[Kim Tae-hyun]: That could happen.
 
[Park Hong-keun]: This supplementary mechanism was created to respond flexibly and adaptably to such urgent fiscal needs. For instance, there is a growth engine account inside it. While we have specified expenditures for artificial intelligence, national strategic technologies, and research and development, what if a completely new technology suddenly emerges? Just because it is not specified in the law does not mean it cannot be pursued; rather, it means I would submit the project to the National Assembly and implement it once approval is granted.
 
[Kim Tae-hyun]: So it can be understood as a concept similar to a reserve fund to flexibly respond to possible future contingencies?
 
[Park Hong-keun]: While it might differ somewhat from a reserve fund—
 
[Kim Tae-hyun]: In terms of concept.
 
[Park Hong-keun]: Some people suggest, "Isn't this a slush fund?" But that is not true. This fund was not created for political purposes, but represents investment costs tailored to our golden window for the AI transition, and everything must undergo prior deliberation in accordance with the National Finance Act and the National Assembly Act. We submit an operation plan and operate within the scope permitted by the National Assembly. While other funds are allowed to operate flexibly by 20 to 30 percent, we likewise cannot establish new projects; we can only increase funds within that range permitted by the National Assembly.
 
[Kim Tae-hyun]: Understood. We will conclude here. We have been speaking with Park Hong-keun, Minister of Planning and Budget. Thank you.
 
[Park Hong-keun]: Thank you.

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