[Anchor]

The latest budget plan includes the creation of a future response fund using tax revenues that surged due to the semiconductor boom. However, concerns are being raised over whether it is appropriate to use temporary, windfall-like funds for projects requiring continuous spending, such as youth support. Fierce debate is expected during the National Assembly's review process.

Reporter Min Gyeongho has the details.

[Reporter]

The future response fund totals KRW 162 trillion, centered around increased tax revenues from the semiconductor boom.

The plan is to keep KRW 104 trillion as an emergency reserve for the future, and use about KRW 12 trillion instead of issuing government bonds.

The remaining KRW 45 trillion is planned to be allocated for youth support, future industries, regional development, and education.

However, the biggest controversy surrounds this KRW 45 trillion portion.

The National Assembly Budget Office, an institution that researches budgets for the parliament, has pointed out that nearly half of this amount consists of fixed expenditures that will have to be paid out continuously in the future.

To put it into perspective, it is like taking a temporary special bonus that came in for a moment and creating new fixed expenses to spend it all.

Furthermore, it has been analyzed that these excess tax revenues will only come in until the year after next, 2028, and drop to zero after that. This has sparked worries over what will be done then—whether it will have to be refilled with citizens' taxes again.

The Bank of Korea Governor has already expressed similar concerns.

[Shin Hyun-song / Bank of Korea Governor (October 22): "If continuous expenditures are created using temporary financial resources, we must pay special attention and monitor their sustainability."]ຊີ

Countries that have grappled with similar dilemmas enforce strict criteria on accumulating and withdrawing funds.

Ireland, which attracted global high-tech companies, placed its sharply increased tax revenues into a separate fund, making it impossible to withdraw them before 2041, when an aging-related crisis is anticipated.

Norway, which hit the oil jackpot, invests these profits overseas and restricts government spending to about 3 percent of its total assets per year.

Another point of contention is a clause that allows the government to spend up to 30 percent more on each project without parliamentary approval.

How best to spend the massive tax revenue secured after a long time is expected to be a subject of intense debate during the National Assembly's deliberations.

(Photo: Yonhap News)
(Video by Lee Chan-su | Video editing by Kim Jong-mi)