Budget minister calls for 'virtuous cycle' of spending, growth and tax revenue
Budget Minister Park Hong-geun speaks during a parliamentary session in Seoul, Sept. 28. Yonhap
Korea's budget minister on Thursday stressed the need to establish a "virtuous cycle" of proactive fiscal spending, economic growth and higher tax revenue, noting the government's proposed Future Fund could play a key role in achieving this goal.
Budget Minister Park Hong-geun made the remarks during a parliamentary audit at the National Assembly, outlining the ministry's vision for pursuing proactive and effective fiscal management to lay the groundwork for growth.
"We will establish a virtuous cycle in which proactive fiscal spending drives growth, which in turn generates higher tax revenue," Park said.
"We will boldly overhaul spending structures to ensure the sustainability of the country's public finances," he added, describing the Future Fund as a critical tool for achieving this goal.
The Future Fund, which the government plans to launch next year, will channel "windfall tax revenue" from the semiconductor boom into investments aimed at promoting sustainable economic growth.
The government defines windfall revenue as tax receipts exceeding their long-term trend due to structural economic changes or significant economic fluctuations, such as an industrial supercycle.
"The Future Fund is a strategic investment platform to bolster our growth potential. It is a stabilization mechanism to ensure stable and effective fiscal management," Park said.
"Through the fund, we will use the additional fiscal space created by the semiconductor upcycle to invest in young people, growth engines, regional economies, education and talent development, rather than spending it all within a single year," he added.
Park said the ministry will work to address persistent challenges, including the growing economic and social burdens of an aging population and disparities across regions, generations and income groups.