The $26.2 trillion "war supplementary budget" that the government recently submitted to the National Assembly is drawing criticism as unusual because it does not use Bank of Korea (BOK) surplus funds. The BOK pays corporate tax on its annual net profit and remits the remainder to the government after setting aside reserves; this is called a surplus. The government also used BOK surplus funds as a funding source in last year's supplementary budget. Accordingly, the National Assembly Budget Office noted, "This war supplementary budget does not comply with the National Finance Act and could undermine the transparency and efficiency of fiscal management." Some observers say, "Isn't the government trying to hold back the BOK surplus as a slush fund with a second supplementary budget in mind?"
◇ "Why not use the BOK surplus?" vs. "It considered the possibility of a tax revenue shortfall"
The surplus that the Bank of Korea (BOK) paid to the government based on last year's performance was 10.705 trillion won. The government initially expected the BOK surplus to be about 6.4191 trillion won, but an additional 3.4539 trillion won came in due to factors such as the strong U.S. dollar.
On this war supplementary budget, the National Assembly Budget Office issued a report titled "Analysis of the First Supplementary Budget for 2026." The report said, "Since 2008, the government has used the prior year's general account surplus or the Bank of Korea surplus as funding whenever drawing up a supplementary budget, but this time, the excess portion of the Bank of Korea surplus already paid into the treasury was not reflected in the revision of revenue, which differs from past cases."
The report went on to say, "Not using the Bank of Korea surplus as funding for this supplementary budget does not align with the intent of Article 17 of the National Finance Act, which holds that 'all income in a fiscal year shall be treated as revenue and all expenditure shall be treated as expenditure,' and could undermine the transparency and efficiency of fiscal management."
In response, the Ministry of Planning and Budget said, "Whether to revise revenue to include the BOK surplus is at the government's discretion." It also said, "There is a possibility of a tax revenue shortfall depending on future economic conditions, and the collection of non-tax revenue such as proceeds from the sale of NXC (Nexon's holding company) shares paid in kind for national taxes is uncertain." In other words, this year's tax revenue may come in below expectations and the NXC shares the government booked as non-tax revenue may not sell, so it left the BOK surplus as a kind of slush fund.
However, the National Assembly Budget Office said, "The way to use the BOK surplus should be reflected in the revenue revision and then discussed during the National Assembly's deliberation process to align with the principle of fiscal control." If the BOK surplus were included as funding for the supplementary budget, the National Assembly could discuss during deliberations how to use it—such as further repaying Government Bonds or finding additional expenditure items—but that opportunity has been blocked.
◇ Blue House and government repeatedly mention possibility of a second supplementary budget… "Stockpiling ammunition instead of paying down debt"
Some suggest the government left the BOK surplus untouched because it may have to draw up a second supplementary budget if the Middle East crisis drags on. Hong Ik-pyo, senior presidential secretary for political affairs, said after the war supplementary budget was submitted to the National Assembly, "If the Middle East war drags on longer, an additional supplementary budget may be needed in the second half." Minister Park Hong-geun of the Ministry of Planning and Budget also said, "It is not something that anyone can say is 'completely off the table' regarding a second supplementary budget."
On this, a researcher at a state-run think tank said, "From the government's perspective, the BOK surplus is money that has already landed in the wallet," adding, "Rather than repaying Government Bonds with this money to lower the government debt ratio, it appears to be thinking of stockpiling ammunition for a second supplementary budget."