With the semiconductor cycle booming and tax revenue now expected to come in at least 15 trillion won higher than initially forecast, the government is said to be drawing up ways to use the funds effectively as of the 14th.
When revenue comes in higher than projected at the time of budget formulation or when expenditure falls, the surplus funds (world surplus) must first be used to settle the grant-in-aid (non-earmarked tax) and the grant-in-aid (earmarked tax) for educational finance under the National Finance Act. After that, they are used for grants to the Public Fund Repayment Fund and to repay government debt. Any remaining resources can be used as funding for a supplementary budget.
However, with President Lee Jae-myung recently broaching the idea of using surplus tax revenue in a different way than before, related discussions are gaining speed. At a press conference on the 8th marking the first anniversary of the inauguration, Lee said regarding the use of surplus tax revenue, "We should invest in a direction that serves future generations and builds Korea's growth potential. That is what I am thinking."
In this regard, discussions are reportedly underway on creating a new "future response fund" (tentative name) financed by surplus tax revenue. Unless a supplementary budget is drawn up, even if surplus tax revenue comes in, its uses are all predetermined under the National Finance Act, so the idea is to establish a fund, pool the money there, and use it later where needed. Within a certain ratio, a fund can deploy resources without National Assembly review. However, if surplus tax revenue is used in a manner different from the existing approach, separate legislation, such as amending the National Finance Act, is expected to be necessary.
Some also expect that surplus tax revenue could be used to finance a "Korea-style sovereign wealth fund" to be launched in the second half. The Korea-style sovereign wealth fund benchmarks Singapore's Temasek and is an investment vehicle that grows assets over the long term for future generations. At the end of last year, the government announced it would establish a 20 trillion won sovereign wealth fund, and adding surplus tax revenue as funding is also being discussed. The relevant ministries—the Ministry of Finance and Economy and the Ministry of Planning and Budget—say nothing has been decided and further discussion is needed.