Minister Park Hong-geun of the Ministry of Planning and Budget said he would increase both the "aggregates of local educational finance grant-in-aid (earmarked tax)" and the "earmarked tax per student" every year.
Currently, the education earmarked tax is mechanically allocated at 20.79% of the national tax. The government is pushing to revamp the earmarked tax, saying the allocation principle should be rationally adjusted in line with the decline in the school-age population. As concerns grew in the education sector that "education finances might be cut," Minister Park laid out these reform principles.
On the 25th, Minister Park said on his X (formerly Twitter), "This reform is by no means intended to cut the finances of elementary and secondary education," adding, "But because the classrooms of tomorrow and Korea are not the same as today for our children, we are trying to straighten the flow so that limited resources go where they are most needed and more effectively."
He said, "In 1972, when the current framework linking the earmarked tax to the national tax was established, nearly 1 million children were born in a year, but the number of children born last year was 250,000, a quarter of half a century ago," adding, "We need to fix the outdated framework to fit the generation."
Instead, Minister Park said, "The 'aggregates of the earmarked tax' will not be reduced compared to previous years," adding, "We will increase the overall elementary and secondary budget every year without any reduction or contraction in its scale." He continued, "The 'earmarked tax per student' will also increase every year," adding, "We will make sure the size of educational benefits grows each year."
Minister Park also said, "We will bolster higher, lifelong and early childhood education," adding, "The valuable resources secured through institutional improvements will be reinvested evenly in areas that have long desperately needed investment, such as university education, lifelong learning and infant and early childhood education." He added, "We will address the difficulty of high volatility in the earmarked tax depending on the national tax situation and make it more predictable."
At the same time, Minister Park made clear the principle that the shrinking "school-age population" must be reflected in the education earmarked tax formula. He said, "The demographic environment is very different now from when the national tax-linked structure was first created in 1972," adding, "We will naturally incorporate the era of fewer children into the criteria for calculating the earmarked tax."
Meanwhile, under the automatic allocation principle for the national tax, 76 trillion won has been assigned this year for the local educational finance grant-in-aid (earmarked tax). That amount is expected to grow further. There are projections that this year's semiconductor excess tax revenue could reach 100 trillion won; if that happens, an additional 21 trillion won-level earmarked tax would flow down to city and provincial education offices. The government is pursuing such a formula overhaul, with options being discussed to reflect the trend growth rate and changes in the school-age population in the previous year's earmarked tax.