Minister Park Hong-geun of the Ministry of Planning and Budget said at the National Fiscal Strategy Meeting on the 13th that "next year's national tax revenue will reach at least 500 trillion won," adding, "we will draw up the largest budget ever by increasing total expenditure by at least 10% from this year's main budget to 800 trillion won plus alpha (α)."
The Minister presented to President Lee Jae-myung the "2027 budget proposal and midterm fiscal management direction" that included these details. The Minister said, "next year's national tax revenue is expected to far exceed the initial forecast of 412 trillion won to 500 trillion won plus alpha, the highest ever."
He added, "we will set next year's total expenditure at 800 trillion won plus alpha, more than 10% higher than this year's main budget (727.9 trillion won), the largest scale ever." He went on, "starting the year after next, as government policy outcomes begin to appear, we will gradually stabilize the expenditure growth rate."
The Minister also unveiled a plan for a future response fund using additional tax revenue. Park said, "the future response fund is a paradigm shift in fiscal management that overcomes the limits of single-year budgets, a strategic investment platform that supports a rebound in potential growth, and a fiscal stabilization device that eases tax revenue volatility." Park added, "we will accumulate into the fund large tax revenue increases that exceed the long-term trend."
The Minister said the future response fund will focus investments beyond single-year expenditure plans in ▲ the younger generation ▲ new growth engines ▲ local investment ▲ talent development. Park also said, "when needed, such as tax revenue shortfalls due to changes in economic conditions or supplementary budgets, we will use the fund's surplus to shore up fiscal capacity in a timely manner and contribute to fiscal smoothing and stabilization."
At the same time, Park said the government will push a 50 trillion won restructuring of fiscal expenditure next year, nearly twice this year's target (27 trillion won). The Minister said, "we will conduct a zero-based review of all programs and carry out the largest-ever restructuring of fiscal expenditure, including a 15% cut in discretionary expenditure, 10% in mandatory expenditure, and 10% through program abolitions."
Concerns over fiscal soundness are also growing due to the expansionary fiscal policy. In response, the Minister said, "from this year through 2030, we will ensure the consolidated fiscal balance without social security fund improves from the initial plan in every year, and we will keep the national debt ratio below the targets set last year."
In the "2025–2029 midterm fiscal management plan" the government released last year, the outlook for the consolidated fiscal balance without social security fund as a share of gross domestic product (GDP) is ▲ 2025 -4.2% ▲ 2026 -4.0% ▲ 2027 -4.1% ▲ 2028 -4.4% ▲ -4.1%. The national government debt-to-GDP ratio is ▲ 2025 49.1% ▲ 2026 51.6% ▲ 2027 53.8% ▲ 2028 56.2% ▲ 2029 58%.