Minister Park Hong-geun of the Ministry of Planning and Budget, regarding the creation of the Future Response Fund, said it is "by no means to avoid a standing supplementary budget," adding that "when necessary, it will also make a major contribution to the stable and efficient management of national finances, such as by repaying Government Bonds."
Minister Park said this after discussing plans to promote the Future Response Fund and to reform the grant-in-aid (earmarked tax) for local educational finance at the first meeting of the Fiscal Management Strategy Council at Government Complex Seoul on the morning of the 21st.
Addressing the criticism that the Future Response Fund is a "standing supplementary budget," Minister Park said, "We cannot spend all at once in a consumptive way a large pool of resources that may be temporary and may flow in only over several years," adding, "That said, if we devote it only to so-called fiscal soundness, next year and the year after we could still face the problem of having to issue Government Bonds due to the gap between revenue and expenditure."
He added, "At this moment, through strategic investment we should lift the potential economic growth rate, have those results show up in economic indicators, ultimately expand revenue, and create a virtuous cycle that leads to further new investment—this is the perfect time to do so." He also said, "Once the fund is established, everything will be done under the Fund Management Act and the National Finance Act," adding, "We will of course execute it in accordance with the National Assembly's deliberation and legal grounds."
He also said it would be used as a fiscal stabilization tool to ease tax revenue volatility. Minister Park said, "If revenue is expected to be weak in the following year, we can use the surplus funds accumulated thus far to help keep the level of expenditure stable," adding, "If a tax revenue shortfall occurs, we will swiftly reinforce fiscal capacity with the accumulated surplus funds so that programs are carried out without disruption."
He added, "When necessary, we expect it will make a major contribution to the stable and efficient management of national finances, such as by repaying Government Bonds."
On the size of the fund, he said it "will be considerable." Minister Park said, "As this is directly tied to next year's budget proposal, we are in the final stages of formulation," adding, "We will be able to announce the specific size of the fund and next year's expenditure details through the budget proposal to be submitted to the National Assembly soon."