[비즈한국] As the government announces the creation of a 100 trillion won "Future Response Fund" fueled by tax surpluses from the semiconductor boom, concerns regarding fiscal soundness are mounting. The government has already signaled a "super budget" exceeding 800 trillion won based on semiconductor-driven excess tax revenue, and now it plans to create an additional fund that is subject to looser parliamentary oversight. Furthermore, separate from the Ministry of Planning and Budget, which will manage the Future Response Fund, the Ministry of Economy and Finance has initiated the creation of a strategic sovereign wealth fund that will also utilize excess tax revenues.
Since the Lee Jae-myung administration split the Ministry of Economy and Finance—which had maintained a balance between fiscal and tax policy—into the Ministry of Planning and Budget (responsible for budget management) and the Ministry of Economy and Finance (overseeing economic and tax policy), the pace of fiscal expansion has been accelerating. Notably, while member nations of the OECD, a club of advanced economies, have begun tightening their belts and managing national debt after the COVID-19 pandemic, South Korea remains the only country that continues to increase spending and grow its debt, fueling fears about fiscal health.
On the 21st, the government announced it would create a Future Response Fund based on the high probability of a significant tax surplus, aiming to invest in four key areas: youth, growth engines, regional development, and education/talent. Given the current semiconductor boom, the size of the Future Response Fund is projected to exceed 100 trillion won. The government justified its decision to use a fund rather than the budget by citing the need for "speed" in the era of Artificial Intelligence (AI), warning that failing to act quickly could result in missing out on the global transformation.
However, criticism has arisen that the fund could become a "slush fund" for the government, as the large sums of taxpayer money will be managed through a vehicle with less parliamentary oversight. Unlike the regular budget, the government can shift spending within major categories of a fund by 20–30% without submitting a modification plan to the National Assembly. Critics argue that if this leads to a deterioration in fiscal soundness, it could impose an even greater burden on future generations.
In reality, major global economies have been striving to reduce debt following the COVID-19 period, when expansionary fiscal policy was unavoidable. According to the OECD, a study of 32 member states (out of 38) with comparable fiscal statistics showed that South Korea is one of only seven countries where national debt increased when comparing the COVID-19 peak (2020) to the post-pandemic period (2024).
In the case of Greece, the national debt as a percentage of GDP decreased by a massive 55.1 percentage points in 2024 compared to 2020, marking the largest reduction. Portugal saw a decrease of 39.2 percentage points, Japan 21.7 percentage points, and Italy 19.1 percentage points over the same period. Israel’s debt fell by 18.4 percentage points, Spain’s by 17.5 percentage points, and Ireland’s by 15.9 percentage points.
It is noteworthy that the so-called "PIGS" countries—Portugal, Italy, Greece, and Spain—which were mired in fiscal crises during the 2008 global financial crisis, are all among the top countries for debt reduction. Furthermore, renowned welfare states such as Denmark (-15.9%p), Sweden (-7.2%p), and Norway (-3.3%p) have also tightened their belts since the end of the pandemic.
In contrast, South Korea’s national debt rose by 5.0 percentage points in 2024 compared to 2020, making it the country with the fifth-highest increase among the seven nations where debt grew. Chile experienced the largest increase at 9.3 percentage points, followed by Finland (7.1%p), New Zealand (7.0%p), and the Czech Republic (6.5%p), all of which saw higher increases than Korea. Behind Korea were Estonia (4.3%p) and Luxembourg (1.8%p).
The core problem is that among the countries where debt increased post-COVID, South Korea is the only one where total expenditure also grew. While Korea’s average total expenditure from 2021 to 2024 increased by 0.4 percentage points relative to GDP compared to 2020, countries like Chile (-0.5%p), Finland (-1.1%p), New Zealand (-0.3%p), the Czech Republic (-2.6%p), Estonia (-2.4%p), and Luxembourg (-2.1%p) all reduced their total expenditures. For these other countries, the rise in debt was due to low revenues despite belt-tightening. This confirms that South Korea is the only country currently increasing both its spending and its debt scale after the pandemic.