Is the New Future Response Fund a Good Idea?

Plans are underway to establish a Future Response Fund worth a total of 162 trillion won, which would set aside increased tax revenue generated by the semiconductor boom and other factors and invest it in youth, growth engines, regional development, and education. The aim is to use excess tax revenue for productive spending and strengthen fiscal capacity.

I agree that there is a need to enhance the flexibility and strategic nature of fiscal management. However, it is necessary to examine whether this must be done through the creation of a separate large-scale fund. Fiscal flexibility must not come at the expense of weakening the National Assembly’s fiscal oversight and transparency.

First, there is concern that the National Assembly’s budgetary control could be weakened. Funds have greater operational autonomy than the general budget, and within a certain range they can revise spending plans without prior approval from the National Assembly. In particular, if an exception is applied allowing the Future Response Fund to adjust up to 30% of spending on major items on its own, even though it is not a financial fund, as much as 48.6 trillion won could be reallocated without prior review by the National Assembly. This could weaken fiscal oversight and the predictability of resource allocation.

Second, the sustainability of the funding is also problematic. The Future Response Fund relies primarily on increased tax revenue stemming from the boom in the semiconductor industry and other factors, but the economy and tax revenue are highly volatile. If long-term and recurring spending programs are launched on the basis of temporary tax revenue increases, additional funding will be needed once the fund is exhausted. If the general budget ultimately has to bear the burden, future fiscal burdens may only grow. A financing plan for after the fund is depleted should be reviewed in advance.

Third, the justification for creating a separate fund must also be clear. Since budget programs, funds, and special accounts with similar purposes already exist, it is necessary to examine whether the functions of the Future Response Fund can be carried out within the existing fiscal system. Clear evidence is needed as to what additional benefits a separate fund would provide compared with the existing budget.

Fourth, the complexity of the fiscal system and compartmentalized fiscal management may increase. As the number of funds grows, resources become dispersed across multiple accounts and funds, making it harder to adjust spending priorities for the government as a whole, while duplication and inefficiency across programs may also increase. Fiscal soundness is not only a matter of national debt, but also of how efficiently limited resources are allocated.

Fifth, mechanisms are needed to ensure performance management and accountability. In addition to existing settlement reviews, audits, and fund management evaluations, concrete performance evaluation standards commensurate with a 162 trillion won fund are required. The government’s proposed NEXT principles—capital accumulation, bold investment, flexible execution, and urgency—should be translated into concrete criteria for project selection and evaluation, and the evaluation results should be reflected in the following year’s resource allocation. Since many of these are long-term investments, their medium- to long-term fiscal effects should also be assessed.

Flexibility and strategic management in fiscal operations are necessary for proactive investment in future sectors. However, the goal of future investment alone does not justify operating large-scale financial resources through a separate fund. The larger the amount of resources involved, the more strictly fiscal oversight by the National Assembly, transparency, sustainability, and accountability must be secured.

For the Future Response Fund to become a genuine platform for future investment, principles for allocation and control must be established before simply accumulating resources. The scope of deliberation and oversight by the National Assembly should be clearly defined, overlap with existing fiscal programs should be addressed, and standards for project selection and performance evaluation should be made concrete.

Without sufficient control mechanisms, the Future Response Fund may end up increasing the complexity of the fiscal system and expanding administrative discretion rather than delivering fiscal innovation.

Hyesung Jang, Ph.D. in Public Administration, Korea University

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Original title: 미래대응기금 신설, 이대로 괜찮은가

Author: Hye-seong Jang

Date: 2026-09-14

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&pn=1&idx=29531