Park Hong-keun, the Minister of the Ministry of Economy and Finance, embarked on a nationwide communication effort following his first budget proposal since taking office. On September 10, he visited Busan to outline the government's plans and solutions regarding significant financial issues, including the budget increase conflict for the construction of the Gadeokdo New Airport and local government objections to the establishment of a future response fund.
Explaining the significance of his visit to Busan, Park stated, "Busan is a key area symbolizing the government's '5 Extremes, 3 Specials' balanced development strategy." He added that he came to assess local achievements, such as the selection of Busan National University for a national university support package, the passing of the feasibility study for Busan National University Hospital, and support for essential local medical services.
During his visit, Park also addressed specific requests from Busan City, including the construction of the North Port Arena Dome and a visit to the health center in Gijang County, which is on the front lines of local healthcare. He emphasized the government's commitment to providing localized financial support, stating, "We are continuously communicating with the public and the National Assembly to ensure there is no misunderstanding regarding the scale and direction of the budget."
Regarding the budget increase and conflict surrounding the Gadeokdo New Airport construction, Park expressed a determination to overcome challenges through institutional and legal improvements. He noted, "Due to unexpected variables such as the Middle East conflict, there is a need for an increase of over 300 billion won in project costs." He acknowledged differences in positions among the Ministry of Land, Infrastructure and Transport, the Ministry of Finance, and the Ministry of Economy and Finance, but assured that discussions are ongoing with the Office for Government Policy Coordination to find a clear solution, with a general direction already established.
Park proposed an approach through amending the 'Gadeokdo New Airport Special Act' as a stable solution that does not burden specific departments. He cautioned that applying the budget increase to only certain projects could lead to allegations of favoritism, stating, "We are reviewing ways to quickly resolve these institutional obstacles through the special law, and if both parties can come together, we can expedite the process."
On the backlash from local governments and education offices regarding changes to the local allocation tax formula due to the establishment of a future response fund funded by excess tax revenue from the semiconductor industry, Park clarified his stance. He remarked, "Reforming local finances is a matter that requires national and social public discourse," explaining that it is more rational to save funds during good revenue periods for stable use in the future rather than spending it all at once.
He added, "Despite changes in the formula, next year's local allocation tax will increase by 3.5 trillion won compared to this year, and we have significantly expanded support for local autonomous projects through comprehensive grants from special local accounts." He emphasized that by 2028, the scale of local allocation taxes is expected to exceed 100 trillion won, greatly enhancing local autonomy and financial capacity. He also mentioned that communication with local governments and frontline services will continue to strengthen through collaboration with the relevant ministries, including the Ministry of Interior and Safety and the Ministry of Education.
Addressing concerns about the sustainability of the future response fund, which relies on the semiconductor market cycle, Park outlined a flexible project management policy. He stated, "Next year, we expect to secure approximately 162 trillion won in resources, of which 45.4 trillion won will be used for project expenditures, and 12.5 trillion won will be allocated to reduce the issuance of government bonds."
Regarding the potential depletion of the fund, he noted, "As this is a new scheme based on excess tax revenue from the semiconductor boom, the depletion timeline may vary depending on revenue and project expenditure speed." He assured that while focusing on short-term concentrated projects like bulk GPU purchases and infrastructure investments, projects requiring sustainability will be transitioned to the general account or other funds through the National Assembly review process to ensure continuity.
* This article has been translated by AI.
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