The South Korean government has incorporated a plan to streamline 44.2 trillion won in its 2027 budget proposal. The expenditure efficiency task force (TF) will begin operations early in November to identify potential savings. The government aims to enhance public participation in budget formulation, increasing the youth representation in the participation group from the current 20.7% to 40%.
On October 26, the Ministry of Strategy and Finance held the third meeting of the Fiscal Management Strategy Council at the Government Seoul Building, chaired by Minister Park Hong-keun. The meeting discussed and confirmed three main agendas: the operational results and future plans of the expenditure efficiency TF, measures to activate the public participation budget system, and reforms to the fiscal execution management system. Eleven private committee members and officials from relevant ministries participated in the meeting.
Through the expenditure efficiency TF, which was launched at the end of last year, the government has reflected 88 projects totaling 44.2 trillion won in the 2027 budget proposal. The initiative involved 41 ministries and agencies, along with over 80 private committee members, who conducted more than 100 meetings to identify over 300 projects.
Key projects include reforms to the local education finance grant system and improvements to the unemployment benefit payment system. The local education finance grants will be adjusted to eliminate the automatic linkage to domestic taxes, instead reflecting economic growth and the school-age population. The unemployment benefits will be revised to address the issue of recipients receiving more than they would earn while working.
The government has also streamlined support programs for small and medium-sized enterprises. A comprehensive review of 472 projects spread across 17 ministries led to the consolidation or reduction of 232 projects. Additionally, 47 projects identified as redundant or similar within the information and communication technology (ICT) fund were restructured. The National Scholarship II program, which has seen a decline in participating universities, will be abolished, with funds redirected to support low-income students at national and private universities in rural areas. The government plans to enhance support for long-term and advanced training in high-demand industries such as artificial intelligence and digital technology, while streamlining short-term and general training under the National Tomorrow Learning Card program.
The expenditure efficiency TF will begin its work in November to identify efficiency projects for inclusion in the 2028 budget proposal and the national fiscal management plan, with additional reviews of integrated performance evaluation system improvements. If necessary, in-depth evaluations of fiscal projects will follow. The task force will utilize an AI assistant called 'Expenditure Magnifier' for project reviews and analysis of feedback from the National Assembly, the Board of Audit and Inspection, and the media, while also expanding participation from private committee members and civil society.
The public participation budget system will also be revised. Since its introduction in 2018, a total of 298 projects have been included, amounting to 543.9 billion won. The 2027 budget proposal includes a record 301 billion won for 21 projects. The government plans to continue expanding participatory budgeting and set medium-term goals to reduce variability in annual funding amounts.
To encourage public proposals, the government will lower barriers for participation. Monthly 'Outreach for Public Proposals' sessions will be held, allowing citizens, experts, and officials to collaboratively design projects. An AI writing assistant will be introduced online to facilitate this process. The public will be able to view both the public participation budget and the resident participation budget on a single screen, with updates on the progress from proposal review to budget inclusion.
The number of youth participants in the public participation group will double from 120 to 240, increasing the proportion of participants aged 19 to 34 from 20.7% to 40%. The government will also hold a contest for youth policy ideas, offering awards and recognition for outstanding proposals. Selected projects will include the names of the proposers.
The government plans to expand financial education for citizens, creating digital courses and in-depth content on feasibility studies and private investments, while establishing a global financial capacity development center in Hongneung to operate ongoing educational programs.
The fiscal execution management system will be restructured to focus on the actual amounts spent in the field rather than just the budgeted amounts. Specific implementation plans will be announced separately on the 27th, reflecting the outcomes of the meeting.
Minister Park stated, "The nation's finances belong to the people. Every penny must be spent without waste, and the public should be able to see this process transparently."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.