President Lee Jae-myung announced that the 2027 budget proposal, amounting to 820.9 trillion won, will be executed based on three principles: efficient spending, prioritizing fiscal expenditure, and favoring local governments. The government plans to secure funds through a restructuring of expenditures amounting to 107.2 trillion won, which includes the elimination of over 2,100 existing projects, and will focus investments on youth and future growth drivers to achieve 'growth for all.'
In a speech to the National Assembly on November 2, President Lee emphasized, "We will transform into a growth model that allows all regions and citizens to share in the benefits." The government has increased total expenditures by 12.8% compared to this year, marking the largest total expenditure and growth rate in history.
Addressing concerns about fiscal soundness, President Lee stated, "There is little need to worry about fiscal debt," asserting that the country can manage its finances without issuing new government bonds. However, with rising welfare expenditures due to low birth rates and an aging population, it is crucial not to be overly optimistic about fiscal capacity. The National Assembly must rigorously verify the necessity and effectiveness of the budget. Excessive fiscal spending can distort resource allocation and drive up prices, ultimately increasing the burden on citizens.
It is essential to thoroughly filter out budget items that are included for political favors due to their local constituency nature, as well as overlapping and similar projects between ministries. Cash assistance programs with unclear policy effects should not be routinely included in the budget. If fiscal expansion is not used to improve citizens' lives but instead becomes a means to accommodate political demands or create a facade, the original purpose of the budget will be lost. The success of fiscal management depends not on how much spending is increased, but on how effectively limited resources are allocated to achieve tangible results.
The future response fund, established with an excess tax revenue of 162 trillion won due to the semiconductor boom, is a key focus of this budget review. While the government and ruling party emphasize that this fund is an investment in advanced industries and future generations, it is necessary to examine whether the method of accumulating substantial resources in a separate fund undermines fiscal transparency and the National Assembly's oversight. Once established, it is difficult to reduce expenditures or change the direction of the fund. The justification of future investment should not lead to lax verification of the fund's size and project feasibility.
The National Assembly's Budget Policy Office forecasts that an additional tax revenue of 57 trillion won will occur in 2028, but no further excess revenue is expected from 2029 onward. Given the uncertainty of how long the semiconductor boom will last, it is inappropriate to use temporary excess tax revenue as a basis for ongoing fiscal expansion. A concrete operational plan must be established to address how to maintain fund projects if tax revenue conditions change and who will bear the burden of any funding shortfalls.
The historical roots of the parliamentary system reflect a commitment to controlling the power to collect and spend citizens' taxes. The National Assembly's budget review authority is an institutional mechanism to rigorously question where, how much, and for what effects taxes are spent. Both ruling and opposition parties must prioritize the feasibility of individual projects over partisan interests and local constituency complaints, and the government must not hide its fiscal responsibilities behind the justification of future investments. Citizens' taxes should be used for the future without any waste. The principle of reviewing the 821 trillion won budget is to ensure that future generations inherit opportunities for growth without also passing on fiscal burdens.
* This article has been translated by AI.
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