South Korean budget minister rejects 'slush fund' claims over Future Response Fund
In short
Minister of Planning and Budget Park Hong-geun (박홍근) told a National Assembly audit on October 8 that opposition claims the planned Future Response Fund would become President Lee Jae-myung's "slush fund" were groundless, saying political attacks do not change the facts. People Power Party lawmaker Lim Lee-ja (임이자) called for the fund to be withdrawn, arguing it could bypass parliamentary control and borrow at high rates to hold reserves. Park said the fund, included in next year's budget plan, is designed under the National Finance Act and will channel extra fiscal room from the semiconductor boom into long-term investment.
Read the full story 2 min read
South Korea's Minister of Planning and Budget Park Hong-geun on October 8 rejected opposition claims that the planned Future Response Fund would become a "slush fund" for President Lee Jae-myung. Answering lawmakers at the Finance, Economy and Planning Committee's audit of his ministry at the National Assembly in Yeouido, Seoul, Park said that "political attacks do not change the facts" and that "it is absolutely not so", according to Asia Economy and the Chosun Ilbo. A Newsis headline quoted him as saying the claim had no basis and that the fund was designed under the National Finance Act. [ 2 , 3 , 4 , 7 ]
Lim Lee-ja of the People Power Party, who called for the fund to be withdrawn, cited a National Assembly Budget Office review opinion that responding to a tax revenue shortfall without a supplementary budget is unconstitutional, and argued the fund could become a standing supplementary budget that bypasses parliamentary control. "They plan to pile up 104 trillion won as surplus funds and issue 106 trillion won in government bonds," she said, adding that with bond yields above 4%, borrowing at high rates to earn lower returns would be "reverse-margin fiscal management". [ 3 ]
Park replied that the fund was designed under the National Finance Act and has the character of both a financial account and a project account. Asia Economy reported that the structure, under which the government would issue 100.1 trillion won in deficit-covering bonds next year while setting aside 104 trillion won in the fund, is drawing criticism from the opposition and academics as borrowing to hoard cash. Park cited Norway, saying it keeps issuing government bonds and that its official policy is to keep issuance steady because large swings create unnecessary costs. [ 3 ]
People Power Party lawmaker Park Soo-young called the fund the "slush fund of a South Jeolla cartel", which the minister denied, saying additional semiconductor fab construction is a national strategic investment in the industry, not a regional matter. He agreed with Democratic Party lawmaker Moon Jin-seok (문진석), who described the slush fund attack as partisan language, calling it "a completely groundless point". [ 3 ]
In his work report, Park said the fund, whose creation is reflected in next year's budget proposal, is "a strategic investment platform to raise the potential growth rate and a fiscal stabilisation device", Yonhap reported. He said it would let the government use additional fiscal room from the semiconductor boom for investment in youth, growth engines, regions, and education and talent instead of spending it within a single year. He also pledged support for three mega projects and AI, and for seven national strategic technologies including fusion, small modular reactors, quantum and aerospace. [ 1 ]
Why it matters
The fund is part of the government's budget plan for next year, and Asia Economy reported that criticism of borrowing while setting aside reserves is growing among the opposition and academics. The exchange shows the fund will be contested in parliament as the budget is reviewed.
Key facts
- Park Hong-geun, Minister of Planning and Budget, appeared on October 8 at the National Assembly audit of his ministry by the Finance, Economy and Planning Committee. [ 1 , 2 , 3 , 5 , 6 , 7 ]
- Park rejected opposition claims that the Future Response Fund would be President Lee Jae-myung's slush fund, saying political attacks do not make it a fact and "it is absolutely not so". [ 3 , 4 ]
- The plan to set up the Future Response Fund is reflected in next year's budget proposal. [ 1 , 4 ]
- Park described the fund as a strategic investment platform to raise potential growth and a fiscal stabilisation device. [ 1 ]
- Asia Economy reported the government plans to issue 100.1 trillion won in deficit-covering bonds next year while setting aside 104 trillion won as surplus funds in the Future Response Fund. [ 3 ]
- People Power Party lawmaker Lim Lee-ja called for the fund's withdrawal, saying it could become a standing supplementary budget that bypasses parliamentary control. [ 3 ]
- Park said the fund was designed under the National Finance Act and has both a financial account and a project account. [ 3 ]
Confirmed by several sources
- Park Hong-geun answered lawmakers' questions at the Finance, Economy and Planning Committee's audit of the Ministry of Planning and Budget at the National Assembly on October 8. [ 1 , 2 , 3 , 5 , 6 , 7 ]
- Park rejected claims that the Future Response Fund would become President Lee Jae-myung's slush fund. [ 3 , 4 ]
- The Future Response Fund is to be newly established under next year's budget plan. [ 1 , 4 ]
- Park said the fund would use additional fiscal room from the semiconductor boom for investment in youth, growth engines, regions, and education and talent rather than spending it within a single year. [ 1 ]
Still unclear
- How large the government's bond issuance next year will be. Lim Lee-ja was quoted as saying the government plans to issue 106 trillion won in government bonds, while Asia Economy separately cited 100.1 trillion won in deficit-covering bonds; the documents do not explain the difference.
- Whether the fund's spending will be concentrated in the southwest region. People Power Party lawmaker Park Soo-young (박수영) made the claim; the minister denied it, and no document gives a breakdown of planned spending.
- Whether funding a revenue shortfall without a supplementary budget is unconstitutional. Lim cited a review opinion from the National Assembly Budget Office saying so; the minister's answer, as reported, did not address that point directly.
What local media are saying
Timeline, local time
- Yonhap reports the minister's work report describing the Future Response Fund. [ 1 ]
- Newsis publishes photos of Park answering questions at the audit. [ 2 ]
- Asia Economy reports the exchanges over the 'slush fund' claims. [ 3 ]
- Chosun Ilbo reports Park's rebuttal of the opposition criticism. [ 4 ]
- Maeil Business publishes photos of Park taking the oath at the audit. [ 5 , 6 , 7 ]