President Lee Jae-myung (이재명) said on July 13 he will create a future response fund financed by excess tax revenue from semiconductors. It is a plan to focus large additional revenue from an AI semiconductor boom on investment in future, youth, regional and education areas. Next year’s total spending will be set at 800 trillion won plus alpha, more than 10 percent above this year’s main budget, topping 800 trillion won for the first time.

In opening remarks at the National Fiscal Strategy Meeting he chaired at Cheong Wa Dae, Lee said unprecedented additional tax revenue is expected on the back of a major semiconductor boom triggered by the AI revolution. He said he will use the large additional revenue as funding for strategic investment to respond to the future. He said the extra revenue is valuable funding to be used during a golden time when global AI dominance is decided, and that a strategic investment platform is needed to ensure bold and sustained investment.

He also flagged support for three mega projects previously announced by the government, including semiconductors, physical AI and AI data centres. Lee said the government will mobilise all its capabilities to provide intensive support so investment is carried out properly to companies’ timetables. He said stable supplies of power and water are basic, and that the government will also expand transport, logistics and infrastructure and improve living conditions such as housing, education, healthcare and culture to create new growth hubs.

Lee also presented “growth for everyone” as a principle for fiscal management. He said the government will prepare a support system covering the entire life cycle for young people starting out in society, from jobs to housing to asset building. He said the social safety net will be strengthened so non-standard workers, which will inevitably increase in the AI era, can also be protected without gaps.

At the meeting, Planning and Budget Minister Hong-geun Park (박홍근) detailed the direction for drafting next year’s budget. Park said total spending next year will be expanded by more than 10 percent from this year’s main budget and set at 800 trillion won plus alpha. It is unusual for government fiscal spending to post a double-digit growth rate from the previous year, and it is the first time total spending will top 800 trillion won.

Park said the plan comprehensively reflects revenue conditions and the need for focused investment at the national level. He added that, based on higher tax revenue, the government will also pursue spending restructuring to create the largest investment capacity on record.