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On December 28 of last year, a day before the presidential office's return to Cheong Wa Dae, the South Korean national flag Taegukgi flutters while Cheong Wa Dae appears relatively tranquil. The presidential phoenix standard is scheduled to be hoisted at midnight on the 29th. The photo shows the view of Cheong Wa Dae as seen from the Government Complex Seoul in Jongno-gu, Seoul, on the 28th. / Reporter Park Sung-il

Cheong Wa Dae stated on the 26th that "the national debt ratio will drop significantly."

This is interpreted as Cheong Wa Dae directly stepping in to address concerns raised over the government creating a "Future Response Fund" estimated at over 150 trillion won using surplus tax revenue instead of paying down national debt.

A Cheong Wa Dae official met with reporters at the Chunchugwan press center that day and stated, "While the actual national debt level will become clear once the budget proposal is unveiled on September 1, you will be able to see the debt ratio decrease by a substantial margin."

The official said, "Although modest, we paid off a portion of government bonds through the supplementary budget," adding, "Next year, we also plan to issue fewer government bonds, which could effectively be seen as debt repayment."

The official continued, "According to the medium-term fiscal plan, when our administration launched last year, the national debt-to-GDP ratio for 2029–2030 was projected at 60%, but we currently project it to be lower than that."

The official noted, "We are covering the deficit by issuing 110 trillion won in government bonds a year. While the view that it would be good to pay off bonds with increased tax revenue is not entirely wrong, there is no certainty that tax revenues will come in this high the year after next."

The official further explained, "A manageable level of national debt has an inevitable aspect. Rather than issuing new bonds to pay off debt, we intend to establish the Future Response Fund based on the idea expressed by President Lee Jae-myung during a Cabinet meeting: 'If spending 10,000 won today can generate 1,000,000 won tomorrow, isn't it appropriate to invest that way?'"

Regarding the Future Response Fund, the official said, "It is aimed at making targeted investments in the right places for responsible fiscal management by the government," adding, "It stems from the awareness that spending heavily just because tax revenues are high, and withholding spending just because revenues drop, does not represent responsible fiscal management."

The official emphasized, "It appears that unexpected, large-scale tax revenues will also come in next year," adding, "We seek to break away from conventional fiscal management approaches by addressing the role of public finance and the direction of national debt through the Future Response Fund."

Additionally, the official stated, "Among the government's state administration directions, financial resources are needed to support our future investment blueprint amid fierce national competition, including local-led growth, super-gap technologies, investments in new industries to prepare for the future, mega-projects, and future investments in seven key areas known as the 'Seven Seeds.'"

The official added, "We also intend to actively provide answers for future generations and youth through this fund. In tandem with the restructuring of local education grants, there is a need to separately secure financial resources for higher education, early childhood, and lifelong education. Because this is difficult under the current fiscal structure, we plan to set aside those funds by creating an education and talent account."

Addressing criticism that setting the discretionary business fund portion at 30% without requiring parliamentary approval could turn the Future Response Fund into a "government slush fund," the official explained, "Because this will be implemented by enacting a new Fund Establishment Act, it cannot be spent arbitrarily without National Assembly approval. It will go through parliamentary deliberation and control processes."

The official repeatedly emphasized, "One of the primary purposes of the Future Response Fund is fiscal stabilization. If a deficit occurs in the general account, rather than resorting to irregular fiscal maneuvers like in the past, we will clearly stipulate the preservation of general account deficits," adding, "It can never become a slush fund."

                                                                                                            Hong Sun-mi