Seoul:South Korea's budget minister emphasized the importance of creating a "virtuous cycle" involving fiscal spending, economic growth, and increased tax revenue, highlighting the government's Future Fund as a pivotal element in achieving this objective.

According to Yonhap News Agency, Budget Minister Park Hong-geun made these comments during a parliamentary audit at the National Assembly. He detailed the ministry's plan for active and effective fiscal management aimed at fostering growth.

Park outlined a strategy where proactive fiscal spending would stimulate economic growth, subsequently leading to higher tax revenue. He emphasized the need to revamp spending structures to maintain the sustainability of South Korea's public finances, with the Future Fund being instrumental in this process.

Set to be launched next year, the Future Fund will allocate "windfall tax revenue" from the booming semiconductor industry into investments that encourage sustainable economic growth. This revenue is defined as tax receipts that surpass the expected long-term trend due to significant economic changes or fluctuations.

Park described the Future Fund as both a strategic investment platform to enhance growth potential and a stabilization mechanism to ensure effective fiscal management. The additional fiscal space from the semiconductor upcycle will be invested in various areas, including youth, growth engines, regional economies, education, and talent development.

The budget minister also addressed the need to tackle ongoing issues such as the economic and social challenges posed by an aging population and disparities across different regions, generations, and income groups.