Key facts
- South Korea plans to launch a 'Future Fund' to boost long-term economic growth.
- The fund will be financed by 'windfall revenue' derived from increased tax collection due to the AI and chip booms.
- Investment priorities include youth support, fostering growth engines, regional economies, and education.
- The fund will support the government's initiative to foster the AI industry and related sectors.
- South Korea is also considering allowing lawful hacking to delete illegal sexual material.
South Korea is set to launch a 'Future Fund' aimed at promoting long-term economic growth, utilizing what the government terms 'windfall revenue' generated from increased tax collection spurred by the artificial intelligence (AI) and semiconductor booms. The Ministry of Planning and Budget announced the plan, emphasizing that the AI industry is driving significant transitions across economic and social systems.
The government anticipates a sharp rise in domestic tax revenue, particularly corporate tax, due to the global chip boom. This fiscal capacity will be strategically invested through the Future Fund to enhance the country's potential economic growth rate. Key investment areas will include support for young people across various life stages, fostering government-identified growth engines, strengthening regional economies, and improving education.
Specifically, the fund will support the government's megaprojects focused on fostering the AI industry and related fields, as well as seven future-oriented sectors: small modular reactors (SMRs), nuclear fusion, renewable energy, quantum technology, aerospace, advanced biology, and supply chains for advanced materials and components. The fund is also intended to contribute to fiscal stability and efficiency.
In parallel, South Korea plans to overhaul its education budget allocation mechanism to better address the declining student population while bolstering higher education. The current system, which automatically allocates a percentage of internal tax revenue to local education offices, will be revised to reflect demographic changes and economic growth rates, ensuring grants do not fall below the previous year's level. This proposal is scheduled for review by the Cabinet and submission to the National Assembly.
Separately, South Korea is considering allowing investigators to lawfully hack into websites distributing illegal sexual material as part of a broader strategy to combat digital sex crimes. This initiative, involving multiple government agencies, aims to enable direct access for content removal and evidence collection, drawing parallels with systems in Australia and Britain.