Cheong Wa Dae says future response fund to target inequality, youth, regional development

Cheong Wa Dae said Tuesday that additional tax revenue from the semiconductor sector will be channeled into reversing the decline in potential growth, easing K-shaped inequality, promoting balanced regional development and improving education.

Ryu Deok-hyeon, presidential adviser for fiscal planning, made the remarks on "Fact Bangatgan Live," broadcast through the KTV YouTube channel, saying the government faces "absolutely critical challenges going forward."

Ryu said the country's potential growth rate has been falling by 1 percentage point every five years for the past two decades. "There is a generational imperative to reverse that trend," he said. "Growth is happening, but K-shaped inequality — the negative side — is clearly there. We face the challenge of how to ease that polarization."

He also stressed the importance of regional development. "Our government has a vision for balanced regional development and region-led growth," Ryu said. "We believe the regions must thrive for the nation to thrive — that is the critical challenge we have in mind."

Ryu raised the issue of youth as well. "In some ways, the younger generation can be seen as the most vulnerable group right now," he said. "How to show them a future vision — policy for youth who lack adequate support, and the question of education — these are the challenges we face today."

Ryu also suggested the Future Response Fund could be linked to the three mega projects the Lee Jae Myung administration is pursuing.

"The three mega projects our government announced a few days ago are essentially a blueprint for the industries that will secure this country's future," he said. "Companies will invest, but the government also needs to complement that by providing the necessary infrastructure and various policy measures. We need to draw up an investment plan for that future as well."

Returning to the subject of youth policy, Ryu said the government "is preparing truly sweeping policies for young people," adding that measures would be needed "to reflect their needs in housing, employment and aspirations."

Asked about the road map for the Future Response Fund, Ryu said it would need to be established through special legislation. "We plan to consult and communicate closely with the National Assembly to ensure all procedures are properly in place," he said.

He added that the government would share further details at a national fiscal strategy meeting in about a week. "We will comply with all legal procedures the government is preparing, and work together with the government to communicate sufficiently and build consensus through public institutions such as academia and the media," he said.