No rift with budget ministry, education minister says, as grant reform talks near conclusion

Education Minister Choi Kyo-jin said Friday that talks with the Ministry of Planning and Budget on reforming the local education finance grant system are in their "final stage," adding that there had been no disagreement over a proposed Future Human Resources Fund.

Speaking at a plenary session of the National Assembly's Education Committee, Choi responded to committee chair Kim Hee-jung of the People Power Party, who asked whether the direction of the grant reform had been settled at all. "There has been broad agreement on which formula would better reduce volatility and ensure that support is delivered in a meaningful way," Choi said.

She said the two ministries were working toward a plan that would address the education sector's particular concern over the 20.79 percent benchmark. "We are close to putting together a plan that preserves both elements — through mutual concessions and a convergence of views with the Ministry of Planning and Budget," she said.

Choi said a final plan had not yet been confirmed. "The Education Ministry's position and the Ministry of Planning and Budget's position have not been fully resolved, so I ask for a little more patience," she said.

Asked about the Education Ministry's stance on the 20.79 percent rate at which the grant is linked to domestic tax revenue, Choi said the ministry had from the outset supported maintaining that benchmark while channeling surplus tax revenue into a Future Human Resources Fund for higher education, early childhood education and AI education. "The Education Ministry, from the outset, proposed placing a cap on the grant to prevent it from growing excessively, while keeping the linkage rate intact," she said.

Choi said the Ministry of Planning and Budget would likely serve as the lead agency for the new future-response fund to be established, and that talks were underway to have the Education Ministry's vice minister chair the education subcommittee so that decisions on the education budget could be made substantively within that body.

Meanwhile, the Ministry of Planning and Budget is expected to announce its plan to reform the local education finance grant system as early as next week. The ministry is considering scrapping the current regime, under which 20.79 percent of domestic tax revenue is automatically allocated to the grant, and replacing it with a formula that factors in the nominal growth rate and the decline in the school-age population.