President Lee Jae-myung stated that now is not the time to be overly focused on immediate financial figures regarding next year's budget. He called for a shift towards 'productive finance' that prioritizes investments in artificial intelligence (AI) and advanced industries.
The ruling Democratic Party and the government plan to incorporate five key areas into the proposed budget, which is expected to exceed 800 trillion won, the largest in history. These areas include expanding future growth engines, supporting youth, promoting local-led growth, addressing K-shaped polarization, and ensuring public safety.
During a Cabinet meeting at the Blue House, President Lee remarked, "With the AI revolution, advanced industries like semiconductors are rapidly growing, presenting our economy with unprecedented conditions. We must seize the opportunities created by this industrial transformation to significantly improve the lives of our citizens."
He emphasized the need to utilize increased financial resources as seeds for future growth, stating, "We must wisely invest precious future resources in efficient and productive areas to grow today’s 10,000 won into 100,000 won tomorrow and beyond."
President Lee particularly stressed the importance of optimizing fiscal spending. He instructed that unnecessary budgets should be decisively adjusted to ensure sound financial management, focusing on promoting super-gap growth, alleviating K-shaped polarization, achieving balanced development, nurturing talent, and building a future ladder for youth.
Prior to the Cabinet meeting, the ruling party and government held discussions in the National Assembly to establish a special account for the semiconductor industry to provide comprehensive support. They also agreed to back the development of physical AI solutions utilizing tacit knowledge from manufacturing sites and to develop frontier-level AI models. Plans include supplying 10,000 GPUs for AI computations and securing power and water resources through investments from Korea Electric Power Corporation and Korea Water Resources Corporation.
In the area of future growth, investments will focus on the so-called 'Next 10' strategic technologies. This includes expanding research and development for lunar landing by 2030, increasing pilot projects for autonomous vehicles, and raising electric vehicle subsidies to the highest level ever. Additionally, loans to support the growth of startups and venture companies will be significantly increased.
For youth initiatives, a 'University Internship Semester' will be introduced, allowing students to earn credits for working at companies for one semester. A new 'Our Child Independence Fund' will provide up to 1.2 million won annually for children up to 18 years old, and support for marriage and childbirth will shift from tax deductions to grants and subsidies. Child allowances will be expanded and restructured into a basic child allowance.
Special grants to support facility investments by anchor companies relocating to local areas and future growth support funds for regions will also be established. Full tuition support for local national universities and the creation of a special account for essential medical services in regions are planned, along with a significant increase in the supply of rental housing for youth in transit areas.
President Lee emphasized the need for a practical and effective approach to policy implementation, stating, "When reforms are pursued, raising voices and setting clear goals can earn praise, but it can also lead to significant resistance and backlash. We need to approach this in a practical and effective manner."
Following the budget proposal, President Lee urged the National Assembly and the public to consider reasonable alternatives with an open mind, asking for collective efforts to ensure that next year's budget serves as a catalyst for growth for all.
* This article has been translated by AI.
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