Financial Services Commission’s New Projects Budget for Next Year Set at 2.5 Trillion Won... "Detailed Plans and Budget Cuts Needed"

Preliminary Review Report from the Political Affairs Committee
No Detailed Business Plan for the National Growth Fund
"Need to Address Changes in Scale and Policy Fund Issues"
Youth Future Savings Program, Demand Forecast Significantly Overestima

The Financial Services Commission has faced criticism for lacking detailed plans regarding new projects scheduled to be implemented for the first time next year. There are concerns that demand forecasts have been overestimated, indicating a need for budget adjustments, and some projects may require budget cuts.

According to the National Assembly on November 13, Jung Myungho, Senior Expert of the National Policy Committee, pointed this out in the preliminary review report on the 2026 budget proposal under the jurisdiction of the Financial Services Commission. The commission has planned five new projects for 2026: the National Growth Fund, the Youth Future Savings Program, support for trade response programs, the Sunshine Loan, and subrogation for crisis response special guarantees. The total budget allocated for these projects is 2.492923 trillion won. Specifically, the commission allocated 1 trillion won to the National Growth Fund, 744.625 billion won to the Youth Future Savings Program, 630 billion won to support trade response programs, 100 billion won for the Sunshine Loan, and 18.298 billion won for subrogation on crisis response special guarantees. The National Growth Fund project is designed to support advanced strategic industries, such as artificial intelligence (AI) and semiconductors. The commission aims to create a fund worth 150 trillion won and has allocated 1 trillion won as a subordinated capital injection to the Korea Development Bank to serve as seed funding.

Jung first emphasized the need for more detailed plans for the National Growth Fund and the trade response program. Regarding the National Growth Fund, he stated, "The budget proposal was submitted without a concrete business plan, and unlike at the time of its drafting, the fund's target size and some details have since changed." For example, after the budget proposal was prepared, the target fund size was increased from 100 trillion won to 150 trillion won, which means the amount of subordinated government funding should also be adjusted. He also argued that plans are needed to address issues found in previous public participation policy funds. In the case of the National Participation New Deal Fund, launched in 2021, while it provided the public with opportunities to invest in policy funds, it faced criticism for low returns and controversy over fairness, as the government effectively guaranteed the principal with public finances. In fact, among the ten public offering funds that matured and were liquidated, seven delivered returns of less than 5 percent. Jung pointed out that since the performance bonus threshold for policy funds is set at 7 to 8 percent, a 5 percent return cannot be considered a strong performance.

The support for the trade response program involves capital injection into the Korea Development Bank to secure investment resources for newly established funds such as the Shipbuilding Cooperation Fund, which is being set up in response to Korea-U.S. tariff negotiations. Jung noted that the plans for the Shipbuilding Cooperation Fund lack specificity, making meaningful discussion difficult. He also stated that while the Financial Services Commission and the Korea Development Bank requested a 630 billion won budget for this project, they did not provide a clear basis for this calculation. However, he suggested, "Given the necessity of the project, the budget should be included, but the Ministry of Economy and Finance should designate this as a project with flexible allocation, allowing budget disbursement to be deferred depending on the details."

Regarding the Youth Future Savings Program, Jung stressed that the projected demand for new accounts is likely overestimated and should be adjusted to a more appropriate level. This program allows young people to open savings accounts at banks, with the government matching contributions in proportion to the amount deposited by the account holder. A similar program, the Youth Leap Account, was previously launched under the Yoon Suk Yeol administration, with differences in maturity, monthly deposit limits, and government contributions compared to the Youth Future Savings Program. Jung noted, "It is estimated that the cumulative number of Youth Leap Account subscribers will reach around 2.7 million by the end of this year," and argued, "Given that the overall target demographic is similar, projecting 4.83 million new subscribers to the Youth Future Savings Program in the second half of next year is excessive." He also called for the prompt development of detailed plans, such as linking the two programs for seamless enrollment. As for the Sunshine Loan, which provides loans to low-income and low-credit individuals, he pointed out that as the product system is being restructured and the range of participating institutions is expanding to all financial sectors, there is a need to prepare for these changes.

Jung also addressed the crisis response special guarantee subrogation program, which supports companies facing liquidity shortages due to tariff damages. He said, "The budget was prepared on the assumption that the entire planned amount of 3 trillion won would be supplied this year, but based on the monthly supply status, it appears unlikely to reach that target." He added, "Since the actual supply is expected to be around 1.5 trillion won, a partial budget reduction is necessary."

This content was produced with the assistance of AI translation services.