The Zhitong Finance App learned that South Korea's Ministry of Budget said on Friday that South Korea plans to set up a new fund to use tax revenue from the country's semiconductor boom to support the younger generation and invest in future growth industries such as artificial intelligence. According to the ministry's press release, the proposed “Future Response Fund (Future Response Fund)” will fund projects aimed at helping young people find jobs, buy homes, and start families, while also supporting investments in artificial intelligence, regional development, and talent development.
The fund is mainly funded by the portion of tax revenue that exceeds the benchmark, which is calculated based on the average growth rate of domestic tax revenue over the past decade. The agency said that in years when the economy is strong, this will accumulate excess taxes, which can later be used to ease fiscal pressure during periods of economic weakness.
With the booming development of artificial intelligence, demand for chips surged, and the earnings of South Korean chipmakers Samsung Electronics and SK Hynix also soared.
The South Korean government did not provide an official estimate of the size of the fund. According to South Korean media, according to the government's forecast of next year's tax revenue and expected inflows of funds from other sources, the size of the fund may exceed 100 trillion won (72.28 billion US dollars).
Under the plan, youth programs will support employment, housing, asset accumulation, marriage, and childbearing, while investments in growing industries will focus on artificial intelligence and other strategic technologies. According to government data, the youth unemployment rate rose to 6.8% in July, while Lee Jae-myung recently warned that the spread of artificial intelligence could further affect the employment prospects of young workers.
President Lee Jae-myung promised to create more opportunities for young people as South Korea faces low birth rates, housing affordability issues, and labor market challenges.
The fund is also related to education funding reforms, which will use more resources for talent development, higher education, and lifelong learning. The government plans to submit relevant legislation to Parliament next month along with the 2027 budget proposal.