South Korea’s Cabinet has approved a record 820.9 trillion-won ($606 billion) 2027 budget proposal, up 12.8% and the largest spending increase on record, reinvesting a semiconductor-driven revenue windfall while mounting an all-out housing and growth push. Finance minister nominee Lee Hyoung-il, named on Sunday, vowed on Wednesday to swiftly advance three mega projects to generate large-scale AI and technology investment and growth power, expand pre-emptive investments in advanced technologies, and use policy capacity from the global chip boom to support young people, small businesses and SMEs so they are not left out of growth. The government expects tax revenue to rise 40.7% next year, with corporate tax receipts more than doubling as chipmakers earn record profits, while budget documents project total revenue of 880.8 trillion won, up 205.6 trillion won or 30.4%, and national tax revenue of 584.4 trillion won, up 194.2 trillion won or 49.8%, making next year the first budget since fiscal 2019 in which revenue exceeds spending; 162.3 trillion won of added tax revenue goes into a future response fund with more than 104 trillion won held as reserve. National debt rises to 1,519.8 trillion won next year and is seen reaching 1,734.1 trillion won by 2030, while the managed fiscal deficit narrows from 107.8 trillion won to 3.1 trillion won next year before widening again to 100.8 trillion won by 2030. Programmatically, spending on three megaprojects and artificial intelligence jumps 97.2% to 21.3 trillion won, advanced strategic industries receive 41.4 trillion won anchored by government R&D of 39.5 trillion won ($28.4 billion), up 11.2%, defense is set at a record 73.3 trillion won, and housing reaches a record 44 trillion won targeting more than 1.1 million public rental homes by 2030. In parallel, the Financial Services Commission’s fiscal 2027 budget proposal earmarks another 1 trillion won of fiscal funding for the National Growth Fund—matching this year’s commitment—as seed capital within a 1.055 trillion-won allocation, while the fund’s five-year target is raised from 150 trillion won to more than 200 trillion won and annual operating capacity expands from 30 trillion won to 40 trillion won to crowd private money into AI, semiconductors and other advanced industries. As of end-August the fund had approved 31 projects totaling 17.9 trillion won, led by 5.7 trillion won for AI and semiconductors, though disbursements have trailed approvals as capital is released with project progress. Average annual spending growth is set at 8.4% through 2030, when total spending crosses 1,000 trillion won; analysts warn fiscal health could deteriorate again if the chip cycle turns or growth effects arrive late, and say the Growth Fund’s success will hinge on how effectively the 1 trillion won of fiscal seed capital leverages private investment away from real estate. The plan remains subject to National Assembly approval.