South Korea plans to use its new Future Response Fund to finance growth projects over three to four years rather than recurring welfare spending, a presidential official said on Aug. 26. Funded by record tax windfalls linked to the semiconductor boom, it is intended to support long-term growth while helping stabilize public finances when tax revenue fluctuates. President Lee Jae Myung’s government has promoted the fund as a way to invest AI-driven chip revenue amid population decline, a shrinking workforce and weaker growth prospects. The government has not disclosed its size, though local media estimates exceed 100 trillion won ($72 billion). The official rejected concerns that it could become an off-budget slush fund, saying spending would follow budget procedures and remain under parliamentary oversight. The proposed structure would allow the government to adjust about 20% to 30% of allocations within legal limits, including to respond to changes in GPU (graphics processing unit) costs without supplementary budgets. The fund would have four components: youth investment; growth engines including semiconductor clusters and future technology; regional development; and education and talent development. The government expects Samsung Electronics and SK Hynix to support solid tax revenue over the next two years, but the official said there was no guarantee beyond that period.