South Korea Plans Future Response Fund to Back Youth and AI Investment

South Korea's Ministry of Economy and Finance announced on August 21, 2026 plans to establish a new fund, the "Future Response Fund," which would direct excess tax revenue generated by the semiconductor industry boom toward supporting the younger generation and investing in future growth industries such as artificial intelligence. The ministry said the fund would finance programs aimed at helping young people secure employment, purchase homes and start families, while also supporting investment in artificial intelligence, regional development and talent cultivation.

The fund would be financed primarily by government excess tax revenue — the portion above a baseline set at the average growth rate of domestic tax revenue over the past decade. During strong economic years, the fund would accumulate surplus tax receipts for use as a buffer in periods of economic weakness.

On the use of funds, youth programs would cover employment, housing, asset accumulation, and support for marriage and childbirth, while investment in growth industries would centre on artificial intelligence and other strategic technologies. The fund is also linked to an education financing reform plan that would direct more resources to talent development, higher education and lifelong learning.

The government plans to submit the related legislation to the National Assembly next month together with the 2027 budget proposal. Official data show South Korea's youth unemployment rate rose to 6.8% in July 2026. Against the backdrop of low birth rates, housing affordability problems and labour market challenges, the fund is intended to address these structural pressures through fiscal means.