The South Korean government announced on September 1, 2026, a plan to cut 69 trillion won in mandatory spending and 38.6 trillion won in discretionary spending for the 2027 budget. ^[1] The South Korean government finalized a budget of 820.9 trillion won for the next fiscal year, marking a 12.8% increase over the current year's budget. ^[2] The South Korean government announced a new 'low birth rate response package' in the 2027 budget plan to support families from marriage through child-rearing. ^[3] Under the new system effective from July 2027, the government will provide up to 75 million won for a third child, with higher amounts for children in designated rural areas. ^[4] Discretionary spending will be reduced by 38.6 trillion won, achieved by abolishing over 2,100 projects which account for more than 10% of all initiatives. ^[5] The government plans to allocate an additional 32.5 trillion won in tax revenue to a future response fund for talent development, adjusting the calculation of education transfer funds based on economic growth and school-age population changes. ^[6] The reduction in mandatory spending is attributed to a reform of the local education finance transfer system, which was last changed 55 years ago. ^[7] National debt is expected to exceed 1,519 trillion won next year, an increase of over 100 trillion won compared to the current year. ^[8] President Lee Jae-myung instructed the Vice Minister of Finance, Lee Hyung-il, to ensure a firm grip on inflation, warning that failure could result in the cancellation of his appointment as Finance Minister. ^[9] Total government revenue is projected to reach 880.8 trillion won, a 30.4% increase from the current year, driven by corporate and income tax hikes due to a semiconductor boom. ^[10] President Lee Jae-myung stated during a State Council meeting that the government is considering applying the new child support standards from January 1, 2027, to ensure fairness for children born in the same year. ^[11] The 2027 budget allocates 117 trillion won to address 'K-shaped polarization' by focusing on local-led growth and infrastructure development in five major metropolitan areas and three special autonomous provinces. ^[12]