Reform of 'Education Grant' blocked by previous governments, will Lee Jae-myung administration differ?

The debate surrounding the reform of South Korea's local education finance system has resurfaced, driven by the declining school-age population. This system automatically allocates 20.79% of domestic taxes to provincial education offices, a mechanism that has faced scrutiny for years.

Despite consistent recommendations for reform from institutions like the National Assembly Budget Office, the Korea Development Institute (KDI), and the Board of Audit and Inspection, previous administrations have been unable to enact changes. These efforts were repeatedly thwarted by resistance from the education sector.

However, the current administration, under President Lee Jae-myung, has identified the restructuring of mandatory spending as a key policy objective. This focus is expected to bring the long-standing issue of education funding reform back to the forefront for evaluation.

The Local Education Finance Grant system, established in 1972 to ensure stable funding for elementary and secondary education, allocates a portion of domestic taxes and education taxes to local education offices. Critics argue that the system's automatic increase, tied to domestic tax growth, is unsustainable given the shrinking student population, necessitating adjustments to reflect evolving educational needs and fiscal conditions.