SEOUL — Prime Minister Kim Min-seok declared a "war on corruption" regarding the misuse of state subsidies on Tuesday, announcing a drastic overhaul of the current punitive system. The government plans to increase financial penalties to up to eight times the amount of the misappropriated funds, signaling a zero-tolerance approach toward those who exploit public finances.
The announcement came during a ministerial meeting on "Eradicating State Subsidy Misuse" held at the Government Complex Seoul. The session was convened following a direct order from President Lee Jae-myung to establish a foolproof prevention system to ensure fiscal integrity.
Strengthening Punitive Measures
The centerpiece of the new policy is a significant hike in "sanction surcharges." Under the proposed legislative amendments, the maximum penalty for fraudulent claims will rise from the current fivefold limit to eight times the amount of the illicit gain. This move aims to make the "economic cost" of fraud far outweigh any potential benefits.
To bolster public surveillance, the government is also revamping its whistleblower program. Reward money for reporting fraud will be increased to 30% of the recovered funds. Even for smaller cases, a flat minimum reward of 5 million won will be guaranteed to encourage civic participation in monitoring the budget.
Shift in Oversight Authority
The government is also centralizing the oversight process to ensure impartiality. Previously, individual ministries decided whether a case constituted fraud and determined the level of sanctions. Now, the Ministry of Planning and Budget (MPB) will take the lead.
The newly formed Subsidies Management Committee under the MPB will deliberate and vote on all major cases. Specifically, a sub-committee will directly review any fraudulent claims exceeding 10 million won to ensure strict and consistent enforcement across all sectors of the government.
Massive Nationwide Inspections
A "2026 General Inspection of Subsidy Misuse" is set to launch immediately, with a scale ten times larger than previous years.
Private Sector: Monitoring will expand to 6,500 projects.
Local Government: For the first time, 6,700 large-scale local government projects (valued at over 1 billion won each) will be scrutinized.
To execute this, a Special Task Force of 440 officials from the MPB and related ministries will conduct intensive on-site inspections for the next six months. Furthermore, the government aims to complete the integration of local and national subsidy systems into the "e-Nara-Doum" platform by 2029 for real-time tracking.
"We must pull out the roots of subsidy fraud by imposing economic disadvantages several times the amount stolen," Prime Minister Kim stated. "For habitual and malicious offenders, we will not hesitate to pursue criminal charges and ensure they face the full weight of the law.
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