The Lee Jae Myung administration’s proposed budget for next year exceeds 720 trillion won, or around 518 billion U.S. dollars, up by a four-year high of eight-point-one percent compared to this year.

The budget plan, which was approved by the Cabinet on Friday for review by the National Assembly, sets the total revenue at 674-point-two trillion won, up three-point-five percent after increases in state taxes and non-tax revenue.

The total expenditure has been set at 728 trillion won, up eight-point-one percent.

Finance Minister Koo Yun-cheol said state finances should prime the pump to facilitate economic recovery and growth, stressing that it will support a major transition to a leading economy.

The largest portion of 269 trillion won has been earmarked for areas of health, welfare and employment, while the budget for research and development jumped by the highest rate of 19-point-three percent.

The government's allocation is also focused on artificial intelligence (AI), with plans to directly inject ten-point-one trillion won, more than triple the amount this year, into AI initiatives to become one of the world's top three AI powerhouses.

A record high of over five trillion won has been added to the defense budget, bringing the total to 66-point-three trillion won, while 873-point-three trillion won will be spent on national universities outside the capital area to promote regional growth.

There was a considerable budget increase for the social safety net, including payment of living wages, President Lee Jae Myung's election pledge of a basic income for agricultural and fisheries communities, regional gift certificates and childcare benefits.

Despite an intensive restructuring of 27 trillion won in state expenditures, the budget increase is set to result in the government debt expanding by 141-point-eight trillion won to surpass one-point-four quadrillion won and for the GDP-to-debt ratio to jump to 51-point-six percent.