Full Text: Report on China's central, local budgets
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E-mail China.org.cn, March 14, 2012
Contents
I. IMPLEMENTATION OF CENTRAL AND LOCAL BUDGETS FOR 2011
II. DRAFT CENTRAL AND LOCAL BUDGETS FOR 2012
III. ADHERING TO LAW-BASED PUBLIC FINANCE MANAGEMENT
AND MAKING MANAGEMENT MORE SCIENTIFIC
TO ENSURE SUCCESSFUL IMPLEMENTATION OF 2012 BUDGETS
1. Strengthening and Improving Macro-control Through Fiscal Policy
We will closely follow developments and changes in the economic situation, oversee and inspect implementation of a proactive fiscal policy, and strike a balance between maintaining steady and robust economic development, restructuring the economy, and managing inflation expectations. We need to maintain continuity and stability in our fiscal policy, make macro-control using fiscal policy more targeted, flexible, and forward-looking, and stress fiscal sustainability. We need to give full play to the role of fiscal policy in our efforts to promote economic restructuring; boost consumer spending; support scientific and technological innovation, energy conservation, and environmental protection; develop strategic emerging industries and the modern service industry; promote coordination among regions and balanced urban and rural development; and make economic development more sustainable and cost-effective. We will make good use of the role fiscal policy plays in stabilizing prices. We will strive to ensure that grain output remains stable and even grows, and increase the supply of major agricultural and subsidiary products. We will strengthen the reserve and release of important commodities and materials, and support imports of daily necessities and important raw materials. We will develop a modern system for distributing agricultural products, reduce the tax burden on logistics companies and those who produce and distribute farm products, improve the road tolling policy, and effectively lower distribution costs. We will improve the mechanism to link social aid and social security benefits with price rises, and implement subsidy policies targeted at urban and rural subsistence allowance recipients, childless and infirm rural residents who receive the five forms of government support, and junior college and secondary specialized school students from poor families.
2. Deepening Reform of Fiscal and Tax Systems
We will improve the system of transfer payments by further raising the scale and proportion of general transfer payments, eliminating and consolidating some special transfer payments, and using transfer payments more effectively. We will improve fiscal management systems at and below the provincial level, refine the mechanism for ensuring basic funding for county-level governments, further balance the distribution of financial resources at and below the provincial level, and increase the ability of county-level governments to deliver basic public services. We will deepen reform of the budget management system, improve public finance budgets, make budgets for government-managed funds more standardized and transparent, expand the coverage of state capital operations budgets and gradually increase expenditure appropriations from them for social security and other areas related to people's lives, and improve the budgeting system for social insurance funds. We will extend the reform of preparing departmental budgets to the county level, and introduce the system for the Treasury's centralized revenue collection and expenditure payments at all levels of governments and their subsidiary agencies that prepare their own budgets. We will push ahead with the government accounting reform, and phase in a system for reporting government financial affairs. We will act more quickly to create an effective performance-based budget management system. We will improve the VAT system, and continue the experiments on replacing business tax with VAT. We will refine the excise tax system to encourage energy conservation, emissions reductions, and rational consumption. We will continue to reform resource taxes to promote resource conservation and environmental protection. We will study and design a plan for reforming taxes on owning and selling homes, and steadily advance pilot reforms of the property tax. We will reform the urban construction and maintenance tax and deepen reform of environmental protection taxes and fees. We will continue to review and consolidate administrative charges and government-managed funds in accordance with the principle of rectifying taxes and eliminating fees.
3. Making Public Finance Management More Scientific and Meticulous
We need to strengthen the legal framework for managing public finances, do a good job of revising the Budget Law and Law on Certified Public Accountants, and continue legislative work concerning a law on the environmental protection tax, an asset valuation law, regulations on state capital operations budgets, and other laws and administrative regulations. We will make our budgets more detailed, further reduce the size of expenditure budgets compiled by finance departments for relevant departments and projects, and make sure funds are available for more budgetary items at the beginning of the year. We will strengthen management of basic expenditure budgets, promote compilation of itemized rolling budgets, and improve the mechanism for evaluating key items before including them in the budget. We will tighten management over the implementation of budgetary expenditure, and make budgetary spending more timely, balanced, effective, and secure. We will strictly standardize the management over the use of surplus revenue. We will expand performance evaluation trials for budgetary expenditure, and all central government departments, provinces, cities, and counties should, in principle, carry out such trials. We will improve foundational work on fiscal management and its development at the primary level.
We will strengthen efforts to manage local government debts and prevent risks. In accordance with the principles of managing debts by type, taking different approaches to different situations, and clearing them in a step-by-step manner, we will continue to deal with existing debts prudently, and make clear who is responsible for repaying them. We will continue to straighten out and standardize financing corporations run by local governments, and resolutely prohibit governments at all levels from guaranteeing or promising the payment of debts in any form in violation of regulations. In addition, we need to combine short-term response measures with long-term institution building, and put in place a sound system for managing local government debts. We will strictly control new debts of local governments, set up a mechanism to control the scale of their debts and a mechanism to warn when they get too large, and gradually place debt-generated revenue and debt repayments under budgetary management on the basis of their type.
We will push forward efforts to make government budgets and final accounts more open and budgetary work more transparent. We will make more and detailed departmental budgets and final accounts available to the public. We will release to the public information regarding government agencies' spending on official overseas trips, official vehicles, and official hospitality as well as their administrative overheads, and make special expenditures of primary-level governments publicly accessible. We will exercise strict fiscal oversight, and intensify supervision and inspection of the implementation of major decisions of the central leadership and the use of funds for ensuring and improving living standards and for work related to agriculture, rural areas, and farmers in order to ensure that all policies are put into effect.
4. Striving to Increase Revenue and Reduce Expenditure
On the basis of implementing and refining structural tax cut policies, we will strengthen revenue collection and supervision in accordance with the law, resolutely stop and rectify unauthorized tax cuts and exemptions, crack down hard on tax evasion and fraud, and strive to ensure that all taxes due are collected. We will guarantee funding for key expenditure items; strictly control regular expenditures and spending on official overseas trips, official vehicles, and official hospitality; tightly regulate forums, symposiums, celebrations, and other activities as well as the construction of office buildings and other facilities for Party and government agencies; and work earnestly to lower administrative costs. We will encourage Party and government agencies to foster a conservation culture. We will practice thrift in everything we do, observe strict financial and economic discipline, economize wherever possible, and firmly oppose extravagance and waste.
Fellow Deputies,
It is vital that we successfully implement the 2012 budgets. Under the leadership of the Party Central Committee with Comrade Hu Jintao as General Secretary, we will hold high the great banner of socialism with Chinese characteristics, follow the guidance of Deng Xiaoping Theory and the important thought of Three Represents, thoroughly apply the Scientific Outlook on Development, willingly accept the oversight of the NPC, and listen to comments and suggestions from the CPPCC National Committee with an open mind. We will work diligently and break new ground to ensure complete implementation of the budgets, so we can make positive contributions to achieving all the targets for economic and social development in 2012 and welcome with proud achievements the coming Eighteenth National Congress of the CPC.
