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State Council issues statement on budget efficiency

Updated: Jun 19,2015 9:27 PM

The State Council issued a statement on June 19 to its ministries and provincial authorities to improve budget efficiency. The measures include:

1. Improve budget efficiency for government projects by speeding up review of the projects’ budget applications. Make sure that once the applications are approved, the projects can start spend according to those budgets.

Set up a system to monitor the progress of the projects. For those longer than a year, the government should grant budgets on an annual basis. For those that progress slowly, financial departments can redirect some of the funding to address public issues that need money badly.

2. Integrate different funds to use them more efficiently. The authorities should sort out various funds in the fields of science and technology, education, agriculture, energy efficiency, environmental protection and healthcare. For example, the various funds for science development managed by different ministries and departments should be integrated into five national science funds; funds for energy efficiency and environmental protection should be integrated into six categories, such as separate funds for air and water pollution treatment.The authorities should invest more of the increased section of education budgets into remote and impoverished areas or areas where ethnic groups live to improve educational equity.

3. Have financial departments distribute budgets for all other departments at their level. Financial departments budgets also should include special funds granted by the central government for infrastructure construction or science development. Financial departments can reduce or cancel the budget for government projects already supported by special funds.

4. Continue to include government funds, that is, funds that authorities collect by charging fees for addressing special public purposes, into general public budgets, which are mainly funded by taxes.

5. Better coordinate budgets that last for more than a fiscal year. Surplus in the general public budget should be directed to the budget stabilization fund. If the amount of money collected exceeds what the budget calls for, the extra funds should be used to balance deficit, pay for government debts or go to the budget stabilization fund. If the authorities haven’t collected enough money to fund planned budgets, they should narrow the gap by ways such as tapping into the budget stabilization fund or cutting spending.

6. Regulate the use of various kinds of government income. The authorities should review and regulate government funds and other special funds, and gradually set up a government income system that mainly includes taxes, with non-tax income as a supplement.

7. Carry out the State Council’s decisions to make full use of budget stabilizing funds and revolving funds, as well as money left over from budgets that haven’t been fully implemented.

8. Coordinate budget planning with budget implementation. Authorities should not only make budgets scientifically and precisely, but also implement them strictly and efficiently.

9. Make better use of borrowed funds. Funds that local authorities have borrowed but haven’t used should be included in their budgets and managed accordingly.

10. Make better use of transfer payments. For issues that fall under the authority of the central government, the central government should try its best to pay for them. For issues that fall under the powers of local authorities, local authorities should pay for them, while the central government lends support by making transfer payments.