SCIO briefing on administrative approval system reform
0 Comment(s)
Print
E-mail China.org.cn, September 10, 2014
Economic Daily:
The Plan for the State Council institutional reform and transformation of government functions explicitly proposes that we will cut the number of special transfer payments and greatly reduce and integrate special transfer payments from the central government to local governments. What measures has the Ministry of Finance taken to improve the special fiscal transfer-payment system? What specifically will be taken into consideration next?
Lai Yongtian:
At present, there are two kinds of transfer payments from the central government to local governments: general and special. According to requirements of the Party Central Committee and the State Council, the Ministry of Finance takes measures in the following three aspects to deepen reform of the transfer-payment system step by step and further improve the structure of transfer payments:
First, we will improve the general transfer payments growth mechanism. Specifically, we will ensure the increase of general transfer payments is higher than the increase of all transfer payments, establish mechanisms to link fiscal transfer payments to the number of rural people who have moved to cities and got registered as permanent urban residents, and promote equal access to basic public services. We will greatly increase transfer payments to old revolutionary base areas, ethnic minority areas, border areas, and poverty-stricken areas so as to promote coordinated regional development. We will establish mechanisms to incentivize local governments to invest general transfer payments in key fields, for example to improve people’s livelihood. Local fiscal gaps caused by the central authority's policy of increasing spending will be filled in principle by general transfer payments.
Second, we will strictly limit the number of projects funded by special transfer payments. Such newly-established projects must be approved by the State Council, and present special transfer payments will be tidied up and integrated. Since the second half of 2013, the central government has reduced the number of special transfer payments and delegated the power of reviewing and approving certain items to lower levels. While formulating the 2014 budgets, we cut the number of projects funded by special transfer payments from 220 in 2013 to about 150 this year, and hence achieved the aim set by the government work report, that is, reducing the number of special transfer payments by one third in 2014.
Third, we will strengthen budget management of transfer payments. We will intensify the link between central and local budget management, issue budgets for transfer payments in advance, and urge local governments to include them in the annual budget on time. We will advance information disclosure and take steps to disclose the results of the distribution to the public. We will carry out performance evaluation and put forward better integration of evaluation results and budgets. According to the Budget Law (Revised) passed by the NPC Standing Committee on Aug. 31, general transfer payments should be the focus, and special transfer payments should not be set up for those projects which can be effectively adjusted under the market competition mechanism. The higher-level government cannot require lower-level governments to take on special transfer payments, unless those projects should be undertaken by the higher and lower-level governments together according to the provisions of the State Council.
Next, the Ministry of Finance will further tidy up, integrate and regulate special transfer payments. Firstly, we will cancel those special funds which have do not need to be kept due to the expiration or adjustment of some policy, or poor performance; we will abolish those special funds which are small, scattered and disorderly, those with no obvious effect, and those in purely competitive fields. As for those special funds set up in competitive areas due to price reforms or macroeconomic regulations, we will make their execution deadlines clear and abolish them after the expiration date. Secondly, projects commissioned by the central government, if they can be carried out at the central level, will be financed at the central level in principle; projects concerning local affairs will be included in the category of general transfer payments. Thirdly, we will retain projects under the authority of both the central and local governments, a small number of central commissioned projects, as well as those for guiding, relief and emergency purposes. We will establish and improve the regular evaluation and withdrawal mechanism. Fourth, we will integrate projects which have similar aims, similar investment directions or manage funds by similar means. We'll also cap the number of special funds for each direction or field. Fifth, we will cancel supporting funds from local governments. Enough funds should be provided for projects commissioned by the central government and local governments will not necessarily offer supporting funds in principle. As for projects under the authority of both the central and local governments, we will make the standard or proportion for sharing funding clear. Thank you!
Go to Forum >>0 Comment(s)