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Budget Reform: Transparent Need?

Many members of the National People's Congress (NPC) Standing Committee voiced their criticism of the government's financial budgeting and accounting system during its session in June last year.

Budgetary planning currently remains incomplete, said Liu Hezhang, former deputy auditor general of the National Audit Office (CNAO) and member of the NPC's Civil and Judicial Affairs Committee.

He said that according to the Budget Law, the central government budget should comprise all statutory budgets. However, what are presented to the NPC are only the budgets of several of the 139 plus top-level departments.

Liu also said that the budget and financial reports submitted by the Ministry of Finance give an incomplete picture. Unbudgeted expenditure (unforeseen spending) and additional funds that are raised by local departments and spent as they see fit, are not included.

While there is good data for budgeted spending, and significant improvements made in accounting for unbudgeted expenditure, the same cannot be said for the additional funds.

Although there is no precise data for additional funds raised and spent, experts who have investigated the issue suggest their scale is likely to be similar to that of budgeted spending.

During last July's NPC Standing Committee session, many members complained that they could not understand the ministry's budget report.

The NPC Standing Committee member Wang Maolin said it should be more transparent and contain more substantial content and explanation.

He said, "I studied finance and economics, but still only understand the budget report with difficulty."

Liu Hezhang said that the idea of submitting budgets and financial reports to the NPC should not only be for financial management, but also for their considered evaluation and surveillance.

The latest Outlook Weekly agreed that there is great gap between current government budget and the real situation.

It also said the budget planning lacks transparency. Governments at all levels do not publish specific indicators. Only items involving large revenue and expenditure are released with dense explanatory text. This makes it hard for NPC deputies and the public to understand the budget and uncover any problems.

Without effective supervision and examination by the NPC, corruption and inefficiency is likely to go unnoticed as some departments and individuals take advantage of a lack of transparency and surveillance to pursue their own interests.

(China.org.cn by Yuan Fang, March 4, 2005)

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