Clarify the scope of disclosure, strengthen local debt management, and improve the transfer payment system
Budget management reform to a higher level (policy interpretation)
The State Council recently announced the revised "Regulations for the Implementation of the Budget Law of the People's Republic of China" (hereinafter referred to as the "Regulations"), which will come into force on October 1, 2020. Recently, the heads of the Ministry of Justice and the Ministry of Finance answered reporters' questions on the revision of the "Regulations." The two departments stated that this revision of the Regulations mainly reflects the results of deepening the reform of the fiscal and taxation system. The State Council’s regulations on deepening the reform of the budget management system and other relevant regulations promulgated after the implementation of the Budget Law are legalized; at the same time, the relevant provisions of the Budget Law are refined and clarified. According to the practice in recent years, corresponding provisions have been made on the scope of budget revenue and expenditure, transfer payments, and local government debts.
Standardize budget preparation and budget disclosure
The "Regulations" clarify the preparation time of the budget draft, and stipulate the preparation content of the central and local general public budgets, government fund budgets, state-owned capital operating budgets, social insurance fund budgets, and budgets of various departments and units.
The "Regulations" mainly provide for departmental budget management from three aspects: One is to unify departmental budget management standards. In accordance with the requirements of full-caliber budget management, it is stipulated that the budgets of various departments should reflect all the budget funds allocated to the department and its affiliated units in the general public budget, government fund budget, and state-owned capital operation budget. The second is to clarify the scope of departmental budget revenue and expenditure. The third is to improve project expenditure management methods.
The "Regulations" detailed the disclosure of transfer payments, clarifying that government debt, agency operating expenses, government procurement, and financial account funds need to be disclosed to the public in accordance with regulations. At the same time, the disclosure of budgets and final accounts of departments and affiliates is detailed. According to the "Regulations", unit budgets and final accounts expenditures should be disclosed according to their functional classification; basic expenditures should be disclosed according to their economic nature.
The two departments stated that the "Regulations" made clear provisions on strengthening budget expenditure management, rationally arranging expenditure schedules, and accelerating the transfer of budget funds for transfer payments. At the same time, it stipulates that excessive collection, early collection, reduction, exemption, and exemption should be imposed on violations of laws and administrative regulations. If the budget revenue is deferred or refunded, it shall be ordered to make corrections. Preventing local governments from levying "excessive taxes" will help strengthen budget implementation management.
Standardize local government debt financing mechanisms
The Regulations refine and clarify the government debt management provisions of the Budget Law, require the establishment of a sound local government debt risk assessment index system, organize the assessment of local government debt risk conditions, provide early warnings for high debt risk areas, and supervise and resolve debt risks. For loans from foreign governments and international economic organizations, the State Council can on-lending to the governments of provinces, autonomous regions, and municipalities directly under the Central Government. Where the governments of provinces, autonomous regions, and municipalities directly under the Central Government have direct repayment responsibilities, they shall be included in the budget management at the corresponding level. The governments of provinces, autonomous regions, and municipalities directly under the Central Government can re-lending loans from foreign governments and international economic organizations that have been on-lending by the State Council to lower-level governments.
Minister of Finance Liu Kun said that the above regulations are conducive to establishing a standardized local government debt financing mechanism, strengthening local government debt management, strengthening supervision of all parties facing local government debt, effectively preventing and deflating debt risks, and promoting the sustained health of economic and social undertakings development of.
Promote the use of fiscal funds to improve quality and efficiency
Full implementation of budget performance management is an inherent requirement for advancing the modernization of the national governance system and governance capabilities, and is an important part of deepening the reform of the fiscal and taxation system and establishing a modern fiscal system. The “Regulations” follow the budget law’s principle that budgets at all levels should emphasize performance. Based on the budget law’s provisions on performance target management, expenditure performance evaluation results, and performance evaluation, the concept of performance evaluation is further clarified and the results of performance evaluation are specified as Improve management and the basis for preparing future annual budgets.
The "Regulations" make provisions for further strengthening performance management, further building a comprehensive budget performance management pattern, perfecting the budget performance management system, strengthening budget performance management supervision and restraint, helping to improve the efficiency of fund use, and promoting the further development of finance at all levels Focus on doing a good job of "six stability" and implement the task of "six guarantees".
The two departments stated that it is necessary to strictly implement the Budget Law and the "Regulations," and promptly promulgate relevant systems and measures. In accordance with the principle of “who formulates and cleans up”, timely revise and clean up budget management rules and regulations that are inconsistent with the "Regulations" to ensure compliance with laws and regulations.
Our reporter Qu Zhehan and Wei Zhezhe