July 15, 2020 06:00

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Reduce recurrent expenditure: despite positive results, pressure is not over

09:40 | 06/11/2019

VCN- In recent years, in addition to actively implementing measures to increase revenues and combat losses of state budget revenues, the Finance sector has worked to reduce recurrent expenditures. So far, it can be said that the target of reducing recurrent expenditure for the whole period of 2016-2020 has been successfully met.

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Strict management of state budget spending.

Reduce by over 7% in 5 years

According to the latest report by the Ministry of Finance, in the first nine months of 2019, total state budget expenditure reached 63.1% of the estimate, of which regular spending reached 73.4%. Thus, in 2019, the total expenditure as well as recurrent expenditure will reach the estimates. Regarding the 2020 budget estimates, the Government made a regular expenditure estimate of VND1,056.5 trillion, accounting for 60.5% of the total state budget expenditure. With this goal, recurrent expenditure has decreased over the years.

At the 8th session of the 14th National Assembly, Minister of Finance Dinh Tien Dung said that the process of restructuring state budget spending has been implemented effectively and practically, including a reduction in recurrent spending. Looking back at the whole period, the proportion of recurrent expenditure estimates (excluding spending on salary reform) has decreased over the years. Specifically,the proportion of recurrent expenditure in the total budget expenditure was 63.3% in 2016, 64.9% in 2017, 61.8% in 2018, 61.2% in 2019 and 60.5% in 2020. On average, in the whole period, the proportion of recurrent expenditure in the total budget expenditure was less than 64%, reaching the target of the five-year financial plan (2016-2020) approved by the National Assembly. Therefore, recurrent expenditure has been gradually reduced compared to the proportion of 67.7% in 2015.

One of the praiseworthy points is that although the recurrent expenditure decreased, it still ensures that the source of salary reforms increases by 7% per year in accordance with the National Assembly's Resolution and other urgent national defense-security tasks and social security policies. In order to gain these achievements, in the period of 2016-2020, the annual state budget estimate submitted to the National Assembly closely followed the objectives of restructuring the expendituresunder Decree Resolution 07-NQ/TW of the Politburo and the Resolution 25/2016/QH14 of the National Assembly.

Accordingly, the budget expenditure structure has made very positive and basic changes in exceeding the targets of the 5-year plan for the period 2016-2020. The recurrent expenditure estimates for ministries, central agencies and localities has been built on the basis of the need to reorganize the organizational structure, reduce the payroll and promote autonomy of non-business units. Thereby, restructuring resources to prioritize wage reform and social security policies.

Can be reduced sharply

Regarding the Government's efforts to reduce expenditures, implement thrifty practices and prevention of waste, Chairman of the National Assembly's Finance-Budget Committee Nguyen Duc Hai said that the problems in recurrent expenditure have not been completely handled. For example, in some localities, the proportion of recurrent expenditure tended to decrease slowly. There are still many localities that are unable to balance their budgets, especially where there are difficult state budget revenues and low revenue sources.Meanwhile,recurrent expenditure is still high and resources for development investment are limited.

According to Mr. Hai, there is still a situation of procurement and use of public properties that is not in accordance with the provisions of law; many festivals, conferences, anniversary of the founding, re-establishment, groundbreaking and inauguration ceremonies are formal, causing budget waste. This shows that the rate of recurrent expenditures is able to be further reduced.

Economist Ngo Tri Long said that restructuring the state budget is a completely necessary and urgent policy.The Government has made great efforts to reduce unnecessary recurrent expenditures andstaff numbers, in order to restructure resources to implement social security policies, ensuring the minimum living standards for officials and public employees. However, besides promoting the task of streamlining the system, cutting unnecessary and wasteful spending, the reduction ofrecurrent expenditureis difficult. For example, in the total expenditure, the majority (over 70%) is still spent on people,and in some areas, such as education and training, this rate is much higher. In addition, some spending areas must ensure the ratio of expenditure to total state budget expenditure under the regulations of the Central Government and the National Assembly, such as spending on education, training, science, technology, environment and health; spending on maintenance of economic infrastructures such as roads, railwayshave put "pressure" on streamlining the apparatus and tightening unnecessary expenses.

Mr. Vo Thanh Hung, Director of the State Budget Department, Ministry of Finance said recently, the National Assembly has promulgated the State Budget Law, the State Audit Law, the Inspection Law, and the Law on Thrift Practice and Wastefulness Prevention, which clearly defines the responsibilities of all branches, levels and units in budget management. The thrifty practice and wastefulness prevention activities, including in the state budget field, have achieved positive results. However, in the field of state budget spending, someare still disregarded.

In order to overcome this situation, in the nearfuture, the Ministry of Finance will continue to propose stronger measures such as reviewing, amending and supplementing the regime of budget spending norms; strictly controllingstate budget spending, ensuring that it will only be spent when there is an estimate approved by the competent authority; strengthening the work of inspection and auditing; strictly handling violations of financial and budget management and State asset management and fully recoveringthe expenditures which are not in accordance with the regimes, standards and spending norms into the state budget. Besides, it is necessary to performpropaganda, publicity and transparency of financial and state budgetactivities; strengthen the inspection and supervision of National Assembly deputies and People's Councils at all levels.

Pham Minh Chinh, Head of Central Organization Department:

With total budget expenditure of over VND1 quadrillion, just 1% of reduction, we also have an additional VND10,000 billion to spend on development investment. We cannot maintain the bulky apparatus as it is today. In 2017, recurrent expenditure accounted for 64% of total budget expenditure. The reduction of recurrent expenditure will increase spending on development investment. This is effective and essential in the context of our limited budget.

By Hong Van/ KieuOanh