A Call for a Transparent Budget that Everyone Can Understand

Cover, Issue 509
February 28, 2011
Translated by Tang Xiangyang
Original article: [Chinese]

Managing a national budget is similar to managing a household budget. The head of a household usually considers things like, what are the sources of income? How should the money be spent? How can we ensure a comfortable standard of living for all members of our family? They don't spend carelessly and often save for a rainy day.

This year's national budget will soon be approved by the National People's Congress (NPC), as a voice of public opinion, we would like to express our views on this year's budget.

We hope, first of all, that the fiscal budget will focus on the needs of ordinary people.

The lower and middle classes are feeling the pressure that comes with rising inflation. Last year, the government collected over 8.3 trillion yuan in fiscal revenue, up 21 percent from the level of previous year.

In lieu of this increase in revenue, it is the responsibility of the government to offer increased subsidies to low-income families in order to lift their standard of living.

Additionally, government investment and the budget deficit should both be reduced.

If we continue to invest too much of our fiscal revenue in the construction sector, it could lead to another surge in inflation.

Last year's fiscal revenue exceeded the official target by more than a trillion yuan, if we continue to run such large deficits, ordinary residents will be left to pick up the bill by paying even more in taxes.  

In the previous year, the "two sessions" focused on fiscal spending. But attention should also be paid to how the government collects fiscal revenue. Government revenue has been growing twice as fast as GDP in recent years, even with the financial crisis, fiscal revenue achieved a two-digit growth rate.

Both companies and ordinary people are feeling the strain.

While the government has been issuing tax cuts for several years, the amount of tax revenue has actually continued to increase. This means we must impose stricter supervision on how tax policies are implemented.

For example, despite years of debate, individual income tax reform and measures concerning changes to the value-added tax (VAT) have not yet been implemented.

However, a property tax, which is primarily aimed at increasing the revenue of local governments, has been piloted and will be spread across the country even though it has yet to be approved by the NPC. Moreover, we have not seen any progress in the stated aim of integrating all the other various taxes that are levied on the real estate sector.

These tax increases may be justified by the government's goal of increasing investment in social services, but the public has a right to expect that they will benefit from their tax contributions.

The state should heed calls for "small government" and provide more freedom for private enterprises to grow, prosper and create wealth. Wealth in the private sector will be more effective in creating a vibrant economy, especially when China is making a priority of encouraging domestic innovation.

We look forward to the Ministry of Finance unveiling an open, transparent and easy-to-understand budget.

The Chinese people want to be informed, but they have little access to information, let alone channels for discussing and expressing public opinion.

Delegates to the People's Congress bear the weighty responsibility of representing public opinion through their votes.

However, during previous "two sessions," when representatives expressed concern that the national budget was too professional, not detailed enough and difficult to understand, officials from the Ministry of Finance responded that "not everyone should understand the budget."

In our opinion, the fiscal budget is a way of managing money on behalf of the people and naturally it should be accountable to the people.

The Ministry of Finance has a responsibility to not only make the budget comprehensible to NPC and CPPCC members but also to ordinary citizens.

If the Ministry of Finance is unable to produce a budget that can be understood by everyone, then it's the ministry that is not doing its job properly. 

In recent years, the Ministry of Finance has been promoting transparency in regards to how government money is spent, this will likely lead to more revenue being invested in public services and more money being spent on meeting the needs of ordinary people.

If the Ministry of Finance doesn't open up various channels that allow it to communicate with the public more effectively and react to public opinion, it will be unable to reduce wasteful and ill-advised spending of the country's common wealth.

Over the past few years, reports published by the National Audit Office have repeatedly revealed such cases of inappropriate fiscal spending.

Hopes for a more transparent budget are not new.

In past years, many NPC and CPPCC delegates have not only called for the publication of a transparent fiscal budget but have also submitted various proposals for budget reform.

Many other organizations and individuals have persistently lobbied both the central and local levels of government to open up their budgets to the public.

Though progress has been made, it is widely believed that the steps that have been taken are not enough.

The 2011 plenary sessions of the NPC and the CPPCC are about to begin, we remind all the delegates to the People's Congress that their vote should represent the will of the people.

We expect all delegates to the "two sessions" to push for this reform.

Time waits for no one, the era of open and transparent budgets should start now.

This editorial was edited by Ruoji Tang and Paul Pennay