Arrange apparatus and promote autonomy to reduce recurrent expenditure 

Continue to improve the budgetary discipline at all levels. Photo: T.L

There still have fiscal space

In recent times, the strict management of budget spending and saving recurrent expenditure has been implemented by the Ministry of Finance. In 2019, the ministry cut VND 10,000 billion of the estimated recurrent expenditures compared to the estimate of 2018 through streamlining staff and apparatus and enhancing autonomy for public service delivery units according to Resolution No. 19-NQ/TW and Resolution 19-NQ/TW. In meetings, the Minister of Finance said that over the past five years, the ministry has cut VND 27-28 million from recurrent expenditures for salary increases and social security.

The development of recurrent expenditure estimates for ministries, central and local agencies is based on requirement on the organisational restructuring, streamlining staff and promoting autonomy for public service delivery units. Thereby, it restructures revenues to prioritise wage reform and social security policies.

In the report on the implementation of the State budget 2019, the Finance and Budget Committee of the National Assembly stated that the Government has made efforts to cut recurrent spending and focused on thrift and fighting wastefulness. Notably, the Government and the Ministry of Finance have operated financial and budget policies effectively. Although the recurrent expenditure gradually reduces, it still ensures salary reform (an increase of 7% per year) and other urgent national defence and security tasks and social security policies.

In the report on the implementation of the State budget estimate in 2020, the State Audit Office said the recurrent expenditure in 2020 is estimated at VND 1,056.5 trillion, accounting for 60.5 % of the total State budget expenditure. The State Audit Office agreed with the Government's estimates. However, the office proposed the Government consider the roadmap to increase tuition fees as prescribed in Decree 86/2015/ND-CP; the level of actual autonomy of public service delivery units or salary fund; salary deductions structured medical service price to cut recurrent expenditure. The State Audit Office proposed the Government issue sufficient mechanisms and policies on financial autonomy for public service delivery units to continue to cut recurrent expenditure.

Policies on increasing spending only issued when it is necessary

In the circular guiding the implementation of State budget estimate in 2020, the Ministry of Finance proposed ministries, sectors and localities regularly inspect the compliance with mechanisms and policies in subordinate units. At the same time, ministries, sectors and localities should closely control State budget expenditures according to the estimate; minimise the advance estimate, and the advances must comply with provisions of the State Budget Law. The Ministry of Finance has requested units save recurrent expenditures, combat wastefulness and reduce funds for organising conferences, seminars, and festivals, foreign researching and surveys and allocate funds for the procurement of equipment strictly and in accordance with regulations; not to allocate spending estimates for unreleased policies; only issue policies to increase State budget spending when it is really needed and has guaranteed source.

Particularly, to ensure expenditure for human and social security, the Ministry of Finance wants ministries, sectors and localities to arrange recurrent expenditures, priority keys tasks and additional tasks in 2020, ensuring funds for implementing social security policies and adjusting wages, preventing salary debt of cadres, civil servants and public employees and expenditures for humans and polices. If detecting levels and units using State budget do not comply with policies and regimes on payment, especially related to expenditure for social security, poverty reduction, there needs to be measures to handle promptly.

Regarding this issue, Dr. Ha Huy Tuan - Vice Chairman of the National Financial Supervisory Commission said budget spending must be more effective, not only in investment but also in recurrent spending, because there still must be fiscal space for more effective reform and more streamlining. In addition, it is necessary to strengthen supervision of revenues and expenditure, as well as closely controlling the lending and use of capital from off-budget funds; improving the efficiency of loan use. At the same time, strengthen inspection and supervision of loans for re-lending.

Tran Quang Chieu - Standing Member, Finance - Budget Committee of the National Assembly said one of the most basic solutions to restructure the State budget, reduce the proportion of recurrent spending is streamlining staff, reorganising and cutting the apparatus. In the near future, the whole political system must continue to streamline its apparatus, accelerate innovation and assign autonomy to public service delivery units in the spirit of central resolutions. Therefore, it has sharply reduced recurrent spending, thus having sources to increase spending on development investment and other priority targets.