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Opinion / Xin Zhiming

Preventing fiscal fund misuse

By Xin Zhiming (Chinadaily.com.cn) Updated: 2014-12-03 16:45

China is budgeted to spend about 4 trillion yuan ($653 billion) fiscal funds in the last two months of the year, which, without effective supervision, could lead to wasteful use of the taxpayers’ money.

In the first 10 months, governments at all levels spent about 74.2 percent, or 11.4 trillion yuan, of budgetary expenditures for this year. It means they will have to spend nearly 4 trillion yuan in two months; otherwise, money unspent will have to be returned to the central coffers and their budget will be cut accordingly next year.

To prevent their budgeted expenditures from shrinking, governments at varied levels have routinely spent money wastefully at the year-end, leading to squandering of taxpayer money.

Many have pointed their fingers at the “distorted” budgetary system, which requires that if a government fails to spend all the budgeted money, its budgeted expenditures would be cut next year, thus, critics say, forcing the government to spend money intensively in the last weeks of the year.

Those critics have missed the real target. If a government cannot spend the budgeted expenditure quota, it means it does not need that amount of money and it is absolutely reasonable to cut its budget for next year.

The problem does not lie in the budgetary system itself, although compilation of annual budgetary expenditures does need to improve to better reflect the real need of the government.

The real problem lies in lack of effective supervision from the public. If the public can have a bigger say in deciding how officials should spend the taxpayer money, then the public funds would be spent in a more thrifty way.

The problem of intensive government spending in the last months of the year has been going on for many years and the audit departments have found out many irregularities in regular audits, but there have not been many officials who were punished.

It means the officials have not been subjected to effective supervision of the public and they feel it not very risky to squander public money.

To prevent public funds from being misused, therefore, the public must be allowed to have a bigger say in public affairs, such as the making of the government budgets and the appointment and removal of officials.

Considering money as the end is the tragedy
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