Fiscal revenue surges in first six months
Cary Huang in Beijing
Finance Ministry says growth in receipts from taxes and duties up 30.6pc to June
The mainland's fiscal revenue grew 30.6 per cent year on year to 2.6 trillion yuan in the first half of the year, more than double the budget target, raising questions about the government's fiscal policy.
Ministry of Finance statistics released yesterday revealed that first-half fiscal revenue accounted for 59.3 per cent of this year's budget target, putting the economy on the track to break last year's record high of nearly 4 trillion yuan. The first half-year figure was about the same as full-year revenue only three years ago.
Central government revenue in the first half of the year was 1.45 trillion yuan, up 32.6 per cent year on year, while local government revenue totalled 1.16 trillion yuan, up 28.1 per cent, Xinhua reported.
Fiscal expenditure stood at 1.79 trillion yuan in the first six months, up 22.7 per cent year on year and amounting to 38.5 per cent of the year's national budget.
In its budget report submitted to the annual session of the National People's Congress in March, the government projected fiscal revenue for this year would total 4.406 trillion yuan, up 13.8 per cent from last year.
It has budgeted expenditures of 4.65 trillion yuan this year, an increase of 15.7 per cent over what was spent last year.
Growth in fiscal revenue has outpaced economic growth in recent years. Fiscal revenue jumped 24.3 per cent to a record 3.93 trillion yuan last year on the back of 10.7 per cent growth in the national economy.
There were loud voices at the last NPC session questioning the nation's soaring fiscal revenue. The government was urged to spend more of its income to help support people in need and promote education, medical care, environmental protection and development of rural areas.
'The jump in fiscal revenue raises at least two questions that the government should answer. One is about the justification for the revenue rise and the other is about how to spend it to promote social justice,' said Ma Guoxian , director of the Public Policy Centre at Shanghai Finance and Economics University. Professor Ma attributed the soaring fiscal revenue largely to speculation in the property and stock markets.
But Xinhua cited Finance Minister Jin Renqing as saying it was partly a result of rapid increases in income taxes and import duties on the back of rapid economic growth. The economy grew 11.9 per cent year on year in the second quarter of the year, an 11-year high.
Professor Ma said the government should use the extra revenue to fund education, medical care and social security to help the poor. He said social problems would top the agenda at this autumn's 17th Communist Party Congress, which will set policy directions for the next five years.
Beijing is giving more priority to spending on education, health care and other social programmes that have been neglected during the two-decade economic boom.
But many critics say the government has not done enough, pointing out that education spending is still less than 3 per cent of GDP, below a 4 per cent target set in 1993.