Finance Minister Liu Zhongli yesterday accused government departments of causing national overspending with lax control over their budgets. Mr Liu told the Standing Committee of the National People's Congress the central Government had overspent 7.81 billion yuan (HK$7.25 billion) last year, pushing total expenditure up to 487.38 billion yuan. Despite repeated warnings that departments should tighten spending and cut staffing levels, central budget expenditure was 7.6 per cent higher than last year. Mr Liu said: 'The failure of departments to discipline their spending is a problem. Measures will be introduced to reform the expenditure system.' Despite a rise in revenues, budget deficit and debt ratio remained hugh, Mr Liu warned. Revenues rose 10.3 per cent last year, 8.37 billion yuan more than in the planned budget. Mr Liu predicted the national deficit would reach 60.8 billion yuan this year, 558 million yuan less than in the planned budget. Mr Liu said: 'Delinquent taxes are still serious. It is still common to have local officials granting tax exemption illegally. Tax evasion and tax deception are common.' He vowed that severe action would be taken to combat these problems. Mr Liu said that increased revenue would be spent on poor areas in the central-western region, to subside money-losing state grain organisations and to pay for disaster relief works. Guo Zhenqian, Auditor-General of the Auditing Administration, said five immediate measures would be introduced to strengthen central budget control. 'More specific guidelines will be given to separate the items of central and local taxation. Central taxation will not be allowed to be diverted to local treasury,' Mr Guo said. He emphasised that more effort would be made to collect delinquent taxes and to plug loopholes in collection. He added that abuses of extra-budgetary funds would be dealt with seriously. 'Audit supervision on the unemployed insurance fund, pensions for state enterprise labour, land using-right transferring charges as well as special development project funds will be strengthened,' Mr Guo said. The administration would carefully monitor how funds allocated to local projects were used. 'Bank accounts of departments included in the budget will be checked regularly,' said Mr Guo.