Caixin
Apr 03, 2019 08:04 PM
ECONOMY

Central Government Departments Heed Call to Tighten Their Belts

Beijing has urged governments to cut their budgets after promising massive tax and fee cuts.  Photo: VCG
Beijing has urged governments to cut their budgets after promising massive tax and fee cuts. Photo: VCG

Multiple central government departments have decided to cut their general spending budgets this year as Beijing pushes for governments at all levels to tighten their belts.

Of the 102 central government departments that released their 2019 budgets on Tuesday, nearly half, or 46, reduced their general public spending budgets from what they actually spent last year, according to Caixin’s calculation based on official data (link in Chinese). However, 49 departments increased their budgets compared with last year’s actual spending. Seven departments did not provide such figures.

The budget reductions by some departments came after Beijing promised to cut taxes and fees this year by nearly 2 trillion yuan ($297.8 billion) in order to lighten the burden on businesses struggling amid the economic slowdown.

The Ministry of Education, for example, has cut its budgets for both training and subsidies for certain companies by 10%. The Ministry of Ecology and Environment has reduced its total budget by 7% and plans to spend less on construction projects and major science and technology projects than it did last year.

In contrast, the Ministry of Veteran Affairs increased its general budget by 58% as it plans to spend more on administrative affairs and new staff.

This year’s government work report specifically instructed governments at all levels to reduce their spending on official overseas trips, vehicles and hospitality by about 3% from the previous year. A majority of the 102 departments have adhered to the guidelines. The Ministry of Emergency Management, the National Radio and Television Administration and the Ministry of Natural Resources, for example, cut their budgets for these expenditures by 57%, 35% and 14%, respectively, according to official data.

 Read more 
A special report on how local governments are hunting high and low for money to balance Beijing’s competing policy goals of bolstering economic growth while keeping their debts in check

In addition to budget cuts, Beijing is also seeking larger dividends from centrally administered financial institutions to offset the losses from the tax and fee cuts.

Contact reporter Timmy Shen (hongmingshen@caixin.com)

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