The national economy and people's livelihood, the size of the books, the New Year has a new arrangement.

In the first year of the 14th Five-Year Plan, it is crucial that we give full play to the role of public finance and make a good start on the new journey.

In 2021, how can the active fiscal policy be redeployed? What are the new arrangements for reducing taxes and fees and direct funds? How to make efforts to ensure people's wellbeing? Reporters recently interviewed Minister of Finance Liu Kun.

Proactive fiscal policy will improve the quality and efficiency and make it more sustainable

According to the Central Economic Work Conference, a proactive fiscal policy should be more sustainable and more efficient. How to understand? How to implement it?

Liu Kun said that to "improve the quality and efficiency" of fiscal policies, we should focus on optimizing the structure and strengthening management, further improve the policy implementation mechanism, tap the potential from inside, and effectively improve the efficiency of policies and funds.

"On the one hand, we will establish and implement a regular direct mechanism for fiscal funds to improve the efficiency of fiscal spending. On the other hand, it pays more attention to saving and improving people's lives, and gives more prominence to performance orientation." In the New Year, Liu Kun said, the government will tighten its belt and let the people live a better life.

"More sustainable," he said, is to keep spending scale and policy intensity basically stable, leaving policy space to deal with new risks and challenges in the future. We will set an appropriate deficit ratio and the amount of special bonds issued by local governments, maintain appropriate spending intensity, and keep the macro leverage ratio basically stable.

Due to the outbreak, some community-level cities and counties are under increased pressure to ensure basic livelihood, wages and operations. In 2020, the financial authorities have introduced a number of strong measures to ensure the safety, security, and health of the people at the primary level. How will they do more this year?

"This year's budget will, as always, strengthen financial support for local governments." The central government will prioritize spending on the "three guarantees," Liu said, while provincial financial departments will strengthen checks on the budgets of cities and counties. At the same time, we will strengthen monitoring of the implementation of the "Three Guarantees, Three Guarantees, and Three Guarantees", keep abream of the implementation at the local level, and prohibit the appropriation of such expenditures.

"Local governments should also take a bottom-line approach to ensure the sound and sustainable operation of community-level finance." Liu said.

We will resolutely cut all the taxes and fees that need to be cut

In recent years, China has implemented policies to cut taxes and fees on a large scale, helping market players to travel light. How strong is the effort?

"In 2020, when government revenue and expenditure are relatively difficult, we issued and implemented seven batches of 28 policies to cut taxes and fees, with the total amount expected to exceed 2.5 trillion yuan for the whole year." The total amount of tax and fee cuts during the 13th Five-Year Plan period will reach about 7.6 trillion yuan, Liu said.

The Central Economic Work Conference proposed to improve policies for reducing taxes and fees. How will 2021 proceed?

Liu Kun said that the Ministry of Finance will overcome the immediate revenue and expenditure pressure, and resolutely cut the tax cuts and fees to the full extent. We will strive to improve related policies while maintaining certain reductions in taxes and fees.

"On the one hand, keep pushing." 'Taking into account our fiscal capacity and the need to implement policies to help enterprises, we will continue to cut taxes and fees to a certain extent,' Mr. Liu said. 'We will continue to implement institutional policies to cut taxes and fees to help enterprises and give them a lift.'

On the other hand, we will tighten oversight. We will strictly control the unreasonable growth of non-tax revenue, intensify efforts to crack down on all kinds of illegal charges and fees levied on enterprises, and resolutely prevent the weakening of tax and fee reduction policies, such as dividends.

"Many of the tax and fee cuts we have implemented in recent years are not one-off or temporary, but institutional and sustainable. Over the years, the cumulative effect will be greater and the burden on enterprises will be reduced more and more significantly." Liu said.

The scope of direct funds has been expanded and institutionalized

The creative establishment of a direct mechanism for government funds is an important measure to ensure solid progress in ensuring the stability of the six measures and the implementation of the tasks of ensuring the six, and is also a major innovation in the way of fiscal macro-control. How effective is the policy?

"The budget for direct fiscal funds for 2020 has been completed. By December 29, 1.52 trillion yuan had been put into use, and the results have been obvious." Liu said.

He said that with the joint efforts of all local departments, more than 90 percent of the central government's direct funds were transferred to the city and county level in only 20 days, while the provincial level's financial details were transferred in an average of only one week. The "precision drip irrigation" of funds ensures that every penny is used for the urgent needs of the grassroots and for the benefit of enterprises and people.

How will this effective mechanism continue to work?

"In 2021, the Ministry of Finance will earnestly review the experience and practices in improving the mechanism for direct financing of government funds, form a regular and institutionalized arrangement, and promote strict management, active use and accurate use of funds." Liu said.

"The total amount of direct funds this year will be increased compared with last year, and the scope will be expanded." General transfer payments that are directly used to ensure financial support at the community level, transfer payments from the central government to local governments that can be distributed at the beginning of the year, and special transfer payments that meet conditions will be included in the direct program, Liu said.

At the same time, he said, strengthen the business guidance and supervision responsibilities of industry departments, strengthen financial supervision and audit supervision; Accelerate the upgrading of the direct fund monitoring system, and promote the open sharing of data; Promote direct mechanism embedded in the budget management process.

We will meet the basic standards of living

The state finances are derived from and used by the people. What new arrangements will the finance department make to improve people's wellbeing?

"No matter how big the pressure on government revenues and expenditures becomes, we will resolutely ensure spending on improving people's livelihood." In 2021, the Ministry of Finance will continue to do what it can to meet the basic living standards and ensure that the people have a better sense of fulfillment, a more sustainable sense of happiness and a better sense of security, Liu said.

We will implement the policy of giving top priority to employment and make good use of employment subsidies and other funds. Promote the development of high-quality education, increase financial investment in education; We will steadily raise the level of social security and promote national pooling of basic old-age insurance for enterprise employees. We will improve the management of social security funds nationwide and deepen reform of the investment, operation and management systems and mechanisms. Promote the building of a healthy China; We will support the development of the cultural industry... Liu Kun introduced the focus of this year's finance to ensure people's livelihood.

"While strengthening the basic security of people's livelihood, we will pay more attention to the effectiveness and sustainability of policies and measures for people's livelihood." 'We will ensure that spending on people's livelihood is coordinated with economic development and matched with the financial situation,' he said. 'We will ensure that the dividends of people's livelihood are fully realized and that the security for people's livelihood will be extended into the future.'

Put a stranglehold on local government debt

In the face of the complex and grim domestic and international situation at present and for a period to come, how should we guard against major financial risks?

"We will balance development and security, adopt bottom-line thinking, fully assess difficulties and think more deeply about risks. We will plug loopholes and areas of strength and weakness, play the first game, and resolutely guard against systemic risks." Liu said.

On the one hand, we will safeguard China's economic security. We will increase fiscal and tax policy support to address weak links and weak links that affect economic security, and ensure that key industries, science and technology, and other key sectors are secure and controllable.

On the other hand, the financial security itself. "We will strike a balance between promoting development and preventing risks, appropriately arrange deficit, debt and spending policies, and effectively defuse the hidden debt risks of local governments." Liu said.

At present, the debt risk of local governments in China is generally controllable, but some regions are still increasing the hidden debt and some regions are increasing the debt repayment risk. Mr Liu said he would "pay close attention and be highly vigilant".

"Putting a straitjacket on local government debt will create a safety valve for economic and social development." He said the Ministry of Finance will take both "opening the front door" and "blocking the back door" measures to further improve management, strengthen oversight, promote the "transparency" of local government debt, and effectively cage debt risks.

Source: Ministry of Finance, PRC