Action plan to restructure the State budget and control public debts

	Tightening the discipline of financial management and State budget
	2018: Striving to mobilize capital for State budget of 21% of GDP
	Expenditures can not reduced without cutting career employees

Strengthening the discipline of State budget-finance and public debts. Photo: The Internet.

Accordingly, the Government shall strive to successfully complete the general objectives and specific objectives of the Resolution towards 2020, ensuring a balanced budget and maintaining the national financial security.

Specifically, the average state budget mobilization rate for the period 2016-2020 is about 20-21% of GDP; total budget revenue is about 1.65 times in the period 2011-2015. In particular, domestic revenues account for about 84-85%, revenues of crude oil and import-export income account about 14-16% and the proportion of central budget revenue accounts for 60-65%.

The share of State budget expenditure in the period 2016-2020 is about 24-25% of GDP on average. Specifically, the total State budget expenditure and development investment expenditures are about 25-26%, regular expenditures are less than 64%, priority for debt payment and the national reserve.

Gradually reducing the State budget overspendings, not exceeding 3.5% of GDP by 2020. The size of the public debt in the period 2016-2020 is no more than 65% of GDP, Government debts do not exceed 55% of GDP and foreign debts are not more than 50% of GDP.

Resolutely cutting down inefficient and unnecessary projects

Specifically, promoting the restructuring, improving the efficiency of public investment. Reviewing the list of investment programs and projects funded with State budget capital, public loans, resolutely cutting down the programs and projects which are not effective and not really necessary. Continuing to revise and improve the Law on Public Investment, fundamentally renovating the institutional framework for public investment management, especially the project formulation and evaluation, appraising the project and the mechanism for assessment of socio-economic efficiency after the project has been put into use.

Reviewing and innovating to further encourage private investment, foreign direct investment in socio-economic development; adopting policies for the attraction of foreign direct investment in advanced, modern, high-technology and environmentally friendly technology projects; limiting and eliminating projects using outdated technologies which pollute the environment.

Effectively restructuring State-owned enterprises, promoting equitization, reducing the shareholding of State-owned enterprises, divesting all State capital from non-state-owned enterprises in order to be used for development investment and to solve urgent socio-economic issues. Applying modern governance to state-owned enterprises; clarifying the State-owned business investment activities; improving the efficiency of the use of State resources, increasing the accountability of representatives of State capital in enterprises and supporting private development. Promoting equitized companies to list and register transactions on the stock market to make information transparent.

Continuing to restructure credit institutions; fundamentally and thoroughly handling bad debts and weak credit institutions in forms suitable to the market mechanism on the principle of prudence, ensuring the interests of depositors and maintaining stability and security in the whole system. By 2020, commercial banks will apply Basel II capital, with 12-15 banks meeting their capital adequacy requirements under Basel II; striving to reduce the level of interest rates that are competitive with the average interest rates in the ASEAN-4.

Accelerating the renovation of the public services on the basis of strengthening the autonomy in the organization, staffing, operation, and finance for public non-business units; promoting socialization; and equitization of public service units. By 2020, striving to properly and fully calculate the costs of public services; stepping up the implementation of the mechanism of bidding, placing orders and assigning tasks in the provision of public non-business services; creating an equal environment in the provision of public services using the State budget, ensuring the social policy beneficiaries, ethnic minority people, in remote areas to be provided with better services.

Focusing on restructuring State budget revenues and expenditures

Other tasks and solutions are to restructure State budget revenues and expenditures, strengthen public debt management, ensure the safety and sustainability of the national financial system; strictly comply with the principle that loans for offsetting the State budget deficit, reduce the State budget deficit to a minimum level as set by the National Assembly's resolutions, step by step increase the accumulation for development investment and repayment of loans, and increase the State reserve.

In particular, completing the revenue policy in the direction of covering all revenue sources, expanding the collection base, especially new revenue sources, in line with international practices; increasing the proportion of domestic revenues, ensuring a reasonable proportion of indirect taxes and direct taxes, taking advantage of revenues from property, natural resources and environmental protection; increasing the share of taxes and fees in total State budget revenues; minimizing the integration of social policies in tax and tax exemption, ensuring the neutrality of taxes, thus contributing to creating a favourable condition for investment and business.

Enhancing the exploitation of financial resources from public assets (especially land, natural resources and assets in the public service sector) to mobilize capital for economic development of the country. Improving the efficiency and effectiveness of the management of collection, inspections, and examination; applying modern information technology and reforming administrative procedures in budget remittance; creating favorable conditions for taxpayers and preventing transfer pricing or tax evasion; renovating, applying measures and skills of tax debt management and reduce the proportion of outstanding debts.

Step by step restructuring State budget expenditures in the direction of increasing the proportion of reasonable investment expenditures, reducing the proportion of regular expenditures associated with the vigorous renovation of the public-service administrative service sector according to the autonomy mechanism. Simplifying the machine, payroll, implementing wage reform; improving transparency and efficiency in the areas of recurrent expenditure and development investment. Restructuring budget expenditures in each domain, focusing on essential services.

Promoting institutional improvement, especially policies, tools, indicators for public debt monitoring, public debt management apparatus, ensuring compliance with the Constitution and relevant laws, in accordance with international practice. Comprehensively controlling the risk and effectiveness of public debt. Strictly controlling public debts, national external debts annually within the limits; ensuring adequate reserve for potential risks; restructuring public debts to minimize debts, refinancing risk, liquidity, exchange rates, interest rates, credit; ensuring full repayment in due time, closely monitoring the use of funds from non-state budget funds for purposes of the budget.

Raising the efficiency of the use of loan capital, step by step narrowing the scope of public debt use, focusing on key projects, and ensuring the balance of debt repayment sources; closely inspecting and supervising the use of loans for re-lending. Implementing the re-lending mechanism for local governments, credit risk sharing mechanism with re-lending agencies. Limiting the maximum level of government guarantee for new loans, limiting the guarantee limit for 2 policy banks to the maximum with the obligation to pay annual loans.

Intensifying the supervision of the implementation of the limit of self-borrowing and self-repaying foreign loans of enterprises in order to ensure the foreign debt safety criteria; review large projects; revising the regime of reporting on foreign debt statistics for self-repayment in service of the work of monitoring and supervision of quotas.

Strengthening discipline

Strengthening the discipline of State budget-finance and public debts. Specifically, tightening fiscal discipline, State budget and public debts; making revenues and expenditures within the scope of estimates, borrowings and disbursements within the plans and the limits decided by competent authorities; promulgating mechanisms and policies only when financial sources are available; minimizing the advance of estimates, transferring sources and adjusting the total investment in programs and projects funded with loans; completely handling construction debts, not to generate new debts. Enhancing the settlement of completed projects funded by the State capital, thoroughly settling the situation and strictly implementing sanctions for the handling of violations in the settlement of completed projects.

Not transferring loans for re-lending or guaranteeing the Government into state budget allocations; not using the State budget to restructure state-owned enterprises, handling bad debts of state-owned commercial banks, charter capital for commercial credit institutions, or contributing capital to financial institutions. New loans are only made after fully assessing the impact on the size of public debts and medium-term debt repayment capacity.

Continuing to reform the control of state budget expenditures towards unifying the process, focusing on the control and payment of State budget expenditures (including regular expenditures and investment expenditures) in association with the clear assignment of responsibilities and powers of the concerned units (financial agencies, the State treasuries, the State budget-using units); stepping up the application of information technology to the expenditure control and revenue management.

Strengthening inspections, examination, auditing, publicity and transparency, accountability for the State budget and public debts. Step by step developing budget estimates according to objectives, tasks, economic and technical norms and service charges and commitments.

Strengthening the State administrative apparatus

In particular, stepping up the streamlining and restructuring cadres and civil servants associated with the reform of the public-duty regime and civil servants. Vigorously reforming the process and method of organizing the recruitment, use, payment, evaluation and promotion of cadres; implementing the regime of contract with definite terms for state employees in the spirit of the Resolution of the 4th plenum of the XIIth plenum; enhancing the accountability of the heads of the officials and public employees under their respective management and the performance of their assigned tasks by the agencies or units.

Consolidating the State administrative apparatus in a streamlined, incorruptible, smooth, effective and efficient manner, with a view to further step up the decentralization of state management among the Government and the administrations of the provinces and centrally-run cities.

Studying, reviewing and adjusting the functions, tasks and organizational structure of ministries, branches, central agencies and localities towards streamlining, attaching responsibilities to decide on budget expenditures and public debts; ensuring the efficiency and effectiveness of management, allocation, balancing the state budget and debt management, contributing to the achievement of the objectives of controlling budget deficit and public debt objectives in accordance with the Resolution for sustainable development of the national finance.

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