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China Daily Website

Guangdong cuts spending to build frugal government

Updated: 2012-07-19 10:59
By Li Wenfang in Guangzhou ( China Daily)

Guangdong province, China's largest provincial-level economy, has announced it will freeze the growth of government spending as its fiscal income growth slows.

The move came after the central government asked the province to rein in government spending.

A statement released by the Guangdong government on Wednesday said spending on public vehicles, conferences, receptions, overseas trips and other administrative items will not be increased for an indefinite period.

The administrative budgets of the departments directly affiliated with the provincial government will be cut by 5 percent, starting from July 1 until the end of this year.

The provincial government has asked lower-level authorities to make savings plans.

The moves are aimed at stabilizing economic growth, promoting economic restructuring, balancing the budget and improving public well-being.

The statement said all savings will be spent on public well-being.

The provincial government will also suspend shows, exhibitions, parties, forums and anniversary celebrations that are held, or are sponsored by, the government.

There will also be stricter audits on fuel consumption and on the maintenance and insurance of public vehicles. The ban on the use of public vehicles for personal purposes has also been restated.

The provincial government will also promote teleconferencing and paperless offices and impose a freeze on new government office buildings and renovation projects in the second half of this year.

The growth in fiscal revenue fell short of expectation in Guangdong in the first half of this year amid slower economic growth.

The fiscal revenue of the province increased by 8.64 percent to about 299 billion yuan ($47 billion) in the first six months, but fiscal expenditure rose by 11.11 percent to nearly 286 billion yuan.

Fiscal revenue growth goal is set at 10 percent this year after surging 22.1 percent last year.

Guangdong's plan to rein in spending is in line with a national campaign.

Last week, the State Council issued a number of new regulations to curb government spending on vehicles, receptions and overseas trips. Overspending on these three items has become a focus of public criticism in recent years.

The new regulations stipulate that officials face removal from their posts if they are found to be overspending on these three key items.

Ma Kang, a Guangzhou retiree, said the provincial government's move is laudable.

"I'm fully for this move. Saving is easier than making money. Government spending on vehicles, overseas trips and receptions is so high that only a little saving there would be good for the people's well-being," Ma said.

However, Lin Jiang, dean of the public finance and taxation department at the Sun Yat-sen University in Guangzhou, said the provincial government's efforts should produce some savings in the short term but the long-term benefits are difficult to judge.

The government has issued similar statements in the past, he said.

Lin said the government emphasized its thrifty measures recently because it is afraid of a fiscal deficit, but when the economy improves, the departments can become less diligent in exercising fiscal responsibility.