Reform on the road

Will the reform on the use of government cars really reduce official expenditure on this count? There are no reports indicating such an outcome although some local governments have moved in that direction.

Hangzhou government launched its reform last month. Officials below the level of deputy bureau chief cannot use official cars for business trips. Instead they get subsidies between 300 and 2,600 yuan a month according to their administrative rank. This reform is supposed to save the government the money involved in maintaining a large number of cars.

Hangzhou in East China's Zhejiang province is not the first to attempt such a reform. Nanjing, capital of neighboring Jiangsu province, did so five years ago. Yet there is no report available of how much money the Nanjing government has saved by these measures. All that we know about is the fact that government officials get monthly subsidies for business trips.

The public have a right to ask for transparency on the results of such reform because it is taxpayers' money that is being spent. Transparency is needed because people are skeptical about policy-makers making policy against their own interests.

The skepticism is because at the deputy bureau level, an official in Hangzhou gets a subsidy of 2,600 yuan. At the lowest level, an official is entitled to only 300 yuan a month. The highest subsidy is equal to or higher than the monthly salary of an ordinary worker. Does an official at that level need that much for work-related trips?

Obviously, the subsidies are not based on work needs. Lower level officials usually travel more than higher-ranking officials. Therefore, the impact of the reform appears to be diluted.

Transparency alone can tell us whether the reform measures have indeed reduced government transport expenditure. If there is no disclosure of amounts saved by the reform, the public may have reason to suspect that the reform is actually a ploy to increase the income of officials in the form of a transport subsidy.

The way government cars are used needs to be reformed. The government spending on purchase of cars was 80 billion yuan in 2008, and use and maintenance amounts to around 300 billion yuan a year.

A study of ancient Chinese dynasties shows that the more the reforms of the tax system, the heavier the taxes eventually levied on subjects.

The only way to prevent this vicious cycle from happening with government car reform today is for the higher authorities to have a strict and transparent audit of local finances.

(China Daily 06/26/2009 page8)