Hot on the Web

Reduce administrative costs

(China Daily)
Updated: 2010-03-30 09:00

Reduction of administrative expenses should be regularized in order to lower the government expenditure to international standards, that is, to 5 percent of State revenue, says an article on Xinhua.cn. Excerpts:

A State Council working conference on March 23 asked all central government departments to cut their administrative costs by 5 percent this year. This is the second time such a reduction has been demanded since 2008.

Administrative expenses of government departments have been increasing by more than 100 billion yuan a year since 2005, hitting nearly 1,100 billion yuan in 2009 and accounting for about 30 percent of the overall fiscal revenue with an annual growth of 23 percent. The bulging government costs not only add to people's tax burden, but are also a misuse of limited funds to improve people's livelihood.

Regularizing the index of annual government expenditure reductions with a settled proportion is the first step toward building economical governments. If the annual reduction index, say 5 percent, can be achieved by governments of all levels, it can result in an annual saving of 55 billion yuan for the first few years.

The international standard for the share of administrative cost in overall fiscal expenditure is about 5 percent. If the central government can lower its cost to the international level and the use of the money thus saved can be supervised by the public, more funds can find their way to medical service, education and social securities.