Party General Secretary Nguyen Phu Trong has signed Politburo resolution No 07-NQ/TW in regard to the necessity and determination to restructure the state budget and manage public debts to ensure the safety and stability of the national finance, towards maintaining macro-economy stability.
The Resolution includes overall targets for restructuring the state budget and managing public debts; strengthening the mobilization, management, distribution and effective utilization of financial resources to boost socio-economic growth. The Resolution includes the implementation of cultural and human resource development tasks; ensuring social security, enhancing welfare, protecting the environment and responding to climate change; ensuring the safeguarding of defense and security and promoting international integration.
Specific targets set out by the Resolution are as follows: The contribution of GDP to the State budget on average during the period from 2016 to 2020 will be 20-21 percent, with the total budget collection rising by 1.65 times as compared to the amount collected between 2011-2015.
Domestic collection is expected to account for 84-85 percent of State budget income, with a ratio of 14-16 percent of total collection coming from crude oil and import-export activities. The central budget collection is targeted to be 60-65 percent. From 2020 onwards, the State budget collection is expected to remain at a stable and reasonable ratio in comparison to GDP.
The aim is to maintain the State budget expenditure between 2016-2020 at 24-25 percent of GDP on average. 25-26 percent of total expenditure will be allocated to development investment and regular spending will account for up to 64 percent of total GDP. From 2020, the expenditure scale will be defined appropriate to socio-economic development objectives and the capacity of resource balance to ensure safety in the public debt.
For the maintenance of national financial security: The resolution requires a positive budget balance, gradually reducing the budget deficit to 4% of GDP by 2020, and 3% of GDP by 2030. At the same time, the yearly public debt during the period 2016-2020 must be controlled at a maximum 65 percent of GDP, while Government debts and national foreign debts will not exceed 55 percent and 50 percent of GDP respectively. By 2030, public debts, Government debts, and national foreign debts shall be maintained below 60 percent, 50 percent, and 45 percent of GDP, respectively.
In order to successfully fulfil the defined targets of Resolution 07-NQ/TW, the Politburo has put forward six major solutions, including creating a favourable environment and motivation for socio-economic development, generating sustainable income sources for the State budget - along with a focus on restructuring budget collection and spending - strengthening public debt management, and ensuring the safety and stability of the national finances.
The Resolution also emphasises the need to restructure and enhance the effectiveness of public investment, as well as maintaining discipline and enhancing the efficiency and enforcement of the State management of finance-budgets and public debts.
The Politburo has assigned ministries - including the Ministry of Finance, Ministry of Planning and Investment, Ministry of Internal Affairs, Ministry of Health, Ministry of Education and the State Bank of Vietnam - to lead and organize the implementation of specific tasks as assigned in the Resolution. Specifically, the SBV has been assigned to take a lead in conducting monetary policy in line with the master plan for socio–economic development; to manage the international debts of corporations in a coordinated manner with regard to public and national debt management, while concurrently promoting the restructuring of credit institutions and decisively resolving the issue of non-performing loans in the banking system.
VMH