The following is the full text of the Report on the Implementation of the Central and Local Budgets for 2008 and on the Draft Central and Local Budgets for 2009, which was submitted for review on March 5, 2009 at the Second Session of the Eleventh National People's Congress and was adopted on March 13:
REPORT ON THE IMPLEMENTATION OF THE CENTRAL AND LOCAL BUDGETS FOR 2008 AND ON THE DRAFT CENTRAL AND LOCAL BUDGETS FOR 2009
Second Session of the Eleventh National People's Congress March 5, 2009
Ministry of Finance of the People's Republic of China
Fellow Deputies,
The Ministry of Finance has been entrusted by the State Council to report on the implementation of the central and local budgets for 2008 and submit the draft central and local budgets for 2009 for your deliberation and approval, and also for comments and suggestions from the members of the National Committee of the Chinese People's Political Consultative Conference (CPPCC).
I. Implementation of the Central and Local Budgets for 2008
In the face of the grim and complex situations at home and abroad, the people of all our ethnic groups under the correct leadership of the Communist Party of China and the guidance of Deng Xiaoping Theory and the important thought of Three Represents, thoroughly applied the Scientific Outlook on Development and comprehensively implemented the principles and policies of the central leadership and the decisions and resolutions of the First Session of the Eleventh National People's Congress (NPC) in 2008. As a result, we made major continued achievements in reform, opening up and socialist modernization. The central and local budgets were satisfactorily implemented and fresh progress was made in reform and development of the public finance system.
National revenue reached 6.13169 trillion yuan, an increase of 999.512 billion yuan or 19.5% over 2007 (both here and below), equivalent to 104.8% of the target. This consists of 3.267199 trillion yuan collected by the central government and 2.864491 trillion yuan collected by local governments. Added to the 110 billion yuan taken from the central budget stabilization fund, total revenue came to 6.24169 trillion yuan. National expenditures amounted to 6.242703 trillion yuan, an increase of 1.264568 trillion yuan or 25.4%, equivalent to 101.7% of the target. This figure consists of 1.337431 trillion yuan used by the central government and 4.905272 trillion yuan used by local governments. Added to the 19.2 billion yuan set aside for the central budget stabilization fund, total expenditures amounted to 6.261903 trillion yuan.
Revenue in the central budget totaled 3.361192 trillion yuan, an increase of 499.997 billion yuan or 17.5%, equivalent to 103.3%of the target. This consists of 3.267199 trillion yuan directly collected by the central government and 93.993 billion yuan turnedover by local governments. Added to the 110 billion yuan from the central budget stabilization fund, total revenue came to 3.471192 trillion yuan. Expenditures in the central budget totaled 3.631992 trillion yuan, an increase of 673.997 billion yuan or 22.8%, equivalent to 102.5% of the target. This figure consists of 1.337431 trillion yuan used by the central government and 2.294561trillion yuan in tax rebates and transfer payments to local governments. A total of 19.2 billion yuan was set aside for the central budget stabilization fund. Total expenditures thus added up to 3.651192 trillion yuan. Expenditures exceeded revenue, leaving a deficit of 180 billion yuan, which was within the target approved at the First Session of the Eleventh NPC. The outstanding balance of government bonds in the central budget at the end of 2008 totaled 5.327076 trillion yuan, which was under the set limit of 5.518585 trillion yuan.
The central government's tax rebates and transfer payments to local governments. The central government turned over 2.294561 trillion yuan in tax rebates and transfer payments to local governments in 2008, an increase of 480.772 billion yuan or 26.5%, representing 106.1% of the target. This total consists of 428.219 billion yuan in tax rebates, up 3.9%, 869.649 billion yuan in fiscal transfer payments including general transfer payments, a 22% increase, and 996.693 billion yuan in special transfer payments, a 44.6% increase. The large increase in this last item was mainly due to the huge increase in expenditures required to subsidize key local programs such as education and medical and health care. Tax rebates and transfer payments turned over to local governments became part of the revenue of local governments, which made arrangements for their utilization. Transfer payments from the central government accounted for an average of 38% of local government spending nationwide and 54.4% in the central and western regions.
Revenue of local governments totaled 5.159052 trillion yuan, an increase of 988.001 billion yuan or 23.7%, equivalent to 106.4% of the target. This consists of 2.864491 trillion yuan collected by local governments and 2.294561 trillion yuan in tax rebates and transfer payments from the central government. Local government expenditures totaled 4.999265 trillion yuan, an increase of 1.079057 trillion yuan or 27.5%, equivalent to 103.1% of the target. This total consists of 4.905272 trillion yuan spent by local governments and 93.993 billion yuan turned over to the central government. Revenue exceeded expenditures, leaving a surplus of 159.787 billion yuan, which mainly came from the surplus revenue in the central and local budgets that was not spent and will be rolled over into local budgets this year.
In addition, revenue from government-controlled funds nationwide totaled 1.563635 trillion yuan, an increase of 446.72 billion yuan or 40%. Expenditures from these funds came to 1.49847trillion yuan, representing an increase of 530.026 billion yuan or 54.7%.
Revenue from the funds controlled by the central government reached 252.566 billion yuan, an increase of 78%. This large increase was mainly attributable to profits from the sale of lottery tickets coming under budgetary control and strong growth in revenue from the foreign exchange funds controlled by the central government. Total revenue includes 20.259 billion yuan from the fund for developing the Three Gorges Project, 55.504 billion yuan from the fund for developing railways, 9.621 billion yuan from civilian airport administration and development fees, 9.148 billion yuan from port development fees, 14.87 billion yuan from the fund for providing continuing aid to residents relocated to make way for the construction of large and medium-sized reservoirs, 34.814 billion yuan in profits from the sale of lottery tickets, and 68.491 billion yuan from operations of the foreign exchange funds controlled by the central government. Added to the 55.987 billion yuan from 2007, total revenue came to 308.553 billion yuan. Expenditures by the central government from funds under its control totaled 205.672 billion yuan, an increase of 94.5%. This includes 20.456 billion yuan from the fund for developing the Three Gorges Project, 62.1 billion yuan from the fund for developing railways, 5.313 billion yuan from civilian airport administration and development fees, 10.185 billion yuan from port development fees, 20.547 billion yuan taken from profits from the sale of lottery tickets to support social welfare programs, sports, education and other public service programs, and 68.287 billion yuan from operations of the central government foreign exchange fund. Added to the 46.489 billion yuan in subsidies for local governments from the fund for providing continuing aid to residents relocated to make way for the construction of large and medium-sized reservoirs and the 56.392 billion yuan rolled over into this year, total expenditures amounted to 308.553 billion yuan.
Revenue from funds controlled by local governments reached 1.311069 trillion yuan, up 34.5%. This huge increase was mainly the result of the incorporation of all the income from the transfer of land-use rights into local budgets. Total revenue includes 1.037528 trillion yuan from the transfer of land-use rights and compensation for the use of new land for construction and 118.488 billion yuan from road maintenance fees. Total expenditures by local governments taken from the funds they control increased by 49.9% to reach 1.292798 trillion yuan. This figure includes 1.01725 trillion yuan in land-related expenditures which consists of 377.815 billion yuan as compensation for land requisition, housing demolition and resident relocation and subsidy grants to farmers for land expropriations, a large increase of 113% primarily attributable to the widespread increase in the level of compensation paid to farmers dispossessed of their land; and 128.622 billion yuan for developing and protecting farmland; 14.165 billion yuan for building low-rent housing; 36.988 billion yuan for developing rural infrastructure and developing and protecting primary farmland; 303.532 billion yuan for promoting urban development; and 156.128 billion yuan generated from the transfer of the land-use rights of bankrupt state-owned enterprises and those converted into joint stock companies and used to provide for their laid-off employees. A total of 117.344 billion yuan was spent in financing road maintenance.
Revenue from government-controlled funds was used exclusively for its intended purposes. The discrepancy between revenue and expenditures from these funds in 2008 arose primarily as a consequence of the requirement to roll over a portion of this revenue into this year in accordance with the measures for managing these funds.