Three public consumptions: less is not best?

(Ecns.cn)--"When it comes to governmental expenses on official receptions, vehicles and overseas trips—dubbed the 'three public consumptions'—less is not necessarily better," Liu Shangxi, an official at the Ministry of Finance, pointed out to the China Economic Weekly on Tuesday, which soon sparked heated debate among experts.

Liu, who is vice head of the Research Institute for Fiscal Science, noted that the spending needs to be rationalized to assure efficiency of government organs in performing duties. He cited expenditures on government cars as an example, explaining that budget cuts on vehicles should not be allowed to impair administrative efficiency.

Liu was soon criticized for making apparently rational speeches at an inappropriate time.

"Currently, it's still a problem for the ministries to disclose their fiscal information, and the public has been calling for modest government expenditures. In this regard, Liu's words could block reforms of the three public consumptions," commented the Dazhong Daily.

"China has initially focused on having authorities cut back on expenses. Reforms of government-owned vehicles just carried out in several pilot cities, including Hangzhou, the capital of Zhejiang Province, are facing huge challenges. Even though Liu was probably right, his statements could only apply to China in at least three to five years," added the China Youth Daily.

The three expenditures have long been considered by the general public as some of the main sources of corruption among government officials.

Scholars have estimated that annual spending on receptions, vehicles and overseas travel roughly amounts to 300 billion yuan (US$47.7 billion) each, reported the China Economic Weekly.

In May 2011, Wang Xixin, a working member of the China Administrative Legislative Research Group, revealed to China Central Television (CCTV) that the country's annual spending for the "three public" items was up to 1.9 trillion yuan (US$302 billion) in 2009, accounting for 60 percent of all administrative expenses, according to Global Voices, an online community for bloggers worldwide.

Since then, the State Council has demanded that all 98 central government departments and offices must disclose their three public expenses in an effort to cut spending and allow the Chinese public to get a glimpse into how officials are using tax dollars.

Statistics from the Ministry of Finance show that the central departments and government-owned public institutions spent 9.47 billion yuan (US$1.47 billion) on the three items in 2010, including 6.17 billion (US$955 million) on vehicle purchases and maintenance, 1.77 billion (US$274 million) on overseas trips and 1.53 billion (US$237 million) on receptions.

For 2011, the related budget was set at 9.43 billion yuan (US$1.46 billion)， dropping by 0.5 percent, with allocations for official cars, overseas travel and receptions registered at 5.92 billion (US$916 million)， 1.99 billion (US$308 million) and 1.52 billion yuan (US$235 million)， respectively.

Though the decrease was small, said Jia Kang, director of the Institute of Research at the Ministry of Finance, it was a painful step forward.

Experts say the current government budgetary system might be to blame for the delayed disclosure of spending on the three public consumptions.

There are no separate and specific sections for the three items in the current system, said Li Yan, deputy director of the Institute of Finance at the Central University of Finance and Economics. "That's why it takes so long to reveal the figures."

Budgetary expenditures are categorized on one hand by function, such as education, healthcare and public security, and on the other hand by specific purpose, including wages and construction fees, explained Li.

"The three public consumptions should be covered in the latter category," Li added. "However, items like official receptions are not listed."

"Many specific items need to be adjusted to calculate spending on the three consumptions," Li continued. "This requires further reforms in the budgetary system."

"Some ministries are worried about the accuracy of figures being summed up in this way, and are unwilling to publish their statements," noted Jia Kang.