Budget Law draft amendment draws people's interest

A draft amendment to the Budget Law, the latest attempt to shore up supervision on government spending, has apparently struck a chord with the public.

During a monthlong online campaign to solicit feedback on the proposed changes, the proposal received almost 331,000 comments and suggestions from about 20,000 members of the public, as of Sunday, according to the National People's Congress, the top legislature.

This is the second-largest number of comments received by a draft law since the practice of publishing drafts online to solicit opinions was introduced in 2005.

The largest number, 560,000 comments, was received by a Labor Contract Law draft amendment. A proposed amendment that would slash the tax burden levied on personal incomes elicited more than 230,000 comments last year.

Details about the comments directed at the Budget Law have not yet been released.

However, several analysts said such attention to the draft shows an unusual public interest in levies and expenses, as the government continues to harvest surplus revenue.

The amendment, if passed, would establish a set of requirements on budget making and enforcing, such as requiring governments to include all revenues and spending in annual budgets, making the budget public after it is approved by the people's congresses, and submitting budget adjustments for local legislature's review before making any fiscal changes. Many of the proposed requirements are unprecedented, and others improve existing obligations.

Liu Jianwen, a financial law professor at Peking University, said the draft makes progress in outlawing undeclared incomes and sets up a system to supervise all revenues and spending.

He said the amount of undeclared income has reduced significantly in recent years, especially since a regulation requiring governments to publicize information on spending was introduced in 2008.

"Ruling out undeclared funds can help reduce the possibility of randomly collecting fees. It can also prevent (officials using) private bank accounts and curb corruption," he said.

The annual amount of undeclared funds can reach 300 to 400 billion yuan ($47 billion to $63 billion), said Yang Zhengwu, a deputy to the NPC Standing Committee, during a session to discuss the draft in June.

Li Weiguang, a professor of government finance at Tianjin University of Finance and Economics, approved of some of the changes proposed in the draft, but said the proposal dodged the basic principle of budget making and implementation.

For instance, he said, although the draft requires government budgets and adjustments to be approved by legislatures before being carried out, it does not specify the procedures if legislatures decide not to approve the proposed budgets.

The authority of legislatures in reviewing and approving budgets, Li said, is the cornerstone of other measures in the draft law to regulate government income and spending.

The Budget Law, the country's fundamental law to regulate government spending, was first introduced in 1995, a year after China reformed its taxation system and drastically improved the fiscal power.