State budget settlement in 2011: Revenue increased, deficit decreased

At the working session on the morning of April 10, the National Assembly Standing Committee gave opinions on the 2011 State budget settlement.



Good management of revenue and expenditure resulted in good results for the 2011 State budget.

2011 was a year of change in management. Right from the beginning of the year, the Government issued and vigorously implemented Resolution 11, so the budget revenue in 2011 exceeded the plan by 21.3%. Of which, domestic revenue from production and business exceeded 30%.
"This is the result of great efforts," said Nguyen Van Giau, Chairman of the National Assembly's Economic Committee.

Agreeing with Mr. Nguyen Van Giau's opinion, Vice President of the National Assembly Tong Thi Phong said: "With the ups and downs of the economy in 2011, Vietnam also had to endure the global financial crisis. In such difficult conditions, with the spirit of proactively adapting to the situation, the Government has made many efforts to apply many management measures, nurture revenue sources and handle violations, so the budget revenue and expenditure work is proactive."

According to the Audit Report of the National Assembly's Finance and Budget Committee, in 2011, total state budget revenue reached VND962,982 billion, including transfers from 2010, exceeding VND126,804 billion (21.3%) compared to the target assigned by the National Assembly.

Of which, all four main sources of revenue of the State budget increased compared to the assigned estimate. Revenue from crude oil increased by 40,905 billion VND, domestic revenue from production and business increased by 35,812 billion VND, balanced revenue from import and export increased by 17,065 billion VND, revenue from real estate increased by 25,918 billion VND.

According to the National Assembly's Finance and Budget Committee, the state budget revenue exceeded the estimate mainly due to objective factors, especially due to price increases (the consumer price index in 2011 increased by 18.13% compared to 2010, crude oil price increased by 28 USD/barrel compared to the estimate, the actual tax exchange rate was higher than the exchange rate when the estimate was made).

In addition, revenue increased thanks to the adjustment of import tax on some items that are not encouraged to be imported and increased revenue from real estate. Revenue from production and business only accounts for about 20% of the total revenue increase. This reflects that although the state budget revenue has increased, it has not come from internal economic strength and is not really stable.

Regarding expenditure, according to the Government's report, the total expenditure was 1,034,244 billion VND. According to the Audit Report of the National Assembly's Finance and Budget Committee, the 2011 State budget expenditure was guaranteed according to the estimate, meeting the tasks of socio-economic development, politics, security and national defense.

Expenditure management has made progress, and thrift and waste prevention have been implemented quite actively. However, according to Chairwoman of the National Assembly's Committee on Social Affairs Truong Thi Mai, expenditures for some important areas of education, health, science and technology, economic development, etc. have not met the budget.

Expenditure on education, training and vocational training reached 90.2% of the estimate; expenditure on health, population and family planning reached 89.1% of the estimate; expenditure on science and technology reached 89.5% of the estimate; expenditure on economic affairs reached 91.5% of the estimate.

Ms. Truong Thi Mai said that this is a problem of accessing policies, the money has been allocated enough but not all of it has been disbursed. Therefore, according to Ms. Mai, if the policy mechanism is not complete, it needs to be completed to create conditions for beneficiaries to access the program early.

Regarding deficit spending and public debt management, thanks to increased state budget revenue, the deficit has been reduced from 5.3% of GDP according to the National Assembly Resolution to 4.4%, which was assessed by delegates as a positive move.

However, despite the deficit reduction, the advance payments, advance debts, and tax refund shortages have made the deficit reduction results not very meaningful in fiscal terms.

Based on the comments, the National Assembly's Finance and Budget Committee proposed that the National Assembly Standing Committee report to the National Assembly for consideration and inclusion in the 2011 financial statement with total state budget revenue of VND 962,982 billion, total state budget expenditure of VND 1,034,244 billion, and state budget deficit of VND 112,034 billion, equal to 4.4% of GDP, excluding local budget surplus.

According to Government - LY