The Study About The Reform Of Public Financial Transfer Payment System

China is an unitary centralized state, Local government is under the influence ofthe central government. Whatever is under the planned economy system or the marketeconomy system, local government and the central government have much obviousinterest conflict. we argues that the interest conflict depends on the definition ofgovernment ownership right, which is belong to the central government functionrange, which is belong to local government functions range. Delimitation of the rightsand obligations among the different levels of government, they can be in harmonyand avoid interest conflicts. The public financial system is to determine the rights andobligations among the different level of government. Due to much reason, Financialbudget do not burden Financial expenditure responsibility, local government needsthe financial transfer payment system playing a role that adjusting the interestconflicts. In general, Revenue of the central government is high, but the expenditureis low; the local revenue level is low, but the expenditure responsibility is much, thefinancial transfer payment system can adjust their interest relationship.We thinks that the system of financial transfer payment is an important tool inhandling intergovernmental conflicts. It is not only an economic subject, but also apolitical subject. After the founding of new China, we established a highly centralizedplanned economy system. If the local government can not meet the demand of localexpenditure,the central government will give funds to local government for solvingthe interests conflict. Along with the constantly changing benefit relation of Chinesedifferent level government, the financial system is also adjusted by the centralgovernment and the form and content of the financial transfer payment system isincreasing ceaselessly. In1994, China implemented the new financial managementsystem reform, established the standardized financial transfer payment system foradjusting new intergovernmental interest conflict. Practice has proved thatintergovernmental relations are so harmonious that achieve the central planning target, promote the rapid development of economy and society in the times of thefinancial transfer payment system playing the important role; conversely, the centralgovernment is difficult to control the local government and the intergovernmentalinterest conflict aggravate.This will cause the waste of resources and reducedefficiency so that the goal of economic and social development is difficult toachieve.Under the market economy system, the government should draw a line with themarket, public finance is to provide public goods and public services. The purpose ofthe financial transfer payment system is narrowing the gap of different levelgovernment providing public service.This paper takes Jilin Province as an example,calculate the equalization effect of different county after accepting the financialtransfer payment by the method of Gene coefficient in the years2001-2009. Thispaper points out that Chinese financial transfer payment system problems, analyze thedeep level reason including backward the political system reform, incomplete taxsystem reform and lack of high level legal basis.The financial management system is relatively perfect in western developedcountries. To learn and draw lessons from the experience, this paper introduce thefinancial transfer payment system in detail specially distinguishing federal system andunitary state. In general, the law clearly provides all levels of government financialpower and responsibility; financial transfer payment mode of distribution is scientificand rational; the central government master so enough fund that influence on thebehavior of local government.Financial transfer payment system reform is a mandatory system change,Chinese financial transfer payment system reform should combine national condition,draw lessons from the advanced experience of developed countries. The overall goalof financial transfer payment system reform is dealing with the intergovernmentalinterest conflict, the specific goal is achieving regional equalization of public servicesand macro-control. Firstly,We Should promote the tax system reform includingclearing the financial power and expenditure responsibility at all levels of government,reasonably determine the total amount of financial transfer payment. Secondly, Wemust improve the legal level of the financial transfer payment system,regulate clearly the legal status of the financial transfer payment parties, approval procedures, thebasis of distributing. Thirdly, integrate the existing financial transfer payments projectincluding canceling tax return and increasing general transfer payment proportion,and so on. Fourthly, look for the chance of intergovernmental economic cooperationand explore horizontal mode of financial transfer payment. At last, establish an openand transparent formula allocating the funds of financial transfer payment.