The Study Of Linkage Mechanism Between The Medium-term Budget And The Annual Budget

With the demand for fiscal spending increasing dramatically,as well as the elevating risk of government's debt and pension,our country's fiscal sustainability is facing more and more severe challenges.It is necessary for budget resources to be mandatory.However,whether the Five-Year Plan for National Economic and Social Development,or the current annual budget mechanism,including the medium-term fiscal planning(MTFP)which began to implement in2015,all of them are obvious deficiencies in the construction of budget resources investment constraint mechanism.Analyzed the current theoretical exploration and practical experience of countries from all around the world,the medium-term budget is a better choice for the construction of the budget resources investment constraint mechanism.However,the conditions for the successful implementation of the medium-term budget are very strict.Not only in the policy level requirements of the macro economic situation relatively stable in the long term,the medium and long term fiscal revenue and expenditure can predicted more accurately,and the macroeconomic policy and fiscal policy relatively stable and clear,but also the medium-term budget requires to achieve good convergence and interaction with the annual budget in technical level.There have been many scholars who have studied the necessity,constraint conditions and the effects about the implementation of the medium-term budget.However,for the basic and key issues to be solved in the implementation of the medium-term budget,which is the linkage between the medium budget and the annual budget,the academic circles' research is not systematic at home and abroad.This thesis reorganizes through the existing literature material induction and summarizes,and we found that the disputes among academia mainly focus on the choice of solutions.The one is embedding the medium-term budget into the annual budget(namely “the embedding medium-term budget”).The other is the medium-term budget constraints on the annual budget(namely “the restraining medium-term budget”).However,both of the solutions will face a dilemma of choice.On the one hand,the embedded medium-term budget,which is lack of legally binding force,exist a huge security risk;On the other hand,it is impossible to support the MTFP,which is compiled according to The Recommendations of the State Council on the Implementation of Medium-term Fiscal Planning and Management(Document [2015] 3 issued by the State Council),to constraint onthe annual budget,which exists legally binding force and rigid growth.Therefore,exploring and confirming further the linkage mechanism between the medium-term budget and the annual budget at law level,make necessary binding force for the medium-term budget to the annual budget.Not only ensure the successful implementation of the medium-term budget,but also it can effectively overcome the shortcomings of the annual budget,so as to achieve the goal of the entire budget management system reform.Besides depending on administrational departments to promote the medium-term budget reform,we are facing other main obstacle to the medium-term budget reform in future,such as budget transparency at low level,tax lack of legally binding,and has not yet fully decoupled from the key expenditure.The main purpose of exploring the linkage mechanism between the medium budget and the annual budget is to build the binding medium-term budget as a breakthrough,and then solve the above problems systematically.Based on above reorganization,the thesis puts forward to do innovation of system and mechanism as motive power,promotes the Five-Year Plan for National Economic and Social Development,the Five-Year Plan for Legislation,and the medium-term budget to interconnect in time,aim,task,system and mechanism and policy,and achieves the goal of the linkage mechanism between the medium-term budget and the annual budget.All of the factors will combine efficiently to form the modernizing base of national planning management.In order to achieve organic linkage among the Five-Year Plan for National Economic and Social Development,the Five-Year Plan for Legislation,and the medium-term budget,the thesis uses the methods of system dynamics and operational research,then devises the model of the linkage mechanism between the five-year medium-term budget and annual budget.In theory,the optimal running condition of the linkage mechanism between the medium-term budget and the annual budget is the five-year annual budget accords with what medium-term devised.However,in reality,it is a small probability event that the five-year annual budget accords with what the medium-term devised.To an extent,there is some deviation between the medium-term budget and the annual budget with quantity and structure.For example,the actual result of the scale of revenue and expenditure in the five-year annual budget usually bigger or smaller than the five-year medium-term budget.Therefore,we need to update law and policy continually,minimize the gap,and evade serious deviation.Only in this way canwe achieve a better condition that the linkage mechanism between the medium-term budget and the annual budget.Basing on the result of theoretical analysis,the thesis puts forward to some suggestions among legislation,administration,policy of the linkage mechanism between the medium-term budget and the annual budget.At first,it is suggested that government can research and publish economic and financial outlook report,budgetary policy report,government debt management report,budget manual,departmental five year plan,and departmental performance report;secondly,it is suggested that governments at all levels can borrow the method to prepare the medium-term budget,which is prepare formulation procedure about the annual budget,including the interrelation between “up-to-bottom” and “bottom-to-up”;thirdly,it is suggested that every administrational department should set up department expenditure ceiling in accord with the medium-term budget;fourthly,it is suggested that every administrational department should execute budget according to budget law strictly,and grants authority a certain range of over-ceiling to administrational departments;fifthly,in order to make sure constructing the linkage mechanism between the medium-term budget and the annual budget,it is suggested that constructing the system of ensuring legislation and policy for the linkage between the medium-term budget and the annual budget,including ensure linkage mechanism between the medium-term budget and the annual budget by the Central Leading Group for Comprehensively Deeping Reforms,establish leading position for the National People's Congress in financial legislation,perfect and formulate the relevant laws and regulations,and promote the Five-Year Plan for National Economic and Social Development,the Five-Year Plan for Legislation,government's period interconnection.The original contributions of this thesis are as follows:(1)The thesis puts forward to the theoretical model and related political suggestions,which is concerned about constructing the linkage mechanism between the medium-term budget and the annual budget.It will promote a new path for exploring and solving the binding force problem of the medium-term budget constraints on the annual budget.At present,aims at lacking of binding force for the medium-term budget to the annual budget,both academia and industry groups promote related recommendations and policy suggestions about construct the “the embedding medium-term budget” and “the restraining medium-term budget”.That there are problems with their suggestions is not enough pertinence andconstraining force to some extent.In particular under the current legal frame of our country,the MTFP is no need to be authorized by legislature,and there is no legally binding force for the MTFP.Therefore,exploring and confirming further the linkage mechanism between the medium-term budget and the annual budget at law level,make necessary binding force for the medium-term budget to the annual budget.The important conditions are not only does achieve the goal of the medium-term budget reform,but also perfect institution and mechanism of the annual budget.(2)The thesis promotes the standpoint,which makes the Five-Year Plan for National Economic and Social Development,the Five-Year Plan for Legislation,and the medium-term budget to interconnect,has an important theoretical significance and valuable for application.At present,the MTFP,the Five-Year Plan for National Economic and Social Development,and the Five-Year Plan for Legislation is too hard to interconnect in time,aim,task,system and mechanism and policy.The thesis puts forward to do innovation of system and mechanism as motive power,impetus the Five-Year Plan for National Economic and Social Development,the Five-Year Plan for Legislation,and the medium-term budget to interconnect in time,aim,task,system and mechanism and policy.Not only achieve more conducive to scientific linkage between the medium-term budget and the annual budget in practice,but also the suggestions which to explore the modernizing construction of national planning management has an important theoretical significance.(3)The thesis uses the methods of system dynamics and operational research to research the issues of the medium-term budget constriction.It is a new attempt.At present,scholars at home and abroad prefer to use the methods of modern economics,such as econometrics and game theory,build budget model,and analyze the medium-term budget with positive analysis and normative analysis.The subject in study is the linkage mechanism between the medium-term budget and the annual budget,focusing on analyzing the linkage problem and operational principle.By novelty search for related literature,the thesis uses the interdisciplinary methods of system dynamics and operational research,researches the linkage mechanism between the medium-term budget and the annual budget,construct the model of system dynamics,for the linkage mechanism between the medium-term budget and the annual budget.It is a new attempt in the research method.