Research On Medium-term Budget Management Reform Of China

A comprehensive plan for the new round of fiscal and taxation systems reform has been made at the third Plenary Session of the 18th CPC Central Committee. Specially, the claim of " Public finance is the base and important backbone of State governance" has pull the role of public finance to a new level. As an important part of the fiscal management, there is no need to say more about that budget management will play a major role in the new round of fiscal and taxation systems reform. There has been 16 years since the start of the last budget management reform in 1999, from the departmental budget reform, the treasury single account-system reform to the reformation of the classification of government revenues and expenditures, the reformation of government procurement and the reformation of the full-caliber budgetary administration, the budget management in our country has gradually achieved obvious success from a relative weak management foundation. However, along with the reformation of budget management, many deeper level problems are still keep bothering us. For example, why there is always a big gap between the proposed budget and the final budget? How can we explain that as the revenue and expenditure plan to accomplish the financial target, the compiling of government budget doesn't refer to the strategy and plan of the country. How to make a breakthrough in the measuring of the results of budget avoid only using short-term target in performance budget management? How to improve the current budget balance mechanism so as to prevent the debt risk of local government? The existence of these problems, like a deep groove, separating the present situation of budget management level and the requirement of budget management in the framework of public fiance. Based on the current situation, which is the future direction for China's budget management reform moving forward?Since the 1980s, many western countries launched the medium-term budget management reform in order to make up for the shortage of annual budget management. Unlike the annual budget, the medium-term budget mainly focus on the macroeconomic and financial development trends as well as the balance in a budget cycle, through the establishment of close link between the budget, policy and planning to improve the scientific of the annual budget arrangement, even achieve the purpose of further constraining the behavior of the government. Precisely, it is the medium-term prospective that the current Chinese budget management needs to change. Many officials and scholars had expressed approval on this in the past few years. In order to implement the spirit of the The Eighteenth National Congress of the CPC and the third Plenary Session of the 18th CPC Central Committee, in October 2014, the State Council issued " The Decision on Deepening the Reform of the Budget Management System ", proposed " The establishment of the inter annual budget balancing mechanism so as to improve budget management and control ". In January 2015, the State Council promulgated " The Opinions on the Implementation of Medium-term Financial Planning Management", made deployment to accelerate the establishment of a modern financial system,improve the budget management and control and comprehensively promote medium-term fiscal planning management. Both the inter annual budget balance mechanism or medium-term fiscal planning management, are all the transitional scheme before the real implementation of the medium-term budget in China. Therefore, a comprehensive understanding of medium-term budget framework of China and a clear understanding in the relevant issues in the reform will directly determine the whether the modern financial system and the improvement of the national governance system can be achieved or not.The structure of this dissertation was arranged as following, asking questions, study of theories, analyzing the questions and solving the questions.Firstly, the paper has defined the basic concept and connotation, theoretical bases and the necessities of the medium-term budget reform. Secondly, the paper has summarized the main results of medium-term budget management reform in our country, and has explored the problems existing in the process of reform. Then, on the basis of a comprehensive analysis of the background and specific contents of the medium-term budget management happened in typical foreign countries, this paper has summarized the general reasons for the failure of these reforms, and put forward the corresponding experience. At last, this paper has analyzed the difficulties that will be faced in the future reform process and put forward the principles and ideas of our country to continue pushing forward the reform of the medium-term budget management, simultaneously put forward related suggestions on the contents of medium-term budget framework, the advancing path and other supporting measures in the reform of our country.