NA Vice Chairman of the Financial and Budgetary Committee Dinh Van Nha told the Thoi bao Kinh te Viet Nam (VN Economic Times) newspaper that Parliament should be more independent regarding State budget spending.
Some people have complained that in the past five years, public spending had reached a climax – a bad signal for the State budget. What do you think?
I agree. In the five years until 2010 over-spending reached its peak – 5.6 per cent of GDP. However, there were some reasons behind it, particularly the global financial and economic crisis and the imperative to ensure social security within our country.
In my opinion, during the period under review, the budgetary balance increased in contributions to State revenue, particularly domestic revenue, which rose from 53 to 63 per cent.
Before serving as vice chairman of the National Assembly Committee for Finance and Budget, you worked for the Ministry of Finance. In your new position do you see any constraints in the State budget?
When we talk about constraints or challenges, we need to talk about four key issues.
First, the effects of mobilising the nation's financial resource for the State budget was not fully tapped. Financial resources coming from our natural resources, particularly those from land and mineral resources, have not been efficiently extracted.
The GDP contributions to the State budget collected through tariffs, taxes and duties stood at 22.7 per cent in the five-year period between 2006-10 and there were big losses in tax fraud from foreign invested and Vietnamese enterprises. There were various reasons leading to the loss, including fraudulence in the exchange rate, trade and smuggling.
In addition, bad practice has existed for ages in our country – the establishment of funds outside the State budget, including funds collected from selling government bonds and construction lottery tickets. This is contributing to the small scale of the State budget, posing a big problem for balancing the State.
Second, the challenge comes from the poor efficacy of allocation and use of financial resources. Though social security has received due attention from the Government, the gap between rich and poor becomes wider and wider, which affects the efficiency of national poverty reduction programmes.
Third, the low level of sustainability and stability in the State budget and finally, the existing administrative reform in financial and budgetary management, although it has seen progress, has not met expectations.
In your current position do you think Viet Nam will face more challenges and difficulties in the future ?
In the next five to 10 years, our budget will face many challenges and difficulties, and budgetary mobilisation and allocation must respond to national socio-economic development targets. For example, in the five years, from 2011-15, we have set an average growth rate target from 6.5-7.5 per cent and 7-7.5 per cent for the five years after that until 2020.
Furthermore, in the process of making budgetary estimates we face many challenges, while there are variables in internal and external factors which have strong impacts on the estimate, including the economic growth rate, import-export activities, tax adjustment policy, and we hope to stimulate economic growth and economic restructuring.
Addressing the challenges and contradictions between the need to mobilise the State budget for economic development and the use of the State budget to ensure the stability for the macro economy, interest rates. The financial and monetary market also remains a tough question that has not found an answer.
Many lawmakers have agreed that the legislative body's power over the State budget has not yet been fully exercised. What is your opinion?
I can't agree more. During parliamentary meetings, more time should be spent discussing national policies and their efficiency rather than spending time discussing the increase or decrease of economic targets.
I propose that lawmakers at the central and local levels should spend more time discussing State and local budgets including estimates and the balance.
In order to improve the performance of the law-making process, in the coming five to 10 years, the National Assembly will be more independent in collecting information on the State budget, instead of waiting for data coming from the Government.
I think that's the best way to deal with lawmakers' counter-argument on the state budget. — VNS