Supplementing to the responding from the Minister of Finance Dinh Tien Dung to the National Assembly, Deputy Prime Minister Vuong Dinh Hue said that the Government requires the Ministry of Finance to propose solutions on restructuring the State budget and ensuring safety of public debt.
The "people ask, goverment answer " session on 16 Nov
According to Deputy Prime Minister Vuong Dinh Hue, by 2015, the public debt reached maximum of 65%, outstanding Government debt of over 50%, exceeding the allowed maximum amount while the proportion of budget expenditure on debt repayment is 27.3% which is higher than the allowed international standard of 25%. Public debt is on the rise with pressure of payment, and addressing this problem is the aim of 2016-2020 period. We are facing the dual tasks of ensuring fast, sustainable development and solving the internal economic shortcomings.
Deputy Prime Minister said that many government officials and experts propose to increase the public debt maximum amount due to development demand and to ensure national defense, security and poverty reduction. However, the government has carefully calculated that the public debt maximum amount is only a minus factor and the main cause is the repayment ability. "Therefore, the Government decided not to raise the public debt maximum amount."
The question is, what is the solutions for investment development?
Deputy Prime Minister said that instead of enhancing the maximum amount, the Government directed to restructuring budget revenue and expenditure to ensure the public debt safety. The Government has submitted to the National Assembly a resolution on medium-term public investment plan, with the target of budget mobilization rate of 20-21% of GDP, the total revenue of 1.65 times compared to the previous period, in which reducing crude oil and increasing domestic revenue. Expenditures on development investment is in the range of 24 - 25%. Regular expenditure is less than 60%, reduction of budget deficit to 3.5% by 2020 ... The public debt shall not exceed 65% of GDP by 2020, the government debt shall not exceed 54% and the foreign debt shall not exceed 50%.
Deputy Prime Minister Vuong Dinh Hue at the "peole ask, goverment answer" session on November 16.
Regarding to the main solution, Deputy Prime Minister Vuong Dinh Hue said that the Government has promulgated the program of action, wastefulness prevention, spending only in the financial capacity and borrowing in the payable ability, incorporating of long-term fundamental issues and sustainable development.
"The government will create a growth motivation for steady State budget, coordinating fiscal and monetary policies and other macroeconomic policies while renovating growth models in conjunction with sustainable development," Deputy Prime Minister added.
In addition, it is necessary to propagate about tax debt servicing and prevent tax losses. "The Government's policy is to prevent tax losses other than raising the tax rate, " Deputy Prime Minister said.
In addition, the public debt structure will be focused on increasing the proportion of domestic borrowing to reduce foreign loans, transfer short-term loans into long-term loans, convert high-interest loans into low-interest loans and reduce the Government's guarantee debt. In the first nine months of this year, there is no government guarantee debt granted. The current situation tends to be better as public debt is equivalent to 62% of GDP and Government debt is 51.8%.