Fiscal Policy Cohesion Promotes Development and Safeguards Livelihood
2024-03-20
Deficit rate, special bonds, ultra long term special treasury bond, structural tax and fee reductions... The Government Work Report made comprehensive arrangements and deployment for implementing active fiscal policies this year. In accordance with the requirements of active fiscal policy to moderately strengthen and improve quality and efficiency, this year's fiscal policy has strengthened policy mix and increased regulation, showing a series of new measures and new highlights, providing a solid guarantee for promoting high-quality development and promoting Chinese path to modernization. The combination of coordinated policy tools and fiscal policy plays an important role in macroeconomic regulation. The Central Economic Work Conference proposed to strengthen countercyclical and cross cyclical adjustment of macroeconomic policies in 2024, and to moderately increase the strength, quality, and efficiency of proactive fiscal policies. How can this year's fiscal policy achieve "moderate strengthening, quality improvement, and efficiency enhancement"? In response, the Government Work Report has made a series of specific deployments. Moderate intensification is mainly reflected in the coordinated use of various fiscal policy tools and the moderate expansion of fiscal expenditure scale. This year's deficit rate is planned to be arranged at 3%, continuing to maintain a high level, with a deficit scale of 4.06 trillion yuan, an increase of 180 billion yuan from the budget at the beginning of last year. At the same time, increasing expenditure intensity, the national general public budget expenditure reached 28.5 trillion yuan, an increase of over 1 trillion yuan from the previous year, and strengthening financial support for major national strategic tasks. Government bonds play a crucial role in expanding effective investment. In 2023, the scale of local government special bonds was arranged to reach 3.8 trillion yuan, effectively promoting the construction of a number of major projects in transportation, water conservancy, energy, and other areas that benefit the current and future. In 2024, the scale of government bonds will increase significantly, including 3.9 trillion yuan of new local government special bonds and 1 trillion yuan of extra long term special treasury bond, which will be used specifically for the implementation of major national strategies and security capacity building in key areas. Together, these two items will reach 4.9 trillion yuan. In addition, most of the additional 1 trillion yuan of treasury bond issued in the fourth quarter of 2023 will be used this year. "These are all solid government expenditures that can drive and expand effective social investment, better support key areas in forging strengths and addressing weaknesses, activate economic development momentum, promote high-quality development and economic transformation and upgrading," said Minister of Finance Lan Fo'an. Yang Zhiyong, Director and Researcher of the Finance and Taxation Research Center of the Chinese Academy of Social Sciences, believes that these arrangements reflect the requirements of this year's active fiscal policy to moderately increase its strength. "The scale of the fiscal deficit has moderately expanded compared to 2023, and the planned deficit rate arrangement of 3% takes into account the sustainability of finance.". Moderate efforts are still being made to continue implementing tax and fee reduction policies, highlighting more precision and effectiveness. Last year, by continuing to optimize and improve a series of tax and fee preferential policies, the country added over 2.2 trillion yuan in tax reduction and fee deferral, effectively helping to stabilize market expectations, stimulate market vitality, and promote economic recovery. According to the deployment, this year we will implement the policy of structural tax reduction and fee reduction, with a focus on supporting technological innovation and the development of the manufacturing industry. "Scientific and technological innovation drives industrial innovation, which is the key to the formation of new quality productivity, and also the key to promoting high-quality development and promoting Chinese path to modernization. Next, we should continue to play the important role of tax policies in supporting scientific and technological innovation, and implement and support the start-up
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