The Research On The Reform Of China’s Special Transfer Payment

Special transfer payment is an important part of the transfer payment system in our country. Since the implementation of tax-distribution system, China’s special transfer payments are on the increase in size. The special transfer payments the central government to the local increased from 36.1 billion RMB in 1994 to 1.8804 trillion RMB in 2012, an increase of 52 times, with an average annual growth rate of 26.09%. The share of the special transfer payments in the whole payments transfer from the central to the local governments decreased year by year in general, being 43.3% in 2013. There are a lot of special transfer payment projects, covering almost all economic and social activities, playing an important role in strengthening the central government macro-control ability, achieving specific goals of macroeconomic policy and easing the financial difficulties in some areas.But the special transfer payment has many problems in China, and has been widely concerned and criticized by society. The main problems have the following aspects. Lots of projects, repetition and overlapping, decentralized funds, which is not conducive to the implementation of the objectives of the central macro-control policies; Scale being too large, local governmental supporting projects being too much, which influences the increase of the local financial resources and has caused a lot of problems; Part of the projects establishment and decision procedures being not standardized, too much involved in competitive field, the public transparency, the discretion rights in the fund allocation and the supervision and restriction mechanism being not perfect, which is easy to induce various rent-seeking and corruption; Valuing redistribution but belittling performance, which caused the low rate of budget implementation, the slow progress of project execution and the poor use effects of the funds, etc. In recent years, the call for reform of special transfer payment has been high, but it is difficult to identify much change.The main reasons for the above problems and difficulties have the following aspects. The transformation of government functions is not in place, and the government is more like expenditure and administrative measures with the characteristics of short period and quick effectiveness. Special transfer payment is in line with the preference of government; The boundary between government and market as well as between government and social is not clear, and the government often involved in competitive sectors; The division of the administrative power between central and local government is not clear and reasonable enough, and the local takes too much powers and expenditure responsibilities with a serious shortage of financial resources; Local government expenditure preference makes the central tend to use special transfer payments to implement the policy intentions; The distribution of the special transfer payments is managed by many departments, and most of the central departments have the "secondary distribution". They fight the enemy separately, compartmentalization, lone some, fragmentation, leading to excess, small and repeated cross special transfer payment projects, low service efficiency of funds; Examination and approval procedures are not standardized, which makes the problem of repeated cross more serious. The internal management and supervision mechanism of some projects still be loopholes, which increases the risk of special funds. The related reforms such as the financial management system reform, the administrative system reforms and related legal system construction are not yet in place, restricting the pace of the special transfer payment reform.In this paper, we study the special transfer payment by drawing on the public finance theory, the fiscal decentralization theory, the government economic function and economic order standardization theory, and the transparent government theory. The principles mainly include the following contents. To achieve social harmony, the fiscal transfer payment should promote social fairness, be mainly based on the basic public services, advance steadily on the basis of the legalization; Establish and improve the transfer payment system must be based on the current situation and development trend of the fiscal decentralization, and we should be rationally divided the administrative functions and the financial revenue and expenditure between the central and local government; Special transfer payment should be focused on macroeconomic regulation and control, must be supported by legal system construction. Whether special transfer payments management is standardized has an important impact on the market economic order. Special transfer payments must follow the principle of transparency. The western developed countries widely carried out special transfer payment system, and some of their practices can provide beneficial reference for us.Special transfer payment system is influenced not only by the public finance system, but also by the political system, so the special transfer payment reform must solve some deep-seated contradictions. The reform needs to promote from the top by the central, and the Ministry of Finance should assume liability of reform, all regions and departments should co-ordinate and work together. The central should be clearly define the management responsibilities of special transfer payment between financial department and the department in charge of the business, being combined to promote the transformation of government functions and the large department system reform. The financial department is mainly responsible for the implementation of the central macro-control intention, making rules and supervision and inspection. The business department is in charge of the formulation of industrial policy and policy implementation, accepting the oversight of the financial department. The Ministry of finance should escape from the specific transaction in examination and approval, focus on the transfer payment policy research and system design, and take on the main responsibility of the special transfer payment reform. Business department should change idea and transform function, actively cooperate with the reform, and turn the focus on the industry regulation, standard setting, overall planning, information service etc. To increase the participation of social intermediary organization on the management of special funds, with the promotion of government purchase service. Intermediary organization and evaluation experts should be honest and trustworthy, and fulfill their social responsibility. The discipline inspection departments should push forward the reform through punishing and preventing corruption, and severely punish illegal behaviors of special transfer payment.We can promote the reform from two aspects. On the one hand, reform the political system and the related reform; at the same time, deepen financial reform and institutional innovation. Many aspects of the political system reform need to gradually implement and take quite a long time, so the focus should be deepening financial reform being combined with the transformation of government functions under current conditions. First, change the functions of government, transform the universal government to the "limited liability" government, and streamline administration and institute decentralization, gradually quit from the competitive spheres. Second, rationally divide the powers and expenditure responsibilities between the central and local so that the financial resources of governments are in line with their respective responsibilities. Third, enhance the clearing integration and adjustment of special transfer payments projects, cancel the outdated project and the project which has completed the historical mission, adjust part of the expenditure project which belongs to the central powers as part of central government expenditure, adjust some special transfer payments which belong to the local government to general transfer payments, integrate the repetitive and cross projects, and standardize the retention of the projects. Fourth, strengthen the management of special transfer payments, perfect the decision-making mechanism, regulate the funds allocation system, strictly limit and standardize fund supporting policies, and improve the mechanism of the public, strengthen financial internal control. Fifth, strengthen the supervision and inspection of special transfer payments, and build a full range of supervision system to intensify punishments and strengthen the supervision effect. Sixth, actively promote the reform of fiscal management system, the administrative system and the construction of legal system. Seventh, promote the construction to build punish and prevent corrupt system, providing a strong guarantee for the realization of standardization of special transfer payment.