Sharing lessons learned from countries around the world and the reform-oriented budget for the construction of the State Budget Law of Vietnam is the purpose of the International Conference "Orientation for Amending the State Budget Law- International Experiences", which was recently organised in Ninh Binh province. The conference was jointly organised by the Committee of Financial and Budgetary Affairs of the National Assembly in collaboration with the Ministry of Finance, with the support of the United Nations.
This conference is one of the activities within the framework of the project " Strengthening the Capacity of Budget Oversight for People’s Elected Bodies in Vietnam" of the Committee of Financial and Budgetary Affairs of the National Assembly, technically supported by the United Nations Development (UNDP), within the period of 2013 to 2015.
The State Budget Law, approved by the National Assembly in 2002 and enacted in 2004, regulates the establishment, execution, settlement, and supervision of the state budget, as well as the tasks and powers of the government agencies at all levels in the state budget.
According to Dr Phung Quoc Hien, Chairman of Committee of Financial and Budgetary Affairs of the National Assembly cum Conference Chair, for 9 years, the implementation of the State Budget Law has played an important role in making the positive changes in revenues and expenditures of the State Budget.
"Together with the operation of the economy and the market mechanism in accordance with the requirements of the reforms for the global integration and development, the State Budget Law also exposed some shortcomings. The state budget system exposed its complexity of different guidelines, leading to the overlapped jurisdiction at all levels, complicated budget processes and unclear scope of revenues and expenditures of the state budget. The decentralization of the duties in the revenue and expenditure making processes among the budget levels are not appropriate and the estimation of the state budget is incomplete, not associated with the mission and outcomes of the activities. Besides, the regulations on the accountability of explaining the budget-related issues to the elected bodies are not specific; besides, the publicity and transparency of the budget management are not consistent with international standards,” said Dr Phung Quoc Hien.
According to Dr Hien, Vietnam is required to amend its State Budget Law. Meanwhile, the constitutional amendments also require a complete set of budget legislation to ensure uniformity, consistency, and compliance with the principles of financial and budget management, which are stipulated in the Constitution.
At the conference, the experts from the international financial institutions and developed countries shared their lessons of reforms of state budgets in the world. In particular, the participants discussed the advantages and challenges of models and mechanisms which have been operated in their countries, such as the specific budget intervention, particularly in supporting the access to education and health care as well as tax measures to help reduce inequality by providing funding for local services, the conversion methods for financial transparency at local governments, and the guidance and monitoring progress in order to improve the quality of the provincial budget allocations.
Ms Pratibha Mehta, UN Resident Coordinator in Vietnam as well as Conference Co-chair, said the budget is the most important policy tool to accomplish the national goals, including ensuring equality and equity in resource allocation.
"Policy makers need to listen to the opinions of women, the youth, the disabled and the people living with HIV and ethnic minorities living in remote areas, etc., before making important decisions about spending the financial resources of the country for any purpose," Ms Pratibha stressed.
According to Ms Pratibha Mehta, increasing decentralisation, especially to increase autonomy at local levels, as a possible revision of the State Budget Law, will provide an opportunity to further strengthen the comprehensive budget process and ensure equality.
Currently, many countries around the world have been implementing state budget construction methods based on the results of the budget, such as the Medium Term Financial Forecast and Medium Term Expenditure Framework (MTFF and MTEF). These methods provide the basis for building the annual budget as well as helping the national assembly's supervision to ensure the effective and economical use of the state budget. In addition, the National Assembly and the provincial elected bodies could also further strengthen their evaluation and monitoring of the public expenditure through the support of the state auditors. The state audit report, which provides details of public spending at all levels, can be an important tool for the National Assembly to review the state budget, as well as for the legal enforcement agencies to question.
According to the Committee of Financial and Budgetary Affairs of the National Assembly, the State Budget Law is in the process of being adjusted to better suit the context of Vietnam, striving to be in accordance with international practices and standards. The National Assembly and the Vietnam government agencies are making great efforts to follow the steps in the consultation at all levels, with other agencies, departments and professionals in related fields to gather useful comments suitable for compiling, reviewing and using in the process of editing the State Budget Law, and towards the introduction of a new Budget Law more consistent, more efficient and more supportive for the development Vietnam's economic sustainability. Openness, transparency and accountability in budget-related issues will be emphasized and improved.
Quynh Chi
Vietnamese
