During the period of 1989, in view of some deep-seated problems that have not been solved since the reform and opening up, China put forward the policy of rectifying and deepening the reform, continued to control the total social demand, adhered to the policy of tightening both finance and credit, and realized the total balance of social supply and demand.
The main financial measures are: strengthening tax collection and management, especially strengthening taxes on collective economy, individual economy and private economy according to law; Strictly clean up and control tax incentives; Gradually transfer some extra-budgetary funds to the budget, and gradually increase the proportion of fiscal revenue to national income;
Appropriately increase the investment in defense expenditure, key construction funds, agriculture, education and science, ensure the repayment of national debt, and reduce operating expenses and administrative expenses to varying degrees; Insist on streamlining institutions and reducing redundant staff; Control the total scale of social investment and adjust the investment structure. When the total social demand and total supply are generally balanced, fiscal policy turns to elastic collocation.
On the one hand, we will continue to control the total demand by strengthening tax collection and management, regulating extra-budgetary funds, issuing treasury bills to residents and enterprises, and controlling the scale of budgetary expenditures; On the other hand, by adjusting the expenditure structure, increasing the expenditure on supporting agriculture, ensuring the investment in key construction, increasing the expenditure on education and science and technology, promoting the adjustment of economic structure and increasing effective supply.
Extended data:
There are two main types of fiscal policy: one is aggregate-oriented fiscal policy; The second is the structure-oriented fiscal policy. The former mainly adjusts the total social demand and total social supply through the expansion or contraction of fiscal policy according to the cold and hot changes of the macro-economy, so that the two tend to be balanced. The goal of the latter is to optimize the macro-structure, which basically does not affect the total amount.
Since the reform and opening up, China has implemented a tight fiscal policy for most of the time. 1998-2003, China implemented a proactive fiscal policy, which effectively resisted the impact of the Asian financial crisis, boosted GDP growth by 1.5 to 2 percentage points every year, and effectively promoted sustained, stable and rapid economic development.
The essence of proactive fiscal policy is expansionary fiscal policy, which belongs to the total control policy and can only be an expedient measure. Long-term implementation will have serious negative effects.
Foreign experience shows that long-term dependence on financial means to solve the aggregate problem will lead to economic stagflation. At the same time, the expansionary fiscal policy will strengthen the role of the government in allocating resources and produce institutional benefits that are contrary to the trend of market-oriented reform.
Correspondingly, economists generally believe that a prudent fiscal policy is a long-term policy focusing on optimizing the structure, and its core is "moderate tightness, coordination and long-term", also known as "neutral" fiscal policy.
The current problem is mainly the distortion of macro-structure. Macro-structure is not only an economic structure, but also a social structure including regional structure, urban-rural structure and income distribution structure, which requires fiscal policy to change from a simple "economic policy" to a comprehensive "social policy" and pay more attention to long-term problems.
Under the condition of market economy, the financial constructive expenditure will tend to decrease, while the social expenditure on education, health, science and technology, environmental protection and other aspects will gradually increase. Because finance not only solves economic problems, but also has an important function: solving social problems.
Under the prudent fiscal policy, fiscal expenditure will be more invested in the system reform in education, social security, medical and health care and income distribution.
Implementing a prudent fiscal policy and incorporating more humanistic care factors can also promote the change of development concept: from simply pursuing economic growth to pursuing all-round development of economy, society and people, which is completely consistent with the Scientific Outlook on Development proposed by the government.
Baidu Encyclopedia-Tightening Fiscal Policy