Fiscal power of central, local govts clarified

A particular reform will be carried out from Jan 1, 2019 to divide fiscal power and expenditure between central and local governments for basic public services, according to a recent State Council notice. The reform, aimed to establish a basic public service system, will focus on clarified rights and responsibilities. The document said 18 items under eight categories are included in shared fiscal responsibilities between central and local governments, including compulsory education, basic employment services and healthcare insurance. The central government will release a national standard to deliver basic public services, which should both ensure basic needs and development in line with local economic conditions and the government’s financial status. As development differs across the country, the division of expenditure responsibilities between central and local governments for each public service will vary. The central government will take a larger ratio of public service expenditures in western parts of the country than its more-developed eastern parts, in areas such as subsidies for compulsory education. Shared fiscal obligations vary in seven items for different regions, including State stipends for secondary occupational education, subsidies for urban and rural residents’ basic healthcare insurance, and public health services. It depends on local government’s financial capacity and the number of people in need when it comes to the proportion of central government payment to cover basic employment services, medical aid and help for people facing difficulties.