Wednesday, July 18 2018


Financial power must be unified

Update: March, 30/2013 - 09:23

Dang Van Thanh, President of the Viet Nam Association of Accountants and Auditors, discusses management of State finances and the budget with the Viet Nam Economics Times.

To ensure the real power of the National Assembly over the State budget, amendments to the 1992 Constitution have reduced the Assembly's ruling power in this domain. What's your opinion about this?

The National Assembly is a body elected by voters. It is the representative of the people and on their behalf manages the state finance and budget in accordance with Article 75, Point 4 of the proposed draft constitution.

Under that article, the National Assembly is given the power to make national financial and monetary policies, including tax policies. In addition, the NA makes decisions on the allocation of the state budget to local governments. So they set the bench mark of the national debt, public debt, government debt and others.

This financial and budgetary institution is quite different from what is regulated in the 1992 Constitution.

Does that mean you don't feel happy with the proposed changes?

Yes. Point 4 of Article 75 talks about the rights and obligations of the NA in deciding the state budget. These rights and obligations are totally different from what is written in the 1992 Constitution and previous ones. I don't think the proposed change is in line with our country's institution and management principles on the state finance and budget.

Furthermore, what is written in Article 75 is somewhat contradictory with what's written in Article 2 of the amendments.

Article 2 states "The State power is unified, with delegation of power to, and co-ordination among, State bodies in exercising legislative, executive and judicial rights."

Meanwhile, Article 59 says "the State budget is unified"; Article 74 says "The National Assembly is the highest representative body of the people, the highest State authority in the Socialist Republic of Viet Nam"; Article 84 states "National Assembly deputies are the representatives of the people's will and aspirations, not only in their own constituencies but of the whole country as well."

So in my opinion, first, the state finance and budget must be unified. A decision is made and its management must follow the principle of unity.

Second, the NA is the sole authority to make decisions on the state budget and central budget allocation.

And finally, to ensure the principle of decentralisation in financial and budgetary management, the NA must be given the authority over the allocation of the central budget while the local budget allocation is given to the local People's Councils at different levels.

The People's Councils are vested with the power to decide on the local budget estimate in the framework of the national budget.

Don't you think that these changes are aimed at making budget policies close to reality?

Some people have complained that our existing state budget management and decentralisation policies are overlapped. As a result, some of the power delegated to the local People's Councils and Administrations only appears in legal documents. But, I think, these constraints can be rectified by good policies and measures, including professional tools.

In addition, I also want to comment on Chapter 10 about Local Government.

In the chapter it does not mention the rights and obligations of People's Councils in the field of budget and finance. In such a case, the decision of the State Budget Estimate and its approval must be vested in the National Assembly.

So in your opinion, what should be done to ensure the NA's real power over State Finance?

The most important point is that the NA will only decide the total State budget collection and the total spending for each locality.

Regarding the budget collection, the NA's decision only provides a plan, based on tax policies and targets.

The budget spending decision will have much higher legal binding as the key objective of state budget spending is the right money for the right task and the wise use of the taxpayers' money.

Furthermore, in the Constitution there should be a line: the National Assembly will decide on major works and important projects of the nation which use money from the State budget or from Official Development Assistance. — VNS

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