Friday, August 7 2020


Public sector should self-finance

Update: June, 27/2018 - 07:30
Phạm Văn Trường
Viet Nam News

Phạm Văn Trường, director of the Department of Finance and Public Administration under the Ministry of Finance, speaks to Hải Quan (Customs) Online about his ministry’s resolve to cut down costs and improve the quality and effectiveness of its public services.

In your opinion, what is the greatest significance of Việt Nam’s mechanism for financial autonomy?

The Ministry of Finance has adopted a roadmap for costs for using public services in the country. A very important concern during the development of that roadmap is to make it suitable to the capacity of the State budget and the people’s income.

An essential element in the course of developing the roadmap is to make sure that the service costs will gradually be able to cover all the expenses incurred throughout the service lifecycle, including the staff’s salary, direct costs, management costs and the fixed assets’ depreciation costs.

The decision to switch from fees to service charges is considered an important step in the course of the national renewal process in the financial mechanism of all public services. We hope the new policy will help reduce the regular spending of the State budget.

The policy for the financial autonomy mechanism has enabled all public offices to be pro-active in using their assets and human resources for their development, to improve the quality of their services and to increase their staff’s salary/wages and other bonuses.

Many public offices/agencies have been successful in applying the financial autonomy mechanism. But some are still struggling. In your opinion, what are the main hindrances?

I should say that the comprehensive renewal policy adopted by the Party and State has been highly appreciated by all Government agencies and offices. However, the course of institutionalising the Party’s and Government’s guidelines into policies and laws will take time and it can’t be done overnight.

In real life, the course of privatization of public service still occurs slowly. It has only happened in areas that can earn money easily and in localities with greater socio-economic development.

Has the Ministry of Finance adopted any measures to support public agencies to be self-financing in their operations?

The Ministry of Finance is in the course of synchronising all its legal documents for revenue-generating public service delivery units in accordance with Resolution No 19 and Decree 16/2015 of the Government. The State budget will then focus on financing for basic and essential public services as well as for public agencies operating in remote areas or regions inhabited by ethnic minorities.

The State budget will then be switched from supporting public agencies to give direct support to groups of poor people and people of social beneficiaries in the use of the essential public services.

From now until 2021, Việt Nam will try to have 10 percent of public agencies become financially autonomous units and to cut some 10 percent of direct spending from the State Budget for public agencies/units, compared with the period from 2011-2015. By 2025, another 10 percent will be slashed in direct spending from the State Budget for public agencies compared to the period from 2016-2020; and by 2030, the figure will be 15 percent compared to the period from 2021-25. — VNS





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