We Will Restart The Price Adjustment Fund &Nbsp More Frequently, And Fiscal Policy Will Help Stabilize Prices.

Wen Jiabao, premier of the State Council, published an article in "seeking truth" magazine in September 1st.

restart

Price adjustment fund re unveiled

Through fiscal policy to stabilize prices, one of the most prominent examples is that the price adjustment fund has been announced again everywhere.

The administrative measures for the collection and use of the Qinghai price adjustment fund have been put into effect since September 1st, in order to establish a regulatory mechanism that the government uses economic means to stabilize market prices, and maintain the overall level of market prices basically stable, so as to ensure the basic livelihood of the masses.

The the Ningxia Hui Autonomous Region government has also said that it will arrange a price adjustment of 40 million yuan.

Hubei has recently announced that the province will formally implement the price adjustment fund management method from October 1st, that is, to collect some of its income from enterprises, institutions and individual businesses, and to subsidize producers and traders or difficult people and store important commodities when the prices of basic necessities such as grain, oil and non-staple food fluctuate abnormally.

Before that, Beijing also indicated that it was studying and expected to set up a price adjustment fund before the end of the year to give full play to its role in compensation for government price policy.

More at the municipal level.

In the past week, Jiangsu Suqian and Guangdong Foshan have announced the opening of the price adjustment fund.

Guangzhou has begun to implement the regulation of the price adjustment fund, and clearly collected the special funds collected to stabilize and regulate the abnormal fluctuation of important commodity prices which are closely related to the production and life of the people.

Li Quan, an Associate Research Fellow of the Financial Science Research Institute of the Ministry of finance, thinks it is necessary to restart the price adjustment fund.

He told the economic reference daily that the price adjustment fund is not a new topic.

From the point of view of income distribution, this fund is an important measure for fiscal allocation in a fair way.

As early as 1988, the State Council issued the circular on the trial of appropriate subsidies for the change of retail prices of major non-staple food to workers, requiring the establishment of a non-staple food price adjustment fund in cities throughout the country.

This time, this initiative has been re opened by some local governments, which is related to the instability of currency value and the fluctuation of commodity prices. The local government is trying to regulate prices, swallow commodities and stabilize the market through this way.

"However, once prices are stable, it is necessary for the price adjustment fund to withdraw from the market orderly. This is only an effective supplement to the market failure, rather than a substitute for the market."

Li Quan said.

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Additional financial subsidies

In response to price increases, the central government subsidies have also been further strengthened, and some of the expenditure on fiscal funds has been accelerated.

Weak agricultural foundation is considered as one of the deep reasons for the rising price of the current round.

In August 31st, the Ministry of Finance said that it was necessary to speed up the progress of financial capital expenditure, and to reach 2 billion 812 million 190 thousand yuan in advance to various regions in 2012 to the central financial agricultural comprehensive development sector, an increase of 635 million 760 thousand yuan, and an increase of 29.2% compared with 2011.

From the guidance of the indicators, the agricultural funds will focus on water conservancy and grain production areas.

Before long, in order to further strengthen the local government's ability to control grain and solve the shortfall of the local grain risk fund, the State Council recently decided to increase the scale of the national grain risk fund by 8 billion yuan.

Among them, the central government's new grain risk fund has a central subsidy of 4 billion 400 million yuan.

"At this time, the State Council decided to increase the national grain risk fund and directly increase the central subsidy, which is also the local regulation of the financial system on the current macroeconomic system, which not only promotes grain prices to stabilize, but also reflects the government's determination to deal with economic fluctuations."

Li Quan said.

Tax reduction for enterprises is also considered to be an effective way to reduce the risk of price rise from the supply side.

Some small and small enterprises will continue to enjoy preferential income tax this year.

According to another news, the "12th Five-Year" SME pformation and growth plan has been completed, and the consultation will be released in the near future. At the same time, it will also include the "12th Five-Year" SME service system construction plan, and the plan will make clear provisions in the tax reduction of small and medium-sized enterprises.

In addition, the tax reduction policy is also aimed at increasing the income of residents, especially the middle and low income groups, and improving people's livelihood, so as to raise public's ability to bear prices.

In September 1st, the new personal income tax law was put into effect.

According to the Ministry of finance, the tax payer's salary will be reduced from about 28% to about 7.7% after the adjustment, and the number of taxpayers will be reduced from about 84 million to about 24 million, which means that about 60 million people do not have to pay personal income tax.

The head of the Ministry of Finance said that the reduction of the tax burden on the middle and low income groups is a combination, which will substantially reduce the burden on the middle and low income tax groups.

In addition to tax cuts, this year, the financial sector is committed to increasing investment in improving people's livelihood.

According to the data released by the Ministry of finance, from 1 to July, the national medical and health expenditure and housing security expenditure increased by 60% over the same period, education expenditure increased by 25.8%, and social security and employment expenditure increased by 39.1%.

background

Fiscal policy is popular.

China's price level has risen rapidly since the beginning of this year.

In response to this macroeconomic problem, the central bank has repeatedly raised the reserve ratio and deposit interest rate for several times.

But in the two quarter, China's economy has seen a new slowdown. The tightening of monetary policy may lead to a further slowdown in economic growth.

Against this background, some economists have suggested that, in addition to the means of reducing the price rise by tightening money, we can also expand the fiscal expenditure and increase the supply of products.

Now that fiscal policy has increased the overall level of stabilizing prices, it has undoubtedly been affirmed by them.

Su Jian, an economics professor at Peking University, believes that from the recent economic data, China will be in a period of high inflation in the second half of this year and even in the next few years. Under the existing macroeconomic regulation system, the government will adopt a tight demand management policy to curb inflation, and it will tolerate a certain degree of decline in economic growth.

However, the current inflation is driven by cost. Therefore, the government should adopt a supply management policy to reduce taxes and reduce the production costs of enterprises, so that inflation can be suppressed and economic growth will not be affected.

"China's current inflation is formed by imported inflation, food driven structural inflation, and wage driven cost push inflation. All three kinds of inflation can be attributed to cost push inflation."

Wang Jian, vice president and Secretary General of the national development and Reform Commission of China's macroeconomic society, told the economic reference daily that we do not need to worry about the cost push inflation of food, wages and imports, which will become out of control, because as long as cost push inflation, it will not turn into hyperinflation.

Hyperinflation will only occur in the overheated environment of man-made currency, and there is no need to be overly frightened by the inflation process caused by natural factors.

Wang Jian further said: "I object to using interest rate policy to fight inflation. It is not that we do not need to manage inflation, nor do we think inflation is conducive to economic growth, but because monetary policy can not cure current inflation. Therefore, we should change the way to control inflation, that is, shift to fiscal policy, such as linking fiscal subsidies to inflation rates and implementing anti inflation subsidies for middle and low income groups."

expectation

Further efforts should be made in the future.

Although the market generally judged that in August China's CPI growth may fall, or even a downward trend in the years.

But economists believe that in view of the complexity of the current causes of China's price rise, even if the future decline, C PI growth will also maintain a high level, so in the prevention of price increases, fiscal policy should be further intensified.

Chu Jianfang, chief macroeconomic economist at CITIC Securities, said that from the economic and inflation trend, the tightening policy in the first half has slowed the economy in the two quarter. As the three quarter of high inflation and negative interest rates still exist, monetary policy should not be significantly loosened. Therefore, we suggest that the fiscal policy in the second half of this year be fine-tuning and more positive.

The premise of moderately relaxing fiscal policy is good fiscal revenue and expenditure.

The fiscal surplus of 1 trillion and 300 billion yuan in the first half has laid a good foundation for the positive fiscal policy. Taking into account the scale of the budget deficit of 900 billion yuan this year, the overall financial situation in the second half of this year is better.

Zhou Jingtong, senior economist of the strategic development division of the Bank of China, also suggested that we should continue to implement the proactive fiscal policy, pay more attention to subsidies and tax cuts, improve supply and solve cost driven inflationary pressures.

He told the economic reference Daily reporter that we should continue to implement the proactive fiscal policy. First, we should pay more attention to optimizing the expenditure structure and improving the efficiency of expenditure.

We should increase expenditure on affordable housing construction, increase financial subsidies, encourage and stimulate farmers' enthusiasm to grow grain and grow vegetables.

Two, we should pay more attention to the unique role of tax cuts.

For enterprises, tax reduction can lighten the burden of enterprises, expand and improve supply, and stabilize economic growth; for individuals, tax reduction can increase residents' income, improve income distribution and promote household consumption.

Li said that in addition to the regular macroeconomic support, the government will continue to perform some local regulation, such as the control of housing prices in the first half of the year and the regulation of grain prices.

The direction of financial support is not confined to a specific field. In the future, it will continue to support the important fields such as agriculture, rural areas, social security, education, medical treatment, and some specific problems related to the national economy and the people's livelihood.