China's central government will make greater transfer payments to help local governments ensure that their employees are paid in time and in full, Finance Minister Xiang Huaicheng said Wednesday.
The finance minister said that through the concerted efforts of governments at all levels, the problem of overdue wages was basically solved in some counties and townships in 2001.
Xiang made these remarks in the Report on the Implementation of the Central and Local Budgets for 2001 and on the Draft Central and Local Budgets for 2002, delivered at the current session of the National People's Congress.
China has been appropriately revising its policy on income distribution over the past few years, resulting in increases in the wages and salaries of employees in government departments and institutions year after year and in social security benefits.
The minister said that some county and township governments, however, failed to pay all the wages owed to their employees on time during implementation of the state policy on wage readjustment.
According to statistics submitted by local authorities, by the end of 2001 a total of 6.5 billion yuan, or 1.8 percent of the wages payable during the year as prescribed in accordance with the national unified wage policy, had not been paid to their employees.
Wages fall in arrears mainly in county and township governments in the central and western regions. The total revenue of local governments has been growing fairly rapidly in recent years. In 2001, it came to 779.3 billion yuan, an increase of 138.7 billion yuan over that of the previous year.
However, increases in revenue and in transfer payments from provincial budgets to governments at lower levels have been uneven between regions and the number of government-paid employees has increased rapidly, the minister said.
Although local financial departments have made great efforts to solve the problem of overdue wages, it is still hard to ensure that wages are paid in full and on time in some counties and townships. Over the past few years, transfer payments from the central budget to local budgets have been increased by a large margin, Xiang said.
The central government's expenditures in the form of subsidies for local authorities rose from 332.1 billion yuan in 1998 to 601. 5 billion yuan in 2001, an average annual increase of 21.9 percent. This rate of increase is 5.2 percentage points higher than the average annual growth rate of expenditures in the central budget.
A total of 89.2 billion yuan in transfer payments used exclusively for wages was included in the central budget for 2001 despite great pressure to increase expenditures in many other areas.
To help county and township governments in underdeveloped areas of the central and western regions to overcome difficulties in meeting their payroll demands, the central budget has provided most or all of the funding needed to implement the state policy on readjustment of income distribution in these areas since 1999.
With the exception of nine coastal provinces and municipalities directly under the central government, the other 22 provinces, autonomous regions and municipalities directly under the central government have begun increasing the wages of employees in government departments and institutions with funds from the central budget according to a relevant policy adopted in October 2001.
In addition, 5 billion yuan of the working capital from the central budget has been earmarked every year to solve the problem of seasonal occurrence of overdue wages in major grain-producing provinces.