While finalizing the basic direction of prudent and neutral monetary policy in 2017, the Central Economic Work Conference also clearly proposed the operational direction of "fiscal policy must be more active and effective".

The following is the relevant information about the national fiscal policy in 2017 that I have carefully compiled. I hope it will be helpful to you! While the national fiscal policy in 2017 finalized the basic direction of a stable and neutral monetary policy in 2017, the Central Economic Work Conference also clearly stated

The fiscal policy should be more active and effective.

Obviously, the imagination space that fiscal policy can expand in the future is undoubtedly much larger; not only that, fiscal policy is focused on the real economy, has a multiplier effect, and will have a more direct and intuitive driving effect on the future economy.

Fiscal policy must come to the forefront. It has been observed that in the past two years, the central bank has cut the deposit reserve ratio 4 times and interest rates 5 times, but economic growth has been declining, indicating that monetary policy has encountered diminishing marginal benefits.

Given that the stock of basic currency is already very large, the space for monetary policy to continue to play a role is quite limited. In order to promote economic growth, fiscal policy must come to the forefront.

Data show that the growth rate of my country's fiscal revenue has declined at an average annual rate of 3.64% in the past five years. In 11 months of 2016, it dropped again by 1.9 percentage points year-on-year. This situation undoubtedly restricts the expansion of fiscal policy, especially budget expenditure capabilities. Positive space, policy intensity can only shift to rely on the path of deficit.

According to the fiscal budget bill, my country's deficit rate in 2016 is 3%, but 3% is only the internationally recognized safe upper limit of the fiscal deficit rate. Based on the wealth stock accumulated by our country in the past 30 years and the observation of the economic operation ecology that does not fluctuate violently, Even a deficit level of slightly more than 3% does not pose a significant risk.

In 2017, my country's fiscal deficit rate is very likely to rise by 0.5 percentage points. The most likely path is to focus on increasing the issuance of local bonds while issuing national bonds, that is, adding 1.18 trillion yuan in 2016. On the basis of yuan, the incremental scale of local debt will exceed 2 trillion yuan, and correspondingly, the scale of local debt replacement will also exceed 5 trillion yuan.

This can mobilize the enthusiasm of local governments, effectively maintain the 20% growth rate of investment, especially infrastructure investment, and form a platform to support the 6.5% annual economic growth target.

Moderately increasing the deficit ratio also provides necessary support for larger-scale tax cuts and fee reductions, and lowering taxes and fees is also an inherent requirement to enhance the effectiveness of fiscal policy.

Following the comprehensive rollout of the “business tax to value-added tax” reform, the next step that is most likely to be reduced is the industrial and commercial value-added tax rate.

The current industrial and commercial VAT rate is 17%, while the service industry VAT rate is 6%. The industrial and commercial VAT rate is significantly higher than that of the service industry.

Although the reduction in the value-added tax rate cannot be achieved in one step, it is still very possible to reduce it to 10% step by step in the future.

Compared with tax cuts, fee reductions have more room for imagination.

In accordance with the spirit of the Central Economic Work Conference, in addition to reducing corporate energy costs and logistics costs, the focus is on reducing institutional transaction costs, such as numerous government fees, government funds, and social insurance fees.

In 2015, the business tax to VAT tax reduction was 200 billion yuan, and in 2016, the tax reduction was 500 billion yuan. In addition to the measures that have been launched to reduce corporate social security payment rates and housing provident fund payment ratios, conservative calculations mean that even if there is no increase in tax cuts in 2017

With new measures to reduce fees, the scale of tax reduction and fee reduction will also reach more than 770 billion yuan.

Fiscal policy is not limited to the scope of public finance. Of course, the active and effective fiscal policy is not limited to the scope of public finance. Amplifying the energy of social financing such as PPP is also an important component.

In this regard, while making good use of the 180 billion yuan national PPP guidance fund, the expected management of private capital investment will be further strengthened.

The Central Economic Work Conference specifically proposed to strengthen the construction of the property rights protection system, which undoubtedly gives reassurance for social capital to participate in PPP; it also means that as an important force to protect PPP, legislation related to PPP will be put on the agenda in 2017.

Agenda.

In addition, the Ministry of Finance also explicitly prohibits local governments from using PPPs to issue bonds for financing in disguised form, and reminds private capital that contingent debts do not fall within the scope of local government debt repayments, which helps private capital isolate investment risks.

Importantly, according to the participation objectives, PPP projects will not stay in infrastructure fields such as municipal construction and transportation. Public service fields such as education, medical care, and elderly care will further open up to private capital.

The investment environment continues to be warmed by policy enthusiasm, and investment momentum is increasingly stimulated by institutional improvements.

If 2016 is the year when the PPP mechanism is gaining momentum and dormant, then 2017 must be the year when private capital exerts its strength and increases its investment.

The latest data released by the Ministry of Finance shows that as of the end of September, there were 10,471 PPP projects in the database, with a total investment of 12.46 trillion yuan, and the actual implementation rate reached 26%.

According to a report released by the All-China Federation of Industry and Commerce, from January to September this year, the number of PPP projects in the database and the amount of investment increased by an average of 386 and 0.48 trillion yuan per month respectively, indicating that the demand for PPP projects is increasing.