People-first spending

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    The prudent fiscal policy the authorities have said they will pursue to help cool off the economy will naturally lead to less public spending on construction projects next year.
This means that as the national coffers continue to swell, the government will have more financial resources to tap to improve the public welfare. Policymakers should seize this golden chance by rapidly shifting the focus of their fiscal policy to spread the benefits of our phenomenal economic growth to the people.
The Ministry of Finance confirmed on Wednesday that the country's fiscal revenue reached 4.8 trillion yuan ($651 billion) in the first 11 months, up 33.5 percent year-on-year, and is expected to hit 5.1 trillion yuan for the whole year, 31 percent more than in 2006.
Growing fiscal revenues have allowed the government to increase spending on public welfare programs. Statistics show that central and local fiscal spending on healthcare increased by 40.6 percent during the January-November period. Spending on education grew by 32.7 percent, and social security and employment outlays increased by 28.6 percent.
Such rises in government expenditure on public welfare, on their own, may appear spectacular. Yet, they seem to be simply keeping pace with the growth in fiscal revenue this year.
In view of the huge gap between the people's need for such services and the inadequate supply, these increases remain far from sufficient. To significantly raise people's living standards, the government should resolve itself to further tilting its fiscal policy in favor of public services.
On one hand, more fiscal support for education, healthcare and social security will directly improve people's wellbeing and thus facilitate the development of a harmonious society. After all, the ultimate goal of economic growth is to improve people's lives.
On the other hand, a people-first fiscal policy will free consumers from the huge health and education burdens that have so far prevented them from consuming enough to drive economic growth.
There is no doubt that China can no longer rely on investments and exports for growth. A fundamental change in the country's growth pattern will depend on whether the country can effectively boost domestic consumption.
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