The situation has reached a point where the Government is working on a major plan to issue US$3 billion worth of sovereign bonds on international capital markets in 2017 to raise funds for restructuring domestic debt.

Under such circumstances, tight-fisted austerity should be the norm. However, free-wheeling spending seems to be as usual, especially at state agencies. Local media reports have revealed state agencies are using a hefty number of autos, which in turn require a huge amount of money to keep them running.

This has led the Ministry of Finance to propose a new regulation restricting the use of public automobiles by state officials to reduce the growing budget burden. The proposed rule is awaiting the Prime Minister’s approval.

Tran Duc Thang, head of the Department of Public Asset Management under the Ministry of Finance, said at a recent media conference that there are currently 40,000 state-owned cars in use in the country. If the cars at State-owned enterprises are taken into account as well, the number would be far bigger.

To keep the 40,000 vehicles on the road, nearly VND12.8 trillion (US$575 million) is annually spent to pay for drivers, fuel bills and maintenance services, or VND320 million per car per year, Thang is quoted by Tuoi Tre newspaper as saying.

State agencies were barred from acquiring new cars under the central Government’s resolution on the 2014 national budget. Nonetheless, in August 2014, Prime Minister Nguyen Tan Dung ordered the Finance Ministry to loosen the ban on auto purchases as new agencies and those with damaged or destroyed vehicles needed cars.

The huge annual spend on auto operations at state agencies is a big shock to the public. Speaking at a discussion among lawmakers at the National Assembly session, Minister of Planning and Investment Bui Quang Vinh revealed the month of truth, saying the Government has only VND45 trillion at its disposal. Many legislators have urged the Government to cut administrative spending amid bleak forecasts of budget revenues next year.

Economist Le Dang Doanh says on bizlive.vn that operating these public cars has exceeded what the economy can endure. The poor management of the State budget is the main reason behind the rampant purchases of vehicles by state agencies. As a result, the public cars have become a huge burden for taxpayers, Doanh says.

As reported by VTC News, expert Ngo Tri Long says there is a lot at stake for the State budget, which is evident in rising budget deficit and public debt. Therefore, the use of public cars must be put under control.

“I think that the current use of public cars is not effective. Spending on cars and car maintenance is excessive. We must resolve the problem right now to save the budget,” he says.

The Finance Ministry has recently passed draft Decision 32 to the Prime Minister for approval in an effort to deal with the problem. The decision, which includes a new regulation setting a quota of public cars at state administrative agencies and specifying how they should be used, aims to cap the number of public vehicles.

Specifically, if the decision comes out, public cars can only be replaced after 15 years of use instead of 10 years as stipulated in the current regulations, or after their mileage reaches 250,000 kilometers or above. And each state agency could have two cars at most.

Leaders of cities and provinces would have to check the number of public vehicles at such agencies, and ensure the efficient use of vehicles.

Thang says in Tuoi Tre that the forthcoming regulation also stipulates who are entitled to use public cars. Directors of city/provincial departments, except those in Hanoi and HCMC, might not be allowed to use public cars to travel between home and office.

Thang expects that the new decision would cut the number of automobiles by 7,000 units, and save around VND500 billion (US$21.6 million) per year. Thus, the budget burden could be lessened, which would eventually benefit taxpayers.

Source: SGT