Minister of Finance gives reason for 'one quadrillion dong of treasury deposited in bank'

Slow disbursement of public investment forces the state budget to deposit money in banks with low interest rates, according to Finance Minister Ho Duc Phoc.

Discussing at the socio-economic group on May 25, Mr. Ha Sy Dong, Standing Vice Chairman of Quang Tri Province, raised the issue of the national treasury backlog. According to him, the state treasury surplus currently deposited in the banking system has exceeded one million billion VND.

"This is a painful problem when our country is still poor, always lacking capital for investment and development but facing a paradox of having money in our pockets but not being able to spend it," said the Vice Chairman of Quang Tri province.

He likened this to a "blood clot" that blocks the flow of money in the economy. Because the tax and fee money that businesses and people pay to the State Treasury is "put on hold" at the State Bank and cannot return to the economy due to the blockage in the public investment disbursement channel.

Sharing on the sidelines of the National Assembly, Finance Minister Ho Duc Phoc acknowledged this situation. "Due to the congestion of public investment disbursement, the Ministry of Finance has to deposit the treasury funds at the State Bank, with an interest rate of 0.8% per year," Mr. Phoc told VnExpress .

Finance Minister Ho Duc Phoc shared on the sidelines of the National Assembly on May 25. Photo: Anh Minh — Finance Minister Ho Duc Phoc shared on the sidelines of the National Assembly on May 25. Photo: *Anh Minh*

Public investment - which is considered the driving force for private investment development - is currently disbursed very low. According to the Ministry of Finance's report, the disbursement rate of public investment capital in the first 4 months reached nearly 14.7% of the annual plan. This level only reached nearly 15.7% of the plan assigned by the Prime Minister and was lower than the same period in 2022 (18.48%).

According to the Law on Public Investment, new projects are allocated money, but if the project preparation stage is "stuck", it will lead to the next stages, such as capital disbursement not being implemented.

Mr. Phoc analyzed that basic construction includes three stages: investment preparation (project establishment, technical design, project establishment, bidding, bidding, site clearance); investment implementation and settlement.

The most difficult part is investment preparation. The project is approved before compensation for site clearance - which is slow, so the investment preparation time is prolonged. This is also the reason leading to the situation of "capital waiting for the project to complete procedures", causing the amount of money prepared for disbursement and settlement to be stuck.

In the context of economic difficulties, aggregate demand (social consumption, private investment) decreases, according to the Minister of Finance, there needs to be a solution to increase aggregate demand to stimulate the economy. Accordingly, if public investment is disbursed, it will promote the socio-economy, the industries that benefit and lead private investment.

"The law must be amended. One law can be used to amend many laws, including amending the Law on Public Investment to overcome this situation," said Mr. Phuc.

The current mechanism allows the State Treasury to optimize temporarily idle capital, but Mr. Ha Sy Dong raised the issue of poor coordination between fiscal and monetary policies.

Similarly, Mr. Hoang Van Cuong, Vice Principal of the National Economics University, the Finance and Budget Committee said "we are very concerned that there is money in the budget but it cannot be spent due to the blockage of public capital disbursement".

Giving his opinion, Mr. Nguyen Dai Thang, Deputy Head of the specialized delegation of Hung Yen province, suggested that the Government should have more fundamental solutions to remove difficulties and bottlenecks, enhance the responsibility of leaders in disbursing public investment capital and transfer capital from places with slow disbursement to places in need of capital and better disbursement.

Mr. Hoang Van Cuong said that the Government needs to have stronger solutions, such as transferring and handling officials who do not fulfill their duties. "If we only handle it with administrative measures, it will be difficult to solve the current situation, because the fear and anxiety in performing public duties is widespread," he said.

On the contrary, Mr. Cuong said that there is also a need for a mechanism to protect cadres who dare to think, dare to do, dare to overcome barriers for work goals and common interests so as not to be accused of wrongdoing.

"I think it is very necessary to have a resolution of the National Assembly allowing law enforcement agencies to act within the framework, to protect officials who dare to think and dare to do," he concluded.

Hoai Thu

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