Fair share of the cake
Updated: 2011-12-30 08:12
The central authority's attitude is clear, "both primary distribution and redistribution, especially the latter, should balance efficiency and fairness."
Income distribution reform should be deepened to increase residents' share of the national output and workers' share of the primary distribution of wealth, Zhang Ping, minister of the National Development and Reform Commission, said in his report to the Standing Committee of the National People's Congress on Wednesday.
However, similar voices have been heard more than once before in government work reports and unfortunately little progress has been made.
Statistics show that since 1996 income distribution has been skewed to governments and enterprises.
Even though the Party emphasized at its 17th National Congress in 2007 that worker's income should take a larger share of the GDP, the statistics show that in 2010 the rate of growth for wages was still slower than that of enterprise profits and government revenue.
It is reasonable that the primary distribution attaches importance to efficiency, but that does not mean fairness should be ignored.
That the workers' share of the primary distribution is too low is the main cause of China's widening wealth gap, and residents' inadequate share of the national output results in low consumption and high investment.
Adjusting income distribution relations properly is the necessary and imminent requirement for boosting consumption and promoting stable and sustainable economic development.
So the government should change the primary distribution's bias toward enterprises and governments. If the fairness problem of the primary distribution is not addressed, it will impose too much pressure on the redistribution of social wealth.
The ideal distribution includes not only the reasonable distribution of wealth between the State and residents, but also its rational distribution among the people.
But how to make tax an effective way to ameliorate income distribution remains a difficult task for the authorities.
Undoubtedly, the government's current financial resources have enough space for tax cuts, which would also provide an opportunity for the transformation of China's industrial and social structure, benefiting the country's sustainable development in the long run.
The government should also build up a long-term mechanism to ensure workers' wages grow in accordance with enterprises' growth in profits. To realize this an effective trade union system is crucial to promote workers' collective bargaining ability and protect their rights.