CHINA will spend over 18 percent more on education, social security and building budget homes this year to improve the daily lives of its people, Finance Minister Xie Xuren said yesterday in Beijing.

The country will continue its proactive fiscal policy and push tax reform to ease the financial burden of low-income earners, Xie said during the China Development Forum 2011 held in Beijing yesterday.

The central government's budget for education, health care, social security, employment, budget homes and culture will total 1.05 trillion yuan (US$159.2 billion) this year, an annual rise of 18.1 percent, according to Xie.

"China will spend two thirds of its central budget on improving people's livelihoods if one takes into account other sectors like agriculture infrastructure construction, water conservation, public transportation and environment protection," Xie said.

The central government's budget totalled 5.436 trillion yuan this year, a rise of 12.5 percent from last year's.

China will continue with its proactive fiscal and sound monetary policy and also encourage tax reform, Xie said.

The State Council, or Cabinet, may raise the minimum income threshold for personal income tax and adjust tax rates, although it didn't reveal an official timetable for the changes or details.

Recent media reports said the minimum threshold may be raised to 3,000 yuan or even more from 2,000 yuan.

"It's a long-term national strategy to lift domestic consumption," Zhang Ping, head of the National Development and Reform Commission said at the forum.