A Chinese government report handed to legislators Friday promised effective measures to smooth the redistribution of social wealth by increasing the income of rural and needy people and reforming the tax system.

The government expects to raise farmers' income by increasing the minimum purchasing price of farm produce offered by the state reserve, according to the report, submitted by the National Development and Reform Commission at the bimonthly session of the National People's Congress (NPC) Standing Committee.

In 2010, the minimum purchasing price for every 50 kg of wheat will be raised by 3 yuan (0.44 U.S. dollars) and that for rice will also be raised accordingly, said the report.

The policy on rice is under discussion and will be issued before the new seeding season, which usually lasts from March to early May, the report said.

The government will also provide subsidies for farmers to buy new farming equipment and offer more loans to rural people, it said.

Several measures were announced to improve needy people's lives.

This year more assistance will be provided to families without a bread-winner, the report said.

Moreover, workers who lose their jobs because of their employers' difficult financial situation will also receive more assistance, the report added.

The government will also raise living subsidies in both rural and urban areas based on the economic situation and consumer prices.

This year the government will strengthen inspection of minimum wage for enterprise employees and urge more private companies to set up salary negotiation mechanisms between employers and employees, the report said.

China's labor law allows employees of a company to select representatives who will negotiate salary arrangements with representatives of employers. Through such negotiations, the two sides will reach a collective contract. Considered as an effective way to protect workers' interests, the mechanism is not yet widely adopted by Chinese employers.

The report also said the government will further reform tax policies, though no details were given.

There has been calls to raise the personal income tax-free threshold as living expenses have soared amid currency inflation. Currently, China taxes a person once their monthly income reaches 2,000 yuan (290 dollars).

The government will also tighten supervision of company benefits.

State-owned utility companies, such as telecom firms and power, water and gas companies, will be banned from providing free or preferential services to their employees, the report said.