VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
Transcript of the beginning of the meeting:
Vladimir Putin: Good afternoon.
The first consultations on drafting the 2010 budget and setting targets for 2011-2012 opened on July 27. We have been holding such consultations regularly for the past several years and they have proved their effectiveness.
I would like the Speakers of both houses of Parliament to join the present consultations from the start. It will be a hard job because of the difficult situation in the world and national economy. We have discussed them many times before.
Despite the fall in revenues we have had across the board, we have promised and agreed to retain our main social goals and meet all previously set targets.
We have analysed work on the national projects today and have formulated our goals, which means we have to retain the preset rate of funding at this year's level, and even increase it slightly, despite the crisis. In the process, regrettably, we are going to come across problems caused by the deficit. And here our actions must be as responsible as possible. We must not upset national macroeconomic stability.
We must create every condition for overcoming the crisis and set up a reliable basis for further economic development. That is what we should proceed from in final decision-making.
We have to renounce all minor goals of this and next year, everything that is not of primary importance.
No other country in the world would increase welfare grants during a crisis, let alone launch an ambitious pension reform. However, we set these goals a long time ago, and we intend now to implement all previous plans despite the difficulties.
This imposes certain limitations connected to budget expenditures in other areas. We have a number of top national priorities in the sphere of economic diversification, innovation, defence and security.
We are facing a hard and extremely responsible job. It demands the utmost efficiency and close contacts between the Government, the State Duma and the Federation Council.
Mr Kudrin has the floor. As Finance Minister and Deputy Prime Minister, he will inform us about the start of the consultations, and about the main trends in drafting the budget.
Alexei Kudrin: Mr Putin, colleagues,
On July 27, we opened consultations with an ad hoc team established by the United Russia party. It represents the Just Russia party and the budget committees of both houses of Parliament as the principal bodies usually taking part in discussions on all relevant matters. We will later meet with all parliamentary groups and listen to their opinions.
We have taken stock of issues posed by members of Parliament at the first meeting. A meeting was held at the Agriculture Ministry, with Minister Skrynnik chairing. Health and Social Development Minister Tatyana Golikova chaired a meeting on social development at her Ministry. I chaired several meetings on inter-budget relations within the country and on road construction, with an emphasis on allocations to regions. Federal Road Agency head Anatoly Chabunin also took part in them.
Yesterday, we drew up preliminary conclusions on the basis of those meetings, and specified the agenda with an emphasis on questions in need of verification and updating, or implying budgetary amendments to be submitted to the State Duma even while the Government is still considering the draft budget.
Vladimir Putin: Are there any differences of opinion we need to address?
Alexei Kudrin: The number of items we have worked on is too small to speak about any visible differences. We have not taken stock of the whole agenda yet-first of all, the amount and distribution of federal allocations to the regions for the construction of regional highways. All previous budgets envisaged such allocations.
Vladimir Putin: Even though such construction projects belong to the regions' own responsibilities?
Alexei Kudrin: This is entirely their responsibility. More than that, even before the crisis we intended to change those principles next year, due to a programme to be launched in 2010. It envisages modernising the entire Russian transport system, with certain changes of funding patterns-in particular, greater discrimination in financing the construction of cloverleaves connecting regional and federal highways. The programme also envisages aid to regions in building bridges and the busiest stretches of roads, and in road maintenance in large cities, with their heavy traffic. We have also discussed the amount of federal highway maintenance. Major improvements are necessary as some federal highways are in poor condition.
Vladimir Putin: That's putting it mildly.
Alexei Kudrin: The programme envisages that road construction and maintenance costs will skyrocket eventually, and we cannot afford that during the crisis. We have not buried the issue, however, and intend to come back to it later.
There are two key issues in agriculture-grain purchasing interventions and acquisition of mineral fertiliser. In this case, the Government has cut relevant allocations.
We intend also to reconsider aid to areas affected by drought this year. Mr Putin, we are working on your instructions, which often coincide with requests from members of Parliament.
Many Russian regions are increasing property tax rates. It is an inevitable step. Regions have the right to increase their revenues, including by taking stricter stock of taxable property and registering its market value.
This concerns federal agencies, too. We should earmark sufficient allocations to them, or they will not afford full tax payments.
There are disputable issues in regions' inter-budget relations with the federal centre, the amount of transfers, and methods of assessing taxable capacity, which is evaluated on the basis of the previous three years. The crisis has changed this capacity dramatically, so the past three years do not reflect what we will have in the next two years. We are willing to make necessary adjustments, and will discuss relevant proposals within a few weeks.
We have agreed for the Ministries of Agriculture, Social Development, Finance and Transport to cooperate on those issues. As for road construction, an ad hoc team will be established to represent interested parliamentary groups, and relevant committees in the State Duma and the Federation Council.
We have set our deadline for September 3 to be ready with initiatives on the entire range of issues I have mentioned (the same concerns the ad hoc team) because a subcommission of the Government Budget Commission will start work on September 3 to reconsider the problems according to the procedure, and summarise proposals put forward by that date.
So, I think, we will come to a consensus as much as possible before we submit our proposals to the Government and the State Duma to take into account the public concerns which reach members of Parliament in their constituencies, and which they voice.
Vladimir Putin: Are there any remarks or suggestions on the organisation of the Government cooperation with the Federal Assembly-the State Duma and the Federation Council-regarding next year's budget?
Boris Gryzlov: We have an ad hoc team. Oleg Morozov, my first deputy, heads it on the Duma's behalf. The team met twice, last time on August 7, and discussed the agenda in great detail. We put forward new ideas-in particular, on issuing loans to regions, and on highway construction and maintenance. We proposed extending the term of the loans from three to five years because longer terms make expenditures more effective. The idea is under discussion now.
As for issues connected with agriculture, United Russia has done a great deal to promote them. A law and a national programme in support of farming have been adopted. We want the basic programme indices to remain on the present level in the 2010 budget.
The draft budget must be submitted to the State Duma no later than October 1. We have drawn a schedule for all stages of the process. We will certainly meet the deadline and submit the budget law to the Federation Council in time after the State Duma has debated and passes it.
Vladimir Putin: Thank you.
Sergei Mironov: Mt Putin, Yevgeny Bushmin, chairman of the Budget Committee, is a member of our ad hoc team. Our house represents the regions' interests, so we are naturally alarmed to see the regions cutting social expenditures due to shrinking fiscal revenues-something you object to. These cuts are evident in the present budget.
But we are realistic, and we see that the regions will not be able to make both ends meet unless they have federal allocations. This is an essential matter for the Federation Council, which represents regional interests. Mr Kudrin has drawn attention to inter-budget relations between the centre and the regions just now.
The Just Russia party objects to cuts on welfare expenditures. Here, its position coincides with the Government's and with your personal views. True, we should cut our coat according to our cloth-but people who are experiencing financial hardship in these difficult times should at least feel that the Government has not abandoned them. The point concerns especially the disabled, pensioners and low-income people.
So we are going to be closely involved in the work with the Finance Ministry. We will monitor it closely. When the budget draft is submitted to the State Duma, the Just Russia parliamentary group will draw proposals for its second reading.
You have asked about work organisation. We have been working together smoothly. That has been the case for several years. What we describe as "reconciliation readings" starts at an early stage of the work on bills. This meeting is part of the work, so everything is clear where the organisation of budget work is concerned.
Vladimir Putin: As you know, we intended initially to keep next year's budget deficit under 5-5.5%. However, there are low-income population groups who need support-pensioners, disabled persons, and others. There are also commitments to some economic sectors-in particular, the state-financed ones, which we must keep. There are also pivotal national priorities-defence, security, the innovation economy, which also need support. So we have deemed it necessary to raise the budget deficit to 7.5%.
However, we should lower that ceiling in 2011-2012. We must be careful with our reserves and meet our targets if we want to be responsible in our social and economic policy.
The world market prices on traditional Russian exports are not sliding down. They have even been rising slightly. We see certain positive trends in the world and European economy, and we expect them to have a beneficial effect on Russia. But even when we are hopeful, we should not be overly optimistic. Our plans need to be realistic and circumspect. Please don't forget that when you draft the budget.
7.5% is the highest permissible deficit. If the Government, the Finance Ministry or any other agency, or State Duma or Federation Council members think priorities should be shifted in the budget draft submitted by the Government, it should be done not by increasing the deficit but through redistribution of expenditures. Setting priorities is an essential part of our joint efforts.
