Working Day

10 december, 2009 22:00

Prime Minister Vladimir Putin chaired a meeting of the Government Presidium

Prime Minister Vladimir Putin chaired a meeting of the Government Presidium
“As you know, there were many questions about maternity funds during my televised question and answer session with the public, as well as many suggestions for changing how these funds can be spent.”
Vladimir Putin
At a meeting of the Government Presidium

Transcript of the beginning of the meeting:

Vladimir Putin: Good afternoon, ladies and gentlemen. Let's start with some important information.

Mr Kudrin, please say a few words about the changes in the budget deficit.

Alexei Kudrin: The 2009 federal budget period is coming to a close. When we were revising the budget deficit in February - April before submitting it to the State Duma, we planned it proceeding from a deficit of 8.3%.

Now, due to higher oil prices (we made our calculations based on a price of $41 per barrel, and the year's average is now slightly above $60), and the fact that we have didn't use some of the funds we had allocated for bank capitalisation, we think the deficit will be 6.9%.

If we take into account subordinated loans to VEB and other Russian banks in order to increase their capitalisation, then the deficit will be 7.3% taking into account quasi-fiscal measures and provided all ministries stay within their budget. That is our forecast.

Vladimir Putin: Good. As you know, there were many questions about maternity funds during my televised question and answer session with the public, as well as many suggestions for changing how these funds can be spent.

We recently agreed on a set of rules allowing recipients to spend a part of their maternity funds to improve their accommodations. I signed these rules. Mr Zhukov, please comment.

Alexander Zhukov: The law on additional support for multiple-child families was adopted three years ago. Beneficiaries-the families whose second or third child was born three years ago-will have the right to spend their maternal capital in full after January 21.

The initial capital was 250,000 roubles. Now, after several indexations, it is 343,378 roubles.

Vladimir Putin: It was 317,000 at the beginning of the year, if I am not mistaken.

Alexander Zhukov: That's right. As of January 1, it will be 343,000 roubles. As a part of the anti-crisis programme we decided to authorise the spending of maternal funds on mortgages, even before our previous deadline. The money can be spent on mortgage principals and interest payments alike. We have also authorised 12,000-rouble one-time grants at the expense of the maternity funds.

Both measures have proven very successful this year. As of December 4, the Pension Fund has approved 92,000 applications, worth a total of 23 billion roubles, to use maternity funds to pay for principals and interest rates on mortgages.

Also, 1,089,000 people have received 12,000-rouble one-time grants, for a total of 13 billion roubles.

Moreover, parents will be able to use the maternity funds for other purposes after January 1, for example on education and pension's funded component, as well as on housing. We have set aside 102 billion roubles in the budget for this purpose. The Pension Fund expects 356,000 relevant applications in 2010. At present, there really have been many requests, both during the televised Q&A and to the Government, about expanding what the maternity capital can be used for.

In particular, a resolution will be signed authorising not only holders of maternity fund certificates (mothers in most instances, but occasionally fathers) but also the holder's spouse to use maternity funds on purchasing or building housing. There were many requests on this score.

It has also become possible to spend maternity funds on loans taken out to build individual homes during construction, and not just after construction is finished, as was the case previously.

And while this year maternity funds could be spent only on paying mortgages, after January 1 people will also be able to spend them to buy a flat or build a private house.

Vladimir Putin: Good. Now, let's talk about federal budget transfers to make up for the deficit in the Social Insurance Fund.

Alexander Zhukov: Yes, Mr Putin, we propose transferring the 15.5 billion roubles ($506 million) of the 2009 budget allocations initially meant for anti-crisis assistance to banks, to the Social Insurance Fund.

These funds will be used first of all to cover spending on childbirth and additional spending on disability allowances. The crisis has influenced the situation, as more people with a higher pay, such as company heads, were on sick leaves this year, which increased these expenditures, as well as mothers with children aged up to 18 months. This is why we have decided to allocate 15.5 billion roubles for these social projects.

Vladimir Putin: Good. Mr Shuvalov (First Deputy Prime Minister Igor Shuvalov), I know that you have prepared a decision on additional assistance to AvtoVAZ.

Igor Shuvalov: Mr Putin, this decision is connected with the programme on the development of the automobile industry we are drafting on your instruction in the Government. We think the coordinated programme will be submitted to the Government in the first quarter of 2010.

When preparing to implement that programme, we worked jointly with all major automakers and analysed their financial situation in 2009. Each company submitted to us a programme for cutting expenditures; we discussed their financial situation at meetings of the commission. It was decided in 2009 to support such major producers as KamAZ, Sollers and GAZ, and to issue state guarantees. These decisions were made in addition to your decisions regarding allocations to encourage state demand for the products made at these plants.

We have decided to recommend that you approve a decision to allocate 12 billion roubles ($391.8 million) to state corporation Russian Technologies, which is a beneficiary of AvtoVAZ, for subsequent issue of the funds in the form of an interest-free loan for settlements with components producers and creditor banks, including state-run banks. The objective is to help AvtoVAZ end the year without financial losses.

We think that the 12 billion roubles can be subsequently used to increase the share capital of AvtoVAZ. In this way Russian Technologies will increase its stake in AvtoVAZ capital. We also expect other shareholders to make commensurate contributions in the form of technology or cash to ensure technical modernisation of AvtoVAZ.

The allocation of other funds about which we have reported to you, the additional funds needed for the financial rehabilitation of AvtoVAZ, should be tied to final modernisation decisions and the obligations assumed by its other shareholders, including Renault-Nissan. We will submit these decisions to you for coordination later.

Currently, we believe that this issue has been coordinated, and it will help banks because creditors wonder if the debts will be repaid. We need to provide additional working capital to AvtoVAZ, whose position will improve considerably thanks to this decision.

Vladimir Putin: Good. The instruction on the allocation of an additional 12 billion roubles of assistance to AvtoVAZ will be issued today.

Two instructions on assistance to the United Aircraft Corporation (UAC) and allocations to the production of new equipment, including aircraft, worth 45.2 billion roubles ($1.5 billion) and 13.5 billion roubles ($440.7 million), have been signed today.

Mr Ivanov (Deputy Prime Minister Sergei Ivanov), could you comment on that, please?

Sergei Ivanov: Indeed, Mr Putin, the instructions have been signed. These two instructions concern the United Aircraft Corporation.

I would like to focus first of all on the instruction to contribute 13.587 million roubles to the share capital of OJSC UAC for the manufacture of a series of civil aircraft and planes for state airlines.

The UAC has received a package of orders forming its production portfolio until 2014. It includes the manufacture of 27 Tu-204SM civil aircraft (at the Voronezh and Ulyanovsk plants), 57 An-148 civil aircraft (their mass production has begun only recently, but GTK Rossiya has already bought the first plane), and 30 Be-200 amphibious aircraft, which will be produced at the Taganrog plant.

In other words, the UAC has received financial assistance for starting mass production of these types of civil and specialised aircraft.

As for the second instruction, we discussed it, as well as the above instruction, at the Government Commission chaired by Mr Shuvalov.

We have discussed the UAC's loan portfolio, which currently amounts to 162 billion roubles ($5.3 billion). Of that amount, the 31.7 billion roubles you mentioned when speaking about the second instruction will be used to repay the UAC's matured loans to banks. Another 7.7 billion roubles ($251.4 million) will be Russia's contribution through Vnesheconombank to paying and subsidising interest on the UAC's loans made to ease its debt burden.

However, the UAC is servicing the bulk of its debts to the bank, as much as 100 billion roubles ($3.3 billion), and it is capable of doing this independently. This allows the corporation to feel more secure financially.

I have already reported to you that the lengthy period of reincorporation of state-held assets at all aircraft manufacturing plants into joint-stock companies has ended. The formation of the UAC is complete, and its shares have been listed, although in a limited amount, at stock exchanges.

Vladimir Putin: Two more instructions will be issued today to support the Omsk engine-building association and the Zvyozdochka ship-repair plant.

Sergei Ivanov: Yes, these instructions specifically approve assistance to the Baranov research and production association, which has been incorporated into the larger Khrunichev holding company by presidential decree. The Baranov association in Omsk will receive 568 million roubles ($18.5 million) of state assistance.

As for Zvyozdochka, a ship-repair plant in Severodvinsk, it will be additionally allocated 495 million roubles ($16.2 million). This is practical assistance to the real economy sectors.

Vladimir Putin: Do you think this assistance is timely and will be effective?

Sergei Ivanov: Yes, we have considered everything at the commission meetings.

Vladimir Putin: Good. A conference on the management and development of special economic zones was held on December 9. Ms Nabiullina (Elvira Nabiullina, Minister of Economic Development), you have the floor.

Elvira Nabiullina: Yesterday I chaired a meeting at Dubna, in a technology promotion zone, on special economic zones in Russia. It was attended by 40 resident investors. In all zones they total 207. There were also representatives from federal and regional agencies, as well as from our development institutions, Vnesheconombank, Rosnano, Russian Venture Company and other large investment banks.

The discussion focused on how to improve technology zone management, especially following the decisions to adopt simpler controls so that zone residents can take on greater management responsibility. We also discussed ways to minimize administrative procedures, particularly to simplify customs rules in the zones, plans to provide required infrastructure, and, more significantly, the financing of high tech and innovation projects.

Zone residents also raised the issue of creating a favourable social environment in the zones. This is particularly important in technology promotion zones. Now to housing construction there. The amendments to the law currently being considered by the State Duma also provide for housing to be built adjacent to a zone. The point is that as many of the companies begin to function in these zones and export and import products, some problems arise. We and the Federal Customs Service have agreed to set up a special task group to make on-the-spot decisions.

But perhaps what is most important is the financing of projects that are beginning to be implemented in the zones. It was agreed that our development institutions will take part in selecting the projects to be implemented so that these could have good prospects. We need to support such projects all along the line.

We agreed to hold such meetings regularly to develop these zones, as we planned, instruments for applying innovation and high-tech projects revolving around economic diversification in practice.

Vladimir Putin: Good. Once again I am forced to begin a meeting with two terrible tragedies: the terrorist attack on the Nevsky Express and the fire in Perm. Doctors are now struggling for the lives of the victims. Today we will have to decide on support for the families that suffered and render them financial aid. Again, today we must adopt an appropriate decision.

But before doing that I would like to make the following point. In the case of the Nevsky Express, we of course had a premeditated crime. Here it is the duty of the security service and law enforcement bodies to find and render harmless the criminals.

On the other hand, the fire in Perm, which had even greater consequences, was the result of irresponsibility. The Perm tragedy, I have said this in public and want to repeat it, fully mirrors the vices of our bureaucracy: its incompetence, its corruption and its merger with business where it is not necessary and must not be merged.

The tenants built an unauthorised attachment to a building, naturally violating building codes and other regulations, with no response from federal or regional officials: All this with Rosimushchestvo (Federal Agency for State Property Management) literally next door. Other monitoring services are also nearby - all in the city centre.

The club, where hundreds of people gathered, had only one public exit and had all its windows tightly sealed, despite documents describing huge stained glass panels. Fire supervision authorities issued only formal notices. Authorization to do business was issued to the club by a person who had since quit his job in a fire supervision body. Other officials did not bother to follow through.

Where were the officials of Rospotrebnadzor (Russian Agency for Health and Consumer Rights) who are so fond of justifying their frequent inspections with a sincere care of consumers' interests? According to the permits, the premises are designed to hold 50 people, while the real numbers admitted occasionally reached 400. No one paid any attention to these problems.

And what did BTI (Technical Inventory Bureau) do? It just knowingly signed forged documents. Is it possible they did not know? They knew. And what did architectural and building inspectors do? Municipal authorities? Why did they all shut their eyes to all of this?

Some officials from the departments I mentioned have been fired, or relieved of their posts.

We must be straightforward: a tragedy like Perm could have happened anywhere, in any Russian city. To remove this threat, we need systemic decisions. We must make a detailed review of our legislation and, if necessary, amend it.

But what is most important is to bring order to the supervisory bodies and services themselves. It is not that officials lack rights. Monitoring services have enough authority. It's just that nobody made sufficient use of these rights. Not a single body. Not a single official. This is what I want to emphasise.

I do not want to cite the sad statistics of the past two or three years. They are well known; you can take a look at them.

Inspections in general - if we are to discuss them at all - must not be too many or too few, they must be as many as necessary. And they must be carried out where there is a real threat to health and life.

I instruct all ministries and departments to inspect their monitoring and supervisory bodies and set things straight with their own efforts, without waiting for prosecutors to show up.

Now regarding changes in legislation. We have still done nothing to regulate many safety rules and requirements and coordinate them under one system. Please review this matter and report on it later.

We need amendments that enhance criminal penalties on officials for omissions in state monitoring and supervision, especially for the improper performance of their duties, which may lead to tragedy or death.

Of course, we must also increase responsibility of business. Negligence, breach of safety codes, deliberately ignoring instructions from monitoring authorities must result in harsh administrative or criminal sanctions.

Next we must develop economic mechanisms to encourage business to spend liberally on safety. One thing, above all, is mandatory liability insurance; this is widespread in the world.

And, of course, the state and our companies, infrastructure companies and partly state-owned companies must invest in safety.

Our agenda today has an item on a Russian Railways investment programme for 2010. It totals 271 billion roubles. Let me point out that this year it amounts to 250.2 billion roubles, meaning next year will see an increase.

And, of course, we should consider security. The programme provides 450 million roubles for counterterror measures and 426.5 million roubles for fire prevention. Traffic safety will claim another 2.5 billion roubles. I think this proportion should be kept. At any rate, we must plan for such expenses today.

Now I wish to dwell on one more item on the agenda. It is unemployment and our plans to curb it.

In 2009, we have generally managed to free up the jobs market. Our efforts had a positive impact after all, though not in every area. Regional programmes involved almost 2,200,000 people, who were facing joblessness because of the crisis or sackings. People were given real help when they most needed it.

Of course, we are aware that many people are questioning the quality of these jobs, and rightly so. But, again, this was a makeshift decision, taken at the time of a sharp economic crisis. In this context, we decided to carry on with our anti-crisis measures and support the jobs market in 2010. We are allocating 36.3 billion roubles for these purposes.

Our employment programmes will shift their focus now that the economic situation has changed. The goal of a flexible and effective jobs market will come to the fore. People should get a chance to retrain or improve their skills.

More incentives should be given to people to start their own business. This year new businessmen are being paid a lump sum grant of 58,800 roubles. Incidentally, many have taken advantage of this measure, even though it is a bureaucratic and time consuming process. But still there have been those who benefitted from this opportunity.

In 2010, the grant will be doubled, true, on condition that a new business creates a job not only for the owner, but also for at least one other person whose job became redundant.

Additional support measures are stipulated for school graduates, people with disabilities. A job created for a disabled person entitles the employer to a subsidy of 30,000 roubles. College and university graduates will be afforded extended training periods at factories and plants with pay, enabling them to gain practical experience.

Lastly, single-industry cities and other areas with a poor employment outlook will have special integrated programmes drawn up. The first such programme - to take on the problems of Togliatti and the AvtoVAZ staff - has already been adopted.

Let's get to work.


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