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
“We are entering a very important period of forming the 2013-2015 budget. The priorities that we will put into it will determine the quality of life of our people, as well as economic and social growth. As a matter of fact, the budget for the next three years will become the financial basis for the strategic programme that we proposed to our society and that was approved by millions.”
“One of the most important goals of the federal budget over the next three years will be ensuring the country’s post-crisis development, creating conditions to modernise the Russian economy, building a stable infrastructure and improving Russia’s defence capabilities and security.”
“If we do not want to sequester the budget tomorrow, as some developed market economies are currently doing, which would deprive people of the most necessary things, would require us to take painful measures and to reject those citizens who are entitled to government support – if we do not want to do this, we should not inflate our spending today. We need to be very careful about this.”
“When we began to draft the federal budget, we decided that it should be a development-oriented budget. We therefore prioritised government spending for the years to come. Our top priorities will be future-oriented research, introducing innovations, infrastructure support to boost economic growth, and promoting small and medium-sized businesses. Certainly, we will focus on investments in development and in the wellbeing of Russian families. The state will meet all of its social obligations to the nation.”
“The balance between revenues and spending remains the top priority in federal finances. We will have a deficit-free budget this year even, despite our cautious projections at the start of the year. We expect this year’s federal revenues and expenditures to be around 11 trillion roubles each. The Russian economy is projected to fully overcome the consequences of the economic downturn by the beginning of next year and to continue to grow, providing stable revenues to the federal treasury.”
“The economic background was positive during these months. Russia’s GDP was up 3.9% as compared to the same period last year. The inflation rate was 5% during the first six months. <…> Russia’s trade surplus increased. Russian exports exceeded imports by $101.7 billion over the first six months of 2011. <…> Real wages are also up 2.4% in Russia. The unemployment rate is down to 7% from 8.1% in the first six months of 2010. The federal budget performance results have exceeded our expectations”.
"By expanding access to opportunities for work and increasing the mobility of disabled people, the state is in no way relieving itself of its commitment to provide them with comprehensive support <…>. We have increased disability pensions by 8.8% since February 1, and social benefits by 10.3% since April 1."
"I haven’t the slightest doubt that we will regain the pre-crisis level by the end of this year or the middle of next year, and come close to a balanced budget. The Finance Ministry forecasts a budget deficit for another several years, proceeding from objective factors. However, I have every reason to think that we will put an end to it sooner and increase funding. This is a passing problem".
“Starting in 2013, most federal allocations will be distributed among specific targeted programmes. Budgetary funds will be channelled into government programmes in sectors crucial to our national development. I want to stress that we do not have in mind a formal redistribution of funds. The idea is to rethink the principles guiding government agencies’ work in order for them to perform their duties more responsibly, as well as to ensure that monetary allocations, along with regulatory mechanisms, taxes and customs duties, produce the desired results.”
“We have to accomplish a number of highly important objectives in the sphere of defence and law enforcement. Interior Ministry divisions will be financed completely from the federal budget starting with 2012. <…> Pay grades will be raised in two stages. First, this raise will encompass Defence Ministry military personnel, Interior Troops and Interior Ministry operatives. The pay grades of other security agencies personnel will be raised subsequently. Retired military personnel will see a one-time increase in pensions in 2012, regardless of their departmental affiliation.”
“We plan to increase federal budget allocations to healthcare. We will allocate 500 billion roubles for this purpose in 2012, which is nearly 7% more than this year. <…> We will also continue to increase maternity capital. We will index it, just as we planned to do when we first introduced this allowance. Maternity capital currently stands at 365,700 roubles; it will be increased to 430,000 in 2014. <…> In 2012, we will double subsidies to regions for the support of preschool education to 2 billion roubles. Furthermore, we plan to issue a 8-billion-rouble loan to Russian regions for the further development and modernisation of childcare establishments.”
“We are getting additional opportunities for resolving long-term strategic objectives. In this sense, the submitted budget is a development budget designed to stimulate quality growth and modernise the economy. At the same time, this is a socially-oriented budget with a direct emphasis on improving living standards and implementing large-scale programmes in demography, healthcare, education and pensions. Needless to say, these issues remain at the top of our list of social priorities.”
“Russia continues to see growth across all key industries. By 2012, we should fully offset the effects of the crisis. <…> We will need to adopt our first genuinely post-crisis budget and shift our focus to long-term goals.”
“The 2012 budget should provide for drastic increases in payments to servicemen and the implementation of a national armament programme. Let me reiterate: budget funding should invariably reach specific enterprises of this sphere in full and in due time. Please monitor these issues at all times.”
“When we make provisions for such major spending, it’s important to follow a stringent and responsible budget policy. We cannot stray from our course on compensating for the budget shortfall. We should strive to keep a balance of revenue and expenses.”
“Budget investment should not be based on cost estimates, like it was in previous decades, in accordance with a very simple and primitive logic and formula whereby every year we must spend more than in the previous year. Budget outlays must be matched by real improvements. The people must feel it in their daily life when they deal with government institutions.”
“As part of the new budget structure, we must set priorities more clearly, focus on key projects for social, economic, scientific, and technological development, and ensure the fulfillment of our programmes in national security and defence.”
“The government will approve the terms and parameters of social and economic development for 2012 – 2014 and the guidelines of tax and customs policy no later than late April or early May. In June, we will have to decide on the key aspects of the federal budget, including volumes of revenues and expenses and limits on the budget deficit. The budget must be submitted to the State Duma no later than October 1. We will be drafting the main financial statement as transparently as possible, as we always do. We will attract deputies of the State Duma and members of the Federation Council to this work.”
“Over the next few years, we'll need to resolve the problem of the federal budget deficit. This must be done by 2015, or even earlier if possible. We also need to increase the return on each rouble we provide. And we have adopted a programme to increase the effectiveness of public spending. In 2012 we will adopt new principles for drafting the federal budget on the basis of long-term state programmes.”
“As you know, the GDP will be 50.4 trillion roubles and the level of inflation is expected to be 6.5%. We think the budget deficit will be about 3.6% next year. Budget revenues will amount to 8.8 trillion roubles and expenses to 10.7 trillion roubles. We would really like to stay within these parameters and avoid increasing the budget deficit. It is a very important indicator that points to the stability of our economy. In this respect, we stand out from many of the so-called developed market economies of the world. There is no doubt that this is a self-made competitive advantage for us.”
“We hope that economic growth will help to balance the country's budget. Extra budget revenues should come from qualitative economic development and not from oil fees or the demand for natural resources. So we have made a conservative forecast for oil prices. The current cost for oil is $75 per barrel, according to the draft budget for 2011. Of course, the decisions we made in the tax sector should increase budget revenues as well. I mean the increase of mineral extraction taxes, indexing excise taxes, and changing payment rates in the Pension Fund, Social Fund and the Mandatory Medical Insurance Fund.”
“In terms of budget spending priorities, they will remain unaltered. We will ensure that the social obligations of the government are fulfilled and pay particular attention to the programmes connected with modernizing the economy and developing high technologies. On this subject I can say that in 2011 pensions will grow by 9% compared to the basic one of 2010. The old-age retirement pension will increase to 8,780 roubles, while the social pension will rise to 5,050 roubles. And the major increase is set to take place on February 1 of next year.”
“I'd like to point out that this upcoming budget will be tight. In these conditions it is very important for us to focus on our priorities. We must justify and consider the effectiveness of all expenditures and only spend money on truly important issues. This primarily applies to social services and meeting our social obligations. I'd like to emphasise that our unconditional priorities include everything related to pensions, allowances, public sector wages and salaries, the implementation of housing programmes and the development of healthcare.”
“It’ll take time to overcome the negative effects of the global recession fully, rebuild the economy and reverse the budget deficit. This is why we cannot expect a sharp increase in budget revenues in coming years, which we could have spent on items other than servicing our debt. The budget will continue to run a deficit for the next few years, which is why we must adopt a highly responsible approach for each expenditure item, concentrating resources on high-priority budget items and trying to stay on schedule to reduce the budget deficit to 3% in 2012. The same strict discipline is also absolutely necessary for regional budgets in order to avoid discrepancies and ensure the stability of the entire budget system.”
“We will continue working on the budget today and we will review the scenario plans for economic development for 2011-2013. I'd like to emphasise the particular basis of this document. It is designed for a post-crisis period when we must not only fully overcome the consequences of the past year's recession, but also achieve steady development. Needless to say, as we agreed, the budget should be based on conservative predictions, which will be carried out in any event. However, I believe that the scenario plans should reflect the government's efforts to modernise the economy and formulate a clear understanding of the prospects and factors of future growth”.
“We should proceed from the fact that a low or even zero budget deficit is normal for Russia. Only such policy can make one feel confident amid fluctuating prices for our export products. We should not cut back on budgetary spending and forego unsecured debentures. We must unfailingly honour our commitments before Russia's citizens whatever the circumstances. Consequently, we have to stick to our timeframe and reduce the budget deficit to 3% in 2012 and then down to zero in 2015”.
“We decided not to cut the government spending on every budget item. We can often hear that there was a radical reduction, but we didn't make wholesale reductions of spending on every budget item. We chose a different solution, and I believe we did the right thing. As a matter of fact, we kept the budget at the planned level, redistributing budget spending to benefit the sectors that can ensure social and economic stability in the country. Moreover, budget spending grew significantly in 2009, if compared with 2008, the pre-crisis year. I was surprised to see these numbers myself yesterday. Budget spending grew 27.3%, whereas revenues dropped 20.9%. We used the reserves we accumulated to offset the deficit.”
"Recently, we have focused our attention on the preparation of and implementing the budget. Budget planning is a major yardstick by which we measure the effectiveness of public administration. It allows us to see whether the government can actually address the problems people face."
“Forecasts for social and economic development and basic budget indices should be based on conservative and realistic estimates that take into account all possible risks, particularly unpredictable fluctuations in global markets for oil, metals and other basic Russian exports.”
“We need to prepare in advance for the entry into force of the law altering the status of public institutions, which envisages fundamentally new approaches for preparing and executing of budget expenditures. In particular, the usual estimates will be replaced by measures such as targets in education, healthcare and other public services. These targets will be used not only to determine how much funds are allocated but also to set requirements for the scope and quality of work. The purpose of these changes is to provide healthcare, education and the services of our entire public sector to citizens by providing an incentive for careful attention to people's needs and demands.”
“It should return to traditional financial planning. We had to temporarily abandon it last year in order to take extraordinary measures due to the global financial and economic crisis. We had to implement government anti-crisis programmes, which on the whole have met their targets. The situation has now been stabilised, and we can again afford to prepare a more routine budget. Therefore, we must produce a high-grade budget for 2011 that will meet long-term objectives and fully guarantee the fulfilment of social obligations.”
"The Government is planning to allocate an unprecedented 10% of GDP to fund pensions and other social benefits in 2010. We are spending less than 3% on defence. Ten percent of GDP is a huge sum for any state and by any standards."
"I think it is a fact of fundamental importance that in spite of the problems caused by the crisis we have not renounced our strategic line of investing in man, in the quality of life or the well-being of Russian families. About 70% of budget spending in 2010 will have a pronounced social character."
Ours is a socially oriented budget. It stipulates requisite allocations for the payment of benefits, pensions and wages. We are carrying out a large-scale pension reform - we have discussed this more than once and you know the main parameters of that reform. We must do everything possible to ensure the unconditional implementation of these commitments. On the other hand, the budget is also aimed at development, and so allocations to high technologies have been reaffirmed and, in some cases, increased, in particular allocations to the aerospace sector, shipbuilding and other high-tech sectors.
"The federal budget will retain its role of the most important stimulating tool for economic modernisation. We will continue programmes of infrastructure development and establish innovation-based production facilities. Allocations for these purposes will total around 1.6 trillion roubles. Out of that sum, 300 billion roubles will go into building roads, and about 240 billion for support of high tech industries. The Federal Space Programme will receive 67.2 billion, the Rosatom corporation over 53 billion roubles as a Government's property contribution, the GLONASS programme 27.9 billion, civil aviation 22.5 billion, research and teaching personnel training 11.9 billion, and digital TV programme 10.8 billion roubles."
"Overall, the Government will spend an unprecedented 4.4 trillion roubles on pensions, or 10% of the country's GDP. There has never been anything like that in Russian history."
"Total expenditures of the federal budget will amount to 9.9 trillion roubles in 2010, which is comparable to this year's spending. No, it is slightly more, as spending in 2009 is expected to be 9.8 trillion roubles. These resources will certainly help us finance all of our priorities, first of all to significantly increase retirement pensions. Let me remind you that the next indexation is scheduled for December. We will raise the basic part of labour pensions by over 30%. Next year pensions will grow by another 46%, averaging at 8,000 roubles a month."
“The primary goal of the budget policy for the immediate future is to ensure macroeconomic stability and to consistently reduce the budget deficit, which will amount to 3.2 trillion roubles in 2009 and should be halved to 1.6 trillion roubles by 2012.”
"Assuming that in 2010 budget revenues will make up 16% of GDP, or 6.9 trillion roubles, and expenses are expected to reach 9.8 trillion roubles, the budget deficit will stand at 2.9 trillion roubles, or 6.8% of GDP. Thus, the deficit will be less than this year's by 1% of GDP. In the current circumstances, I consider this an acceptable figure."
"I am referring to the allocation of 4.9 billion roubles worth of subsidies from the federal budget to four major defence enterprises, which will help them to pay their debts, and keep their production lines and, I hope, their personnel. These enterprises are Uralvagonzavod, the Kalinovsky chemical plant in the Sverdlovsk Region, the Soyuz design and experimental bureau in Kazan, and the Krasnozavodsk chemical plant in the Moscow Region."
"A total of 150 billion roubles will be allocated for additional capitalisation of banks. Another 142 billion roubles will be spent on the resolution of other urgent problems. Out of this sum, 28 billion roubles will be spent on building and buying housing for servicemen. All in all, 71 billion roubles have been allocated for projects in the nuclear industry and aircraft building. In addition, 6.3 billion roubles have been appropriated for the conduct of purchasing and trade interventions in the markets of agricultural produce with a view to creating conditions for their work. These are not only additional expenses but also the funds that could be redistributed without prejudicing the implementation of the programmes for which they had been initially reserved."
“We will stimulate subsidies to balance the budget. Their size will depend on the current share of severance tax revenues in the budget of each particular region. The decision will concern 32 regions, and we will work with each of them separately to balance their budgets. Also, all revenue from the management of the assets of the Reserve Fund and the National Welfare Fund will be transferred to the federal budget from January 1, 2010. In addition, the share of profit which the Bank of Russia will be obliged to transfer to the federal budget will be increased from 50% to 75% in the next three years.”
“We propose transferring the severance tax (mineral production tax) to the federal budget in full beginning next year. At present, 95% of the severance tax is transferred to the federal budget and 5% to the budgets of Russia's constituent entities. In the past, we permitted that minor deduction to the regional budgets, but the decision to transfer 100% of the severance tax to the federal budget will increase it by at least 46 billion roubles in 2010.”
“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%.”
“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.”
“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.”
“I would like to stress once again that within the context of the financial crisis and the budget deficit, we are, essentially, taking an unprecedented step in the social sector: we are raising pensions. No one else is doing this, no one. It is also vital that we guarantee wages in the public sector, that we pay benefits and provide pharmaceuticals for pensioners and disabled. High-tech medical support will not be forgotten, nor will support for modern educational centres, or housing programmes. Let me add that the allocations for social policies in 2010 will increase by more than 10%.”
“Regarding the deficit, this as I said, will amount to 3.2 trillion roubles in 2010 or 7.5% of our GDP. There is no doubt that we can find the funds to cover it. However, I should tell you directly that this is the maximum deficit that we can allow ourselves without harming our macroeconomic stability. <……> I repeat: we must strictly adhere to the decrease of the budget deficit planned for the period 2011-2012. Correspondingly, we will try to move to a deficit of 4.3% in 2011, and 3% in 2012.”
“Over 70% of the 2010 budget expenditure has been clearly earmarked for social programmes. These resources will go towards supporting people's income, and providing them with vital services.”
“We do have a choice about how we deal with this deficit. What are the alternatives? Either we have an abrupt, dramatic reduction in expenditure, or we accept the deficit, but look for additional sources of income, and find reasonable ways of making up for the shortfall. I think there is a stronger case for the latter, and that this is a more viable direction for the country today. It is also in line with the socio-economic policy of social justice, which is a policy we have pursued in recent years. It is, of course, imperative that we fulfil the promises we made to our people, the plans for economic development.”
