Prime Minister Vladimir Putin conducts extended meeting of the Council on Developing Local Self-Government
Vladimir Putin's Opening Speech:
Good afternoon,
Today, we will discuss the role and tasks of the bodies of local government in carrying out anti-crisis measures.
I would like to say right away that today much depends on the effectiveness of the regional and local administrations, and on their ability to display responsibility and act vigorously, competently, and in a timely manner.
A vast portion of issues determining the social well-being of citizens is linked with local government. These include pre-school and general education, the primary link of healthcare, housing and utilities, and provision of amenities in cities and villages. Many public-sector employees are working in these spheres. You know this very well because this is the gist of your everyday work. You also provide support to businessmen and resolve labour market problems. This work is of primary importance today.
The Government is aware of the difficulties encountered by the regional and local administrations. You are having a difficult time - this is true. To begin with, the incomes of the municipal budgets have decreased. In the first quarter of this year, they averaged an 11% reduction in comparison with the corresponding period last year. Moreover, the tax base of the local government still remains inadequate. We should admit this. This year, intra-budget transfers account for more than 31% in the overall income of the local budgets, and this is without taking into account the subventions directed towards supporting delegated powers. In villages and urban areas, this figure reaches 60%. In other words, the local finances still highly depend on support from higher tier budgets.
Considering these factors, we have decided to tangibly increase our support for the territories. In the new version of the budget, federal support for the regions is 36% higher than it was last year. All in all, we have earmarked 1,200 billion roubles for this purpose.
In turn, regional authorities should do all they can for the solvency of municipalities.
I can add that the amendments, which have already been introduced into the Budget Code, substantially expand opportunities for balancing out local budgets.
The tax policy is also subject to change. At the recent meeting of the Government Commission on Budget Projections, we agreed to step up the introduction of the local tax on property. It is designed to replace the existing taxes on land and property. I hope very much that this change will substantially increase tax revenues for the local budgets. However, this should be achieved not by increasing tariff rates, but by differentiating them, as I already said at the aforementioned meeting. Taxes will be increased for those who own expensive property, big plots of lands, large houses, and high-end flats. Preferential tax treatment will be introduced for those who own modest property, small apartments, houses, plots of land, and small horticultural houses. Needless to say, these people must be protected. A system of benefits should be elaborated to this end.
As for expenses, it is essential to act in a balanced and pragmatic manner. Municipalities must be tough on financial plans and pay special attention to financial discipline.
Local finances should have a full return on clearly formulated major directions. Programmes of secondary importance may be suspended for the future, as I have said more than once. The quality of services to the population should not be compromised, and should be delivered in time.
Payment of salaries in the public sector should be made a priority. Incidentally, the Astrakhan Region has introduced new forms of payment in the public sphere, and the average level of salaries paid to those employed in main directions has gone up by 30% to 35%. This is what we have counted on. When new forms of payment are adopted for real, they produce a positive effect. Abiding by social commitments, creating new jobs, and organising public works are all at the top of the list of priorities today.
As for investment, it is necessary to concentrate on finishing the construction of facilities nearing completion. It is worth thinking about launching projects, which are likely to save budget funds in the future. First and foremost, I am referring to energy-saving projects.
Municipalities should never fail to pay. This applies to all government structures - municipal, federal, and regional ones. They should not make defaults in payments or create any financial bottlenecks or problems. We must guarantee 100% payment for the consumed fuel and energy resources and utilities.
Programmes of the fund on assisting the development of housing and utilities have rendered substantial support for municipalities. The bodies of local government have already received more than 80 billion roubles from this investment fund. All in all, owing to this fund, into which we invested a total of 240 billion roubles, more than 120,000 people have already received new flats or will receive them in the near future. A considerable part of the dwelling stock will be repaired. By this programme's completion on January 1, 2012, seven million Russian citizens will have their housing conditions improved. In addition to that, more jobs will be created in the construction industry and the housing and utilities sector.
I recently visited Novokuznetsk, where I met builders and heads of construction companies. They complained that it takes them four to five months, and in some cases up to a year to have buildings commissioned and to receive a BTI passport in the government registration agency. This makes construction much more expensive - by 10,000 roubles per flat. In fact, the costs are even higher because until the registration of a building is completed, it has to be maintained by construction workers, heated, protected, and so on and so forth.
These are additional expenses, and eventually people have to pay them. Today, I have signed a Government resolution that will remove this excessive red tape.
I recently met with representatives from small- and medium-sized business. You know what serious steps we are taking to stimulate this sector of the economy. We hope that the local authorities will follow the same logic by creating the most favourable business environment, and removing barriers preventing new companies from getting access to the local markets. In doing so, they will resolve the employment problem and replenish local finances.
It is time to stop torturing business with endless check-ups, and creating a host of normative acts with yet another new set of rules and demands regulating its work. Sometimes, these demands are simply absurd. In some municipal formations, to get permission for an ordinary cross street banner or a sign, it is necessary to obtain more than 20 to 30 documents and permits.
Allow me to recall that on May 1, a law on protecting the rights of legal entities and individual businessmen during government inspections will come into effect. It will impose serious restrictions on all kinds of check-ups. As for unplanned inspections, they can be carried out only with the permission of the Prosecutor Office.
I have the following requests to the local bodies of government: first, abstain from excessive check-ups, and second, elaborate clear-cut administrative rules for inspections in line with this law. I would like to ask you not to take any independent action or allow any bureaucratic abuses.
Allow me to repeat that the task of the local authorities is not to engage in petty control over kiosks, markets, and shops but to secure normal, comfortable conditions for the operation of business and for investment. This will upgrade the quality of the services to the population and reduce their costs. I know that many municipal formations are pursuing such policy.
I would like to ask you to take a detailed inventory of municipal property and to lease as much of it as possible to small businesses at affordable prices.
Other measures of supporting business include lower tariffs for connecting companies to utility networks and reduced quotas of state purchases for small firms. I would like to note that this year the requirement of mandatory granting of a quota of no less than 20% for small companies is being extended to municipal contractors.
In conclusion, I would like to make one more remark. Today, regional anti-crisis headquarters have been set up and are operating in all regions, yet rarely include representatives from the bodies of local government. At any rate, this is what the Ministry of Regional Development is reporting.
I believe that it is absolutely wrong to ignore the local authorities. Representatives from municipalities know the local situation well and are in permanent contact with the local people. Regional authorities must take their opinions and meaningful proposals into account when carrying out anti-crisis programmes. In some cases, the regional government simply cannot implement these programmes without the local authorities. What public works can one organise without their participation? Who apart from them knows what should and can be done? Their involvement will make it possible to better coordinate the cooperation of the regions and municipalities, as well as the federal government.
This is what I wanted to say in the beginning. Thank you for attention. Let's proceed with our discussion.
