The Address notes that budget policy should be based on the imperatives of improving citizens’ quality of life, creating the conditions for positive structural changes in the social and economic spheres, achieving macroeconomic balance and making public finance management more efficient and transparent.
Consistent effort to bring down the inflation rate must also remain a priority for the Government.
The Address notes that the Government’s work on budget policy development and implementation should include action in the following areas:
First, ensuring a national balanced budget in the long term. State spending strategy should be based not on the current situation on raw materials markets, but on long-term trends.
Second, the policy of putting extra budget revenue arising from the favourable situation on raw materials markets into the Stabilisation Fund should be continued. Money over and above the Stabilisation Fund’s basic volume should be used exclusively to replace external sources of financing the budget deficit and (or) to pay off the state’s foreign debt ahead of schedule.
At the same time, a clear distinction should be made between the money accumulated in the Stabilisation Fund to minimise the negative impact of a fall in oil prices (the reserve fund), and the resources accumulated over and above this volume (the Future Generations’ Fund). The size of the reserve fund should be set as a percentage of GDP.
Medium-term financial planning should play a more important part. From next year the federal budget will need to be approved by law for the medium term (2008–2010).
One further task is Russia’s effective participation in international community initiatives to relieve the debt burden on the poorest countries.
Reorganising and increasing the capitalisation of specialised state investment institutions in order to support the export of goods, import of technology and provide long-term financing for major investment projects is also an important task.