President of Russia Dmitry Medvedev: Colleagues!
Today we have a working meeting to prepare the very important draft of the Budget Message, a message about fiscal policy for the next year and the three years that follow. Preparations should generally be completed sometime in mid-May, and the work is now in full swing.
I would like to inform you that I have decided to change the procedure for delivering or presenting this message. Now we will do it slightly differently. I would like the message to be communicated to the Government Cabinet's Presidium and I will do this myself. This will probably help clarify some of its provisions and give it more authority.
Colleagues from the Cabinet have already undertaken preparatory work to create the foundation for making basic, fundamental decisions. I just recently signed the Federal Law on amendments to the federal budget for 2009 and for the period 2010 to 2011.
Despite the fact that there has been a substantial reduction in federal budget revenues, we were able not only to maintain, but in some areas (of course not all, unfortunately) to strengthen the social orientation of the budget. We have provided for additional funds for indexation of pensions, benefits, and for active labour market policies. In general, even the budgetary funds allocated to the areas where we have had to reduce expenditures have increased compared to last year. These parameters suggest that the current budget is an anti-crisis one in the fullest sense of the word.
The crisis that continues today is not a reason to stop reforms, nor to stop changes from taking place. It is crucially important to improve the structure of the economy using innovative ways, namely what we have already agreed on and what was once the basis of the well-known Programme 2020 and the other fundamental documents currently in force.
We need to work on the modernisation of social networks, social services, transport links, energy and financial infrastructure – in fact to work on what we are working on now.
Moreover, the crisis should not become an excuse not to comply with tax obligations. Nevertheless, we must consider how to offset the increasing load associated with the rise in insurance contributions in the pension and health insurance systems in 2011.
There is another issue to be discussed. As our experts estimate (in fact, this is our main projection), the 2009 budget deficit could reach about 8 percent of GDP. For 2010 it is forecasted at 5 percent of GDP maximum, in other words according to current estimates it will slightly decline. And in 2011 it will be down to 3 percent, assuming of course that the scenario we have now remains in force, and of course we must be very careful about how we use our country’s Reserve Fund. And obviously special attention must be paid to budget expenditures so that we leave ourselves room for the so-called tax manoeuvre.
I am not going to talk about all the obvious things that you have been discussing at Cabinet meetings for the last while. You are right to discuss them, but nevertheless the task of improving the efficiency of our budget spending is currently of crucial importance if we are to ensure that we maintain our clearly defined priorities, objectives and performance indicators.
Once again, I would like to draw attention to a subject that has become very important in recent years. And this is not just because I once dealt with it in perhaps a more dynamic way than I do now, but simply because it really is important for the development of our country. I am referring to the priority national projects.
You have made a number of decisions recently concerning housing. In my view these decisions were correct. We have repeatedly talked about this together. And I hope that in similar fashion we can find the funds necessary for education and health. Naturally we will continue to deal with agriculture implementing the state programme that we have now.
A few specifics: first, all social responsibilities that we have undertaken to fulfil for our citizens must be implemented in full. That may seem obvious, but it’s nonetheless the most important thing.
Secondly, we have to analyse carefully the problems of regional and local budgets and develop a system of measures that creates incentives for the sustainable development of the entire budgetary system.
And, third, we need to draw attention to the new incentives for small business and training for people who are economically active. Not so long ago the Cabinet announced a series of important measures to promote small business and that was a good thing. I hope they have the desired effects. That said, as the government's experience of fighting for small business over the last 20 years has shown, we can never do enough in this regard. Once a certain amount of time has gone by we will see that some measures aren’t working and some need to be adjusted.
For these reasons we still need to think about the problems of small business and offer more new measures to stimulate the development of this extremely important segment of economic life. Of course it is one of the sectors that is suffering a great deal from the crisis, sometimes more than others. And of course everything that we do must be accompanied by measures to ensure informational support.