On 2015-2017 budget policy priorities
Dmitry Medvedev’s introductory remarks:
Government meeting
Good afternoon. Today, you and I continue to address the difficult budget issue, as we did yesterday. Most issues are linked with the discussion of our budget policy and basic parameters of the federal budget for 2015 and the next two years and, naturally, the budgets of the Pension Fund, the Social Insurance Fund and the Medical Insurance Fund. I repeat once again that as of late, we have repeatedly discussed this issue with most of those present in this auditorium. Yesterday, we discussed this issue with members of the Government Commission on Budgetary Planning for the Upcoming Fiscal Year and the Planning Period.
Moreover, we will have to decide on federal targeted programmes due to be financed from the federal budget. The federal budget will be drafted, with due account for these decisions and in line with our mutual procedure that has been charted by us, and it will be submitted to the State Duma for consideration after approval at a Government meeting.
Separate speakers will report on all the above-mentioned issues, and I will, naturally, outline some principled aspects in my speech.
First, as you know, the parameters of the federal budget are calculated in line with the basic and most realistic national socio-economic development scenario. Naturally, this realistic scenario reflects our current perceptions of the situation, and our opinions of the scenario are therefore subject to change. Unfortunately, this scenario predicts an all-out worsening of the economic situation and slower economic growth rates throughout 2014. Next year’s growth rates will accelerate to two percent and to over three percent in 2017. The present dynamics of the main indicators is somewhat better than our forecasts but nevertheless we must be prepared for any developments. I will not explain the reasons for this because everyone understands them.
Dmirty Medvedev: "Most issues are linked with the discussion of our budget policy and basic parameters of the federal budget for 2015 and the next two years and, naturally, the budgets of the Pension Fund, the Social Insurance Fund and the Medical Insurance Fund."
Of course, we have enough reserves to compensate most potential economic losses, but various risks nevertheless exist, and all of us should take them into account while determining budget parameters and development scenarios.
Therefore, revenues and expenses are planned in line with these not very optimistic assessments, to put it mildly. In this context, the federal budget deficit remains normal, acceptable and stable. The 2015 budget deficit will total less than 0.5 percent of the GDP, and it will exceed 0.5 percent of the GDP in subsequent years. And we expect to post a budget surplus in 2014.
Second, the goals of the upcoming budget period are clear. Of course, our first goal is to honour our social commitments and ensure the long-term stability and equilibrium of the economy. It is also imperative to continue improving fiscal relations, to complete integration, including financial integration, of Crimea and Sevastopol as Russia’s new constituent entities, and to make budgets at all levels more transparent, understandable, and available for public discussion and oversight.
Providing social support and socially important services, including healthcare, educational, and cultural services, still account for a significant portion of expenses the of the federal and regional budgets. Approximately 60 percent of the spending goes to these purposes. More than 2.7 trillion roubles will go to paying and adjusting pensions, allowances, and various subsidies and compensations, as well as to increase salaries in 2015-2017 from the federal budget alone.
Dmirty Medvedev: "We have enough reserves to compensate most potential economic losses, but various risks nevertheless exist, and all of us should take them into account while determining budget parameters and development scenarios."
My third point is that we don’t have too many choices when it comes to increasing the budget revenue given the international economic situation and parameters of our domestic economy. Thus, we need to once again review our expenses as discussed yesterday at the meeting of the Commission on Budget Projections and analyse investment projects and regional programmes that are scheduled to be subsidised from the federal budget. I hope that the Minister of Finance will come up with specific proposals in his report in light of what we talked about yesterday.
As you may recall, as of 2013, the federal budget has been drafted based on 40 state programmes. Regional and municipal budgets are about to switch to the same programme-based principle, and our new constituent entities should do the same as well. Currently, over half of the money, I am referring to the public portion of the budget, is spent through state programmes, which makes it possible to assess objectively the performance. At a recently held Government meeting, we reviewed the progress in order to see which programmes genuinely work and which still lack an effective performance mechanism and whose funding should likely be reduced.
Federal targeted programmes are similarly part of Government spending. Today, we will review those scheduled for the next three years. Of course, it’s imperative to ensure the continuity of federal commitments and to strive to complete unfinished construction, especially buildings that are almost ready. It’s also imperative to more closely align our actions with the regions and, of course, with businesses.
The list of federal targeted programmes has been formed based on maximum investment spending. Funding variables that go beyond such limits are likely to be included in a waiting list and decided upon later.
"More than 2.7 trillion roubles will go to paying and adjusting pensions, allowances, and various subsidies and compensations, as well as to increase salaries in 2015-2017 from the federal budget alone."
Next year, we plan to implement 46 federal targeted programmes with a total budget funding of over 1 trillion roubles. Some programmes can be placed on the waiting list, but we'll cover this separately and then take the final decision. In addition, we plan to draft four new federal targeted programmes. It’s imperative to speed up the development of the proposals on budget allocations for these programmes.
Dmitry Medvedev: "The federal budget has been drafted based on 40 state programmes. Regional and municipal budgets are about to switch to the same programme-based principle, and our new constituent entities should do the same as well. Currently, over half of the money, I am referring to the public portion of the budget, is spent through state programmes."
Now, a few words about the budgets of state extrabudgetary funds, such as the Pension Fund, Social Insurance Fund and Mandatory Medical Insurance Fund. The Pension Fund’s revenues are projected at 7.4 trillion roubles in 2015, and the expenses will amount to 7.5 trillion roubles. In 2016 and 2017, they will increase by a rather significant amount. The difference of about 100 billion roubles is expected to be offset by way of intergovernmental transfers from the federal budget.
The Social Insurance Fund’s revenues in 2015 will be slightly over 600 billion roubles. This figure is also growing and will reach almost 700 billion roubles in 2017. A portion of these funds will be used for insurance in case of temporary disability, maternity, occupational accidents and diseases. According to preliminary estimates, the fund’s expenses will not exceed its revenues and will amount to about 597 billion roubles; in this sense, the balance remains intact.
Dmitry Medvedev: "Next year, we plan to implement 46 federal targeted programmes with a total budget funding of over 1 trillion roubles."
The overall 2015 budget revenue of the Federal Mandatory Medical Insurance Fund (FMMIF) is estimated at 1.5 trillion roubles. Subsidies to the budgets operated by FMMIF’s territorial bodies to finance healthcare in the Russian regions will account for most of the spending, which we will also discuss today.
Let's move on and discuss these issues because they are the most important subjects at today's Government meeting and in general.
Over to you, Mr Siluanov.
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