Agenda: Implementing the 2022 federal budget, financing Arctic regions’ development and enhancing the efficiency of forest fire protection.
Mikhail Mishustin’s opening remarks
Finance Minister Anton Siluanov’s report on the implementation of the 2022 federal budget
Excerpts from the transcript:
Mikhail Mishustin: Good afternoon, colleagues.
Before discussing the agenda, I would like to say a few words about the decision on the Arctic regions’ development. Over 2.5 million people live in these northern regions with specific natural conditions. The expansion of the social infrastructure there is among the Government’s priorities. We have allocated over 2.5 billion roubles towards this in the current year.
These funds will suffice to build or repair kindergartens and schools, hospitals and outpatient clinics, sports grounds and culture centres. Some of the money will be used to buy equipment for healthcare facilities and to build rural health stations.
Taxes paid by the residents of preferential treatment areas implementing new investment projects in the Arctic will be used to cover socially significant initiatives. Following on the President’s instructions, the Government has amended the legislation accordingly. A resolution has been signed to this effect. This will release additional funds for addressing the issues of special importance to the people.
Let us get down to the agenda.
In accordance with the President’s instructions, we are adjusting the legal framework to enhance the efficiency of forest fire protection, which includes preventive measures, emergency response and fire suppression.
The relevant draft law is designed to coordinate the use of manpower and equipment to attain the task at hand. The process will be supervised by the Federal Agency for Forestry, which will use, if necessary, the federal emergency response reserves, including hundreds of experienced firefighters and equipment of the Avialesokhrana forest fire monitoring agency. We must ensure that they are quickly delivered to the affected regions for suppressing fires as soon as possible.
The document takes into account the specific features of forested territories, such as the location of seats of fire located in difficult to access areas.
The new regulations will simplify access to all the available resources needed to put out forest fires and, most importantly, will help us protect people and their property from the elements.
Colleagues,
The year 2022 is behind us, and we can already carry out a preliminary review of the federal budget performance during this period. We had major tasks to address, which required substantial spending in excess of 31 trillion roubles, while the budget revenue was just short of 28 trillion.
We were rigorous in fulfilling our social commitments to the people of Russia and supporting businesses.
Mr Siluanov, please share with us more details on the budget performance.
Anton Siluanov: Mr Mishustin, colleagues,
Indeed, in 2022 we focused our financial resources on supporting people, businesses and delivering on our social commitments. This was the main goal for our budget policy. For this, we relied both on revenues, as well as on the resources we raised on the financial markets.
We exceeded our plans in 2022 as far as revenue is concerned. As you have already said, we generated almost 28 trillion roubles in revenue, up by 2.8 trillion compared to our initial projections. This is attributable to oil and gas revenue, thanks to higher energy prices, as well as growing non-oil and gas revenue, which is due, among other things, to an increase in VAT proceeds driven by spikes in demand during specific periods in 2022. We used these proceeds as an additional resource for funding our spending.
We increased borrowings on the financial markets too, which led to a higher budget deficit at 3.3 trillion roubles or 2.3 percent of GDP. However, if we factor in the amounts we offset for state extra-budgetary funds by postponing social security contributions, and if we subtract this amount from the total spending, this leaves us with a deficit of 1.8 percent of GDP, which means below the 2 percent threshold, just as we had planned.
Now about expenditures. Indeed, despite the geopolitical situation, despite the restrictions and sanctions, we have met our targets. Moreover, the restrictions have not affected the fulfilment of our social obligations. On the contrary, we have increased expenditures by more than 6 trillion roubles, which was used primarily to support people.
A few points.
First. Pensions have been increased (an unscheduled 10 percent indexation for non-working pensioners), as have the subsistence minimum and the minimum wage. Almost 500 billion roubles were allocated for these purposes. We have implemented measures to support the labour market and ensure the lowest unemployment rate in recent years at 3.7 percent. We have provided more than 400 billion roubles to back new social benefits for children from 8 to 16. In fact, we have created a holistic support system for families with children, which has become fully operational in 2023.
We provided support for businesses as well – the deferment of corporate insurance premiums for the second and third quarters. That cost more than 770 billion roubles. Large funds went to subsidise the interest on business loans to ensure that they could borrow capital.
Last year, we implemented a large programme to support mortgage-backed construction, which boosted the amount of completed residential projects. Last year, our builders completed a record number of housing projects. Also, money was allocated ahead of schedule for road construction, to compensate for growing construction costs, which made it possible to complete all the projects we had planned for 2022.
A programme was also launched to modernise and repair schools, and build university campuses. And this list of what we managed to do last year is far from complete.
We have also implemented a number of institutional measures. New procurement legislation has been improved, and budgetary procedures have been simplified. The money began to be available to end consumers faster.
We have covered 97.5 percent of the planed expenditures last year, which is higher than in previous years.
A few words about the Russian regions. The regions have consistently executed their budgets. Their total revenues exceeded the targets by 7 percent and amounted to more than 19 trillion roubles. The consolidated regional budgets had a surplus of about 200 billion roubles. Approximately 40 regions showed a surplus, and 45, a deficit. They have accumulated a balance of almost 3 trillion roubles, which will help in executing the regional budgets this year.
Overall, we can say that last year, we fulfilled all our planned obligations and, as I said, provided support measures to households and businesses.
Mikhail Mishustin: Thank you, Mr Siluanov. We must still review the results in sectoral branches, and we will certainly do this in the first quarter. That said, in general, the figures are not bad. We did much to ensure macroeconomic stability. Of course, we need to continue these efforts this year to fulfil our planned budget commitments.
I would like to emphasise the need for the ministries and departments to display strict performance discipline in implementing state programmes and other measures addressing national socio-economic development.
Colleagues, you must personally deal with contracting now. Please, look at the amounts and limits of budget obligations in 2023 and understand the importance of planning this work.
To enhance the efficiency of budgetary spending, the Government has adjusted many related procedures and deadlines for decision-making. It is necessary to draft the project documentation and the required acts on time and promptly sign state contracts and agreements. The relevant resolution has been signed.
I would like to point out to the heads of the federal executive government bodies the importance of strictly observing the schedule for funding all undertakings.
