Prime Minister Vladimir Putin’s speech at the session:

Colleagues, first of all I would like to point out that we have been discussing this issue for a long time now. We took the first step about seven years ago. Back then, we thought that we had delegated these powers fairly clearly. Mr Kozak was very actively involved in this work. However, we realised that this wasn’t enough, and this process has been on and off since then. Our frank and lively discussion today shows that Mr Medvedev has reinvigorated this process in a very timely manner.

In this regard, I would like to go over draft documents, but I will allow myself a few lyrical digressions, as colleagues have already brought up Franklin Delano Roosevelt and other really important issues. Indeed, during the Great Depression in the 1930s, Roosevelt addressed the nation on the radio every week. He discussed various topics, not just labour relations. His objective in these chats was actually to provide counselling to the entire nation in an attempt to instil confidence in the future. They didn’t have television in today’s sense of the word, or the Internet. We have different tools at our disposal, including public organisations… I can’t say that we are using them effectively, so we should build up our efforts in this area.

With regard to the questions about VAT, sales tax or turnover tax, our colleagues from the government have already provided answers to the heads of regions. I will not elaborate on these matters now, since they are very complex. The turnover tax is not a tax at all, but rather a quitrent. Perhaps there was a need for it some time ago. Mr Savchenko (Evgeny Savchenko, governor of the Belgorod Region) is absolutely right emphasising the importance of road construction. However, we have established federal and regional road funds not long ago and identified sources for replenishing them. All calculations have been made, and these funds will be replenished. Let me remind you that regions are entitled to transfer a portion of these receipts to municipal budgets and establish road funds at the municipal level. In addition, some of our colleagues here today have told me directly (I have already mentioned it publicly earlier) that there will be so much money that we will not be able to spend all of it on road construction, and asked for permission to use it for other purposes. Let’s launch this process on January 1, 2012, disburse the funds, see how it works and then we’ll be able to draw conclusions and make the next steps. This covers road construction, VAT and sales taxes.

I presume that you are well aware that we are about to approve very tight budgets for 2012, 2013, 2014 and all the way through to 2020. We have budgeted vast spending on defence and security. Government defence contracts alone are worth 20 trillion roubles. Every kopek has been taken into account. If we shave off just 1% of the VAT, how are we going to make up for it? Or shall we shrink these programmes? We are also going to finance pay raises for the military, law enforcement and security service personnel in 2012 and 2013. How are we going to adjust pension payments if the Pension Fund is in the red? All of this needs to be carefully calculated. I do not rule out anything that we heard here today, but everything needs to be calculated very thoroughly.

With regard to rural health posts, certainly, there are universally accepted standards. However, we are now implementing a new system based on modernisation of the healthcare system and the introduction of new standards. Standards should be the same across the nation: be it Moscow, Perm, Tyumen, Krasnodar, Novosibirsk, Omsk or Krasnoyarsk.  We should strive to ensure that people have access to the same standard of medical care regardless of where they live in the Russian Federation, in the countryside or in big cities. Clearly, we have a long way to go, but we should strive to get there and we need a body to oversee this work. We can and must delegate certain powers to municipal authorities. However, just as we can’t delegate powers without providing money to support the regions, we can’t delegate powers without providing money to support the municipal authorities. Things will only get worse if we do so.

As for the draft document, I have certain ideas, not even suggestions but just ideas, about eight out of the total 15 items that it consists of, and I would like to go over them with you.

The first item is about the Federal Service for Veterinary Supervision and the Federal Service for Phytosanitary Quarantine Supervision. There are rules that should be uniformly interpreted across the nation. Second, Russia has joined the World Trade Organisation. This doesn’t mean that we should abuse these tools, but these tools are used to protect domestic markets in keeping with the WTO rules all over the world. We need to keep this in mind.

Next, sanitary and epidemiological supervision, state supervision over quality and safety of foods, materials and products should also be considered. Quality and safety are nationwide goals as far as I understand. This doesn’t mean that regional and local authorities can’t do this, but we just need to consider these matters once again.

My next point is about the technical oversight. As you are aware, I travel to essentially every place that is unfortunately struck by disaster or tragedy. The tragedy that happened in Kuzbass is partially due to poor technical oversight and  organisation. We need to be more careful about this. I believe that we cannot have different technical oversight standards in different regions, and we should make sure that standards are uniform across the country.

There are proposals to transfer responsibility for compliance with labour regulations to the regions. But we can’t have different regulations in Perm, Vladivostok, Khabarovsk, Moscow or St.Petersburg. We should have uniform regulations across the nation, especially with respect to labour relations.

Take, for instance, metrological monitoring, which is regional and inter-municipal in nature, including federal fire monitoring, which our colleague from Krasnoyarsk has already mentioned. We are talking about regional and inter-municipal nature of events, including fires. But fire knows no borders. It will spread from one region to another without asking for permission. In this case, we will be confronted with the dilemma of determining who is in charge of putting the fire out, regional or federal authorities? This issue should be addressed very carefully.

Much in healthcare oversight has been transferred to the regions, including healthcare itself and determining how healthcare institutions are set up. I think you have agreed that you can’t both perform the work and supervise it at the same time. This is also an important issue.

Lastly, an issue that seemingly doesn’t have much to do with federal authorities. Perhaps many people here will disagree with me. I’m talking about item 15, which goes as follows: legal regulation and provision of government services in the sphere of folk crafts. It seems like a minor issue. As you are aware, the popular art (I don’t want to be rude to anyone) will manage to survive on its own, whereas folk art, folk culture and crafts need to be supported by the government. By the way, this is the way it’s done in all countries. Certainly, we can transfer this responsibility to regional and municipal authorities. I suggest that you give it some thought. Thank you.