26 january 2012

Prime Minister Vladimir Putin chairs a Government meeting

At the Government meeting, the prime minister promised that pensions will increase by 7% instead of the planned 6.1% as of February 1 this year.

Vladimir Putin's opening address:

Good afternoon, colleagues. Before discussing the agenda, I'd like to speak about a very sensitive social issue – pensions. You know that we increased military servicemen's pensions by 60% as of January 1. You also know that this was a long overdue issue, as military pensions have seriously lagged behind the adequate level and some retired military have even preferred to switch to civilian pensions. We have now increased them by 60% – which was long overdue – and have a 28% gap between military and civilian pensions. During the Soviet era, the difference was between 22% and 25%. Today, it is 28%. We need to gradually bridge this gap. Although we cannot do this overnight, we will move in this direction step by step.

I'd like to say the following in this context. We plan to adjust pensions for inflation as of February 1. Strictly speaking, we must adjust them by 6.1% by law. However, we stated on numerous occasions last year that the first adjustment will be 7% rather than 6.1%. Moreover, we have set aside the required funds in the budget for this purpose. Thus, I suggest that we should do what we promised – and adjust pensions for inflation by 7% as of February 1. We may further adjust this figure in conformity with the law for the entire year. The difference between 6.1% and 7% is small. First, we will gradually move towards closing the gap that I mentioned. Second, this is still something. People will receive these sums soon, even though they are small. For the budget, this means spending an extra 1.3 billion roubles. We have these funds, so let's do this.

We will increase pensions again on April 1. This applies to social pensions as well. They will increase by 14.1% in one go. Let me emphasise once again – we have sufficient funds in the budget to do so. Let's do this promptly and without mishaps.

Now I'd like to say a few words about the agenda. I have just been to the Federal Migration Service – maybe you know it. We discussed new requirements to migration policy. This is a sensitive issue with major public repercussions. Today, we will review a labour migration cooperation agreement with Azerbaijan in the context of our recent discussion. Let me add that in view of the Common Economic Space and the Eurasian Union's future formation, we will move to the unification of our migration laws and hope to arrive at coordinated visa and migration policies. In this regard, we must make the relevant decision – and harmonise our relations with Belarus and Kazakhstan within the Customs Union and the Common Economic Space.

Today, we will also discuss Russia's accession to the relevant Convention of the International Labour Organisation (ILO). Our national legislation provides for the protection of the working people in the event of their employers' bankruptcy. The same applies to delayed salary payments. These debts must be paid off to the working people first and foremost. Our international commitments will buttress our domestic legislation's guarantees. In the past few years, we have signed a whole package of ILO legal documents. This will benefit our labour legislation, consolidate the rights and guarantees of the working people and give labour unions more opportunities to enforce these guarantees and uphold employee rights.

The next item on the agenda directly concerns our economic and industrial recovery – tax incentives for investments in modernising production and R&D. What am I referring to? Today, an enterprise receives a tax rebate – a bonus depreciation – for channelling funds into modernising production or R&D.

However, if this enterprise sells its upgraded basic assets or the results of its R&D, it is obliged to "return" this bonus and pay a profit tax. Needless to say, this norm impedes the development of those industries that require regularly upgrading their basic assets. This happens because after investing in R&D, high-tech business and products, the investor in question cannot quickly sell them at a profit, thereby stockpiling resources for the next step in R&D and new production lines.

At the same time – and I would like to draw your attention to this point – we must take a very close look at the procedures for granting the benefits that we plan to introduce. It is important to prevent dishonest entrepreneurs from abusing the tax preference by inventing some shadowy schemes and selling one and the same thing several times. I would like those people who are elaborating this norm to pay attention to this issue.

Finally, I'd like to mention a humanitarian, interesting and useful sporting event. The World Combat Games of Martial Arts will take place in St Petersburg in October 2013. This will be a major event. We will host 2,000 athletes, official delegation representatives and thousands of fans from all over the world. We must hold these games befittingly, at the proper level. We must establish a steering committee for these games to resolve all organisational issues.

Let's start working.

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