3 april 2013

Dmitry Medvedev chairs a meeting on key elements of budget policy in the social sphere for 2014-2016

Dmitry Medvedev’s opening remarks:

Ladies and gentlemen, we are continuing our series of meetings on forming the budget for the next three years. It is now April and it is time to plan for the three-year budget cycle and discuss a number of other issues. At yesterday’s meeting in Yakutsk we discussed the development of the global and domestic economy. We emphasised the need to ensure more robust GDP growth. I look forward to your proposals for achieving this, taking into account yesterday’s meeting and today’s agenda.

Today we’ll speak about the funding of several spheres, mostly belonging to the social area – education, culture, healthcare and sports. I’d like to emphasise straight away that we must meet our commitments in this sphere by all means – in full and on time. Anything less is unacceptable.

The federal budget allocates a substantial sum for these spheres this year – more than five trillion roubles. We will raise salaries of workers in the fields of education, culture, healthcare, social services and science; increase scholarships for first and second-year university students – those who need money (in accordance with current rules); develop a network of leading universities; replenish state research funds; make monthly payments to families for the third child and each subsequent child until the age of three; develop projects on cultural heritage, filmmaking  and other areas that I have repeatedly discussed with you.

We must continue developing a network of perinatal centres and reducing the death rate for the main causes of death – cancer and cardiovascular diseases. We’ll also talk about the funding of preparations for the FIFA World Cup in 2018.

We must analyse the structure and content of the budget’s social sections, direct funds toward policy priorities and streamline spending.

Naturally, we should look for internal reserves as well. I’m referring to the ratio of administrative officials to core staff – teachers, doctors and nurses and cultural workers.

We must continue to transition to online document management and streamline energy supplies to all agencies. Regrettably, for the time being these are permanent issues and we have a great deal to do here.

Secondly, we must analyse how efficiently state property is being used, federal property above all. We must check whether organisations that own such property are performing their functions properly and whether they are duplicating each other’s functions, as we have discussed on more than one occasion.

Third, we must attract extra-budgetary funds and introduce private-public partnerships on the largest possible scale.

Under the strict budget rule we must continue to make federal spending more efficient in order to achieve key socioeconomic targets.

Thought strict, the budget rule has an obvious plus. In addition to its goal, it should encourage us to be more attentive to internal reserves in all industries, which we’ll discuss today. We must use these reserves for their operation and development. We must find the best administrative solutions – this is what the Government is meant to do.

Let’s start our discussion.


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Deputy Prime Minister Olga Golodets answers journalists’ questions following the meeting

Question: Will you please tell us about the outcome of today's meeting?

Olga Golodets: Today, the prospects of social area development were discussed. There are many outstanding questions regarding the funding of those needs that exist in our social area, primarily as far as education is concerned. These include pre-school education development, supporting university education through campus construction, and supporting global education. We have numerous projects with no reliable funding, and our meeting today focused on developing the social sphere and also on searching for resources to secure the necessary funding.

Question:  Going back to your morning speech (at the 14th International Scientific Conference on Development of the Economy and Society), how large is the so-called “gray” labour market in Russia? And how does this affect the economy? What needs to be done in this regard?

Olga Golodets: Rosstat (Federal Service for State Statistics) statistics estimate the gray labour market at around 15-20 million people. We have 48 million taxpayers today of a productive age. I am referring to those people who pay premiums to the Pension Fund and social funds.

The difference between 48 million taxpayers and 86 million people of a productive age is quite large. This includes a group of people who do not work for understandable reasons – women taking care of their children and army conscripts... The state is bound to pay for these categories and it does and it will pay in the future. However, there is a large group of people who do not pay tax today, and there arises a justifiable question – who supports those people?

Question:  How can this be stopped?

Olga Golodets: There are various ways to stop it.  But if everyone starts paying in our country, the pensions will automatically increase 1.5 times, which is quite significant for pensioners.

Question: Can we estimate the losses due to this underpayment?

Olga Golodets: Yes, sure! We underpay people who are now retired, that is, our parents. They could receive at least 15,000 roubles as opposed to 10,000, and that would make a big difference.

Question:  Does the Government plan to take measures to solve the problem?

Olga Golodets: Yes, we are discussing such measures, and we are doing this with the civil society as well, as this should become society’s position in the first place.

Question: Can you be a little more specific about the proposed measures?

Olga Golodets: The Ministry of Finance, for example, has introduced a measure that limits the turnover of cash in the financial sphere, so they are basically financial and economic measures.