10 december 2008

Prime Minister Vladimir Putin chaired a Government meeting

Vladimir Putin

Government meeting

"Government approved decisions on additional assistance to the citizens with mortgages. The idea is that we need a system of state guarantees to be provided through the Agency for Housing Mortgage Lending".

Vladimir Putin's opening address: 

Good morning, colleagues,

We have a packed agenda today, yet I'd like to focus especially on some issues.

Several days ago the Government approved decisions on additional assistance to the citizens with mortgages. The idea is that we need a system of state guarantees to be provided through the Agency for Housing Mortgage Lending, so that the people who bought housing with a mortgage but have lost their jobs because of the economic crisis, or lost a considerable part of their income due to decline in the operation of their companies, will be freed in 2009 from payment of mortgage loan interest, or payment of the principal debt due in 2009.

I am asking you to complete formal preparations for approving this decision. We have made the decision, but we need to elaborate clear rules related to the operation of the Agency for Housing Mortgage Lending.

The second issue concerns the use of maternity capital to pay mortgages. This norm should become effective in January 2009. We'd like everything to start working in the first half of January. Today we will consider the relevant bill and forward it to the State Duma.

In addition, the Government, as I have said before, plans to compensate the region's imputed losses from the latest tax innovations. I am referring to a reduction in the profit and small business taxes and an increase of the tax rebate for people buying housing to 2 million roubles. This will allow the people to save double the sum during the acquisition of housing compared to the old scheme.

This is why we have decided to turn over to the regional budgets an additional 0.5 percent of the profit tax and 100 percent of excise taxes on fuels and lubricants. The Finance Ministry has drafted the relevant amendments to the tax and budget codes.

Today we will also consider amendments to the 2009 federal budget. It has been proposed that state guarantees be affirmed at 300 billion roubles for loans taken by defence and other strategic companies. Another 150 billion roubles will be allocated for supporting the labour market and the manufacturing industries.

The next important issue concerns amendments to the law on education aimed at improving the mechanism of state assistance to people with children. In 2007, we started compensating a part of parents' spending on kindergartens. The regions receive relevant subsidies from the federal budget. You know that there were many questions on this issue during my latest question-and-answer session.

In my opinion, we should join forces with the regional and municipal authorities to increase the number of kindergartens. I repeat, the project is proceeding at a fast pace; we cut the queue for kindergartens by 30 percent last year. Thirty percent is not bad, but the task now is to keep up the pace under current conditions.

Just to remind you: compensation totalled 20% of the fee [for a place in a kindergarten] for the first child, 50% for a second child, and 70% for a third and subsequent children. Total funding under this programme should be 9.5 billion roubles in 2009, 10.2 billion roubles in 2010, and 10.9 billion roubles in 2011. So far compensations are provided only to those who attend state- and municipally-owned preschool centres. However, they make up an absolute majority, 5.4 million children.

But there are also private preschool centres which as many as 160,000 children attend. Many of these centres cater to children with special needs.

The parents whose children attend private kindergartens must also receive some sort of assistance from the state, and the bill we are presenting now should address this issue, mend the inequity.

In the future, we should create equal conditions and a competitive environment for state/municipal and private preschool centres, where budgetary allocations on kindergarten education and maintenance will be distributed through tenders based on municipal contracts.

The introduction of this scheme should help solve, or at the least ease, the problem of queues for kindergartens, as well as give the parents more possibilities to choose the centres that offer the best services.

We should also remember that the development of the private sector in education, including family kindergartens, is a niche where small and medium-sized business can work successfully and create new jobs. This is why we view the bill presented here as a first step towards stimulating non-state forms of preschool education and lifting administrative barriers that hinder their development. We will continue our consistent movement towards this goal.

Today we will also discuss draft decisions of the Government to allocate financial assistance as part of inter-budgetary relations. As much as 3 billion roubles is to be distributed among regions and cities that score the best results in reforming regional and municipal finance and introducing modern forms of result-oriented budget planning.

In addition, we need to make a decision on the allocation of additional subsidies totalling 19.6 billion roubles to the regions. This money should be used to maintain budgetary sufficiency in some regions, for the payment of salaries above all to the public sector staff, and as a solution for other problems.

Lastly, you know that we created a system of reacting to events on the global financial market and to global problems quite a while ago. In fact, there are two relevant groups.

One of them is led by Igor Shuvalov, who has recently been holding, on my instructions, industry conferences attended by the heads of ministries and departments concerned as well as by businessmen. We have held the final conference in the restricted format.

The social sector is monitored by Deputy Prime Minister Alexander Zhukov, who yesterday presented a routine report on the situation in the regions.

I believe it would be logical and necessary to unite these efforts, so that we will have a untied centre that will correlate social and economic processes, especially in light of the global financial crisis.

Therefore, I think we should create a united commission to be chaired by First Deputy Prime Minister Igor Shuvalov, which will take on the task of planning measures to ensure macroeconomic stability and strengthen Russia's financial sector.

The commission should coordinate efforts to stabilise commodity markets, including protective tariff and customs measures, encourage the supply of and demand for Russian commodities, support Russian producers, and draft and coordinate packages of anti-crisis measures in individual economic sectors that have been hit the hardest by the global crisis.

The commission should also take prompt measures to counter negative social trends, including the growth of unemployment.

I will sign a relevant instruction today, and ask the officials concerned to implement it without delay. In fact, work is already under way, and I don't think we need any special efforts or moves. What we need is to see the entire picture where events are taking place in the economy and the social sphere. We must not divide these problems, but promptly react to everything happening in these crucial spheres. This is what the Government is for.

So, let's get down to work.

More Information