News – Russian Government

News – Russian Government
News – Russian Government

On the agenda: drafts of the federal budget and budgets of state off-budget funds, forecast of socio-economic development, main directions of the unified state monetary policy for 2023 and the planning period of 2024 and 2025.

Introduction by Mikhail Mishustin

Report of the Minister of Finance Anton Siluanov on the draft federal law “On the federal budget for 2023 and the planning period”

From the transcript:

M. Mishustin:
Good afternoon, colleagues!

Government meeting

The government is finalizing the draft budget for the next three years. Today we will consider a package of documents that are related to its formation, including the forecast of socio-economic development, the budgets of two state extra-budgetary funds and a number of others. The Bank of Russia will also present the Main Directions of the Unified State Monetary Policy.

Meeting participants

  • List of participants in the Government meeting, September 22, 2022

We will pay special attention to the fulfillment of the President’s order to finance measures in connection with partial mobilization. The head of state instructed to take measures to meet the needs of our Armed Forces and military formations.

In the process of finalizing the main financial law, it is necessary to take into account all the points that are important for the country. This is a responsible job, and it needs to be done as quickly as possible. The overall result will largely depend on our joint efforts.

Information is an important component of the partial mobilization announced by the President. I ask my deputy Dmitry Nikolayevich Chernyshenko, together with the Ministry of Defense and other interested departments, to organize this work as soon as possible using the available information resources, including “Explaining.rf”, so that everyone can get answers to their questions.

Now to the agenda. The draft budget takes into account many challenges. Large-scale sanctions were imposed against Russia, which required the development of quick and prompt response decisions, additional measures to support the most affected industries and vulnerable categories of citizens, the launch of the transformation of many business processes, and the renewal of logistics and trade chains.

During the preparation period, the Government worked out in detail all possible risks, received the approval of the President on the main parameters.

As a result, the draft budget combines the best solutions for the current situation. It guarantees the fulfillment of all social obligations of the state to the people. It contains resources for strategic tasks, which the President has identified in the form of national goals. Over the next two years, it is planned to allocate approximately 3 trillion rubles annually for the implementation of national projects.

Now specifically about those documents within the framework of the package sent to the Duma, which we will discuss today. I’ll start with a forecast. It involves the effective implementation of measures to restructure the economy and its adaptation to new conditions, including the reorientation of exports, closing production chains within the country, ensuring technological sovereignty, as well as pursuing a balanced budget policy with a level of government spending sufficient to maintain domestic demand.

It implies a transition to strong economic growth in 2024 at a level above 2%.

The main parameters of the budget were formed on the basis of the approaches approved at the meeting with the President, and take into account proposals for additional income that were worked out on his instructions.

As a result, we expect total revenues in 2023 to exceed 26.13 trillion rubles. In nominal terms, this is less than this year, but significantly more than in the previous year, when the economy was affected by the processes associated with the coronavirus.

Expenses will slightly increase compared to this year – up to 29.056 trillion rubles.

Throughout the period, the budget will be in deficit. Government borrowings will be the main source of its coverage.

As for the draft Guidelines for the unified state monetary policy for the next three years, it will be presented by the Chairman of the Central Bank, Elvira Sakhipzadovna Nabiullina.

Today we will also consider the parameters of extra-budgetary funds, through which the fulfillment of social obligations to citizens will continue.

We have provided the necessary funds to provide free medical care throughout the country. The planned expenditures of the Compulsory Medical Insurance Fund exceed the volumes of the current year by more than 10%. Financing has been increased to support the sustainable operation of regional hospitals and polyclinics. Public investment in the provision of high-tech treatment, including in federal clinics, will increase.

Significant amounts have also been allocated for in-depth medical examinations and the development of rehabilitation programs initiated by the President.

Now let’s talk about the Pension and Social Insurance Fund, which from next year will combine the functions of two existing funds.

At its expense, the provision of pensions, various compensations and payments, including benefits for temporary disability, pregnancy and childbirth, as well as for families with children, will continue.

On behalf of the President, the Government is building an integral system of support for them. Parents who find themselves in a difficult financial situation, pregnant women can receive monthly financial assistance from the state, depending on the individual financial situation of citizens and the age of the child.

Government meeting

From January 1, it is proposed to introduce a universal allowance for low-income families. It will combine a number of existing social protection measures, including payments that are provided in connection with the birth or adoption of a baby and up to the age of three, as well as for children from 3 to 7 years old and from 8 to 17. It will also be assigned to those in need women registered in early pregnancy.

To apply for such a universal allowance, it will be necessary to submit only one application without additional certificates. This can be done both through the public services portal, and personally through the MFC or the Pension and Social Insurance Fund, if this option is preferable for a person.

The state will provide truly unified and comprehensive targeted support from the early stages of a woman’s pregnancy and as the child grows up. It will affect families with about 10 million children.

Let’s move on to the discussion.

Anton Germanovich Siluanov, Minister of Finance, will present a draft federal law “On the federal budget for 2023 and the planning period.”

Please, Anton Germanovich.

A. Siluanov: Dear Mikhail Vladimirovich! Dear colleagues!

The draft budget has been drawn up taking into account the parameters of the macroeconomic forecast, which takes into account the gradual recovery of the economy and the achievement of sustainable positive growth rates as early as 2024. The draft budget takes into account the normalization of budget policy and the gradual transition to budget rules in 2025, which provide for a primary balance of the budget. What it is? Revenues will be equal to expenditures, excluding the cost of servicing the public debt. At the same time, the income calculation takes into account basic oil and gas revenues in the amount of 8 trillion rubles, and everything that comes in excess of basic oil and gas revenues will be sent to the National Wealth Fund. This will reduce the budget deficit from 2% of GDP in 2023 to 0.7% in 2025, and the deficit excluding oil and gas, the so-called non-oil and gas deficit, from 7.9% in 2023 to 5.7% in 2025 year. That is, we are reaching a fairly stable safe level in this indicator.

To achieve these parameters, measures have been taken to increase the revenue side of the budget. Relevant tax innovations have been prepared, and measures have been taken to prioritize expenditures.

The tax proposals take into account the fair withdrawal of part of the natural resource rent, which has increased as a result of changes in world commodity prices.

What are the key offers. Raising export duties on pipeline gas, withdrawing additional revenues from liquefied natural gas producers, introducing an export duty on fertilizers and thermal coal if prices for these products remain high, increasing taxation of the oil industry by maintaining the damper mechanism refined this year and adjusting the calculation of production tax mineral.

A number of other tax innovations are envisaged. They have all been submitted by the Ministry of Finance to the Government of the Russian Federation, and they would be asked to consider and include them in the budget package for submission to the State Duma.

Expenses. In terms of spending, the priorities were determined in the messages of the President of the Russian Federation and decisions of the Government.

This is the full provision of social measures to support families with children, pensioners, public sector employees; continued implementation of such important programs as the payment of maternity capital, mortgage programs, including family mortgages and rural mortgages; measures to create new places in educational institutions and repair schools. By 2024, more than 1.5 thousand schools and more than 1 million school places will be put into operation. For all this, the necessary resources are provided.

In particular, programs such as Primary Link for Everyone will continue. This will make it possible to modernize more than 5,000 healthcare organizations.

Resources are also provided for the creation of seven new world-class campuses. Significant funds have been allocated to support the industry, which will create capacities for the production of products previously imported from abroad.

Measures are envisaged for the creation of new capacities in microelectronics, aircraft manufacturing and other sectors of industry.

It is impossible not to dwell on the continuation of infrastructure development programs. The road five-year plan is provided in full with sources of financing.

Money is also provided for a new project – the development of ground electric transport. The sources for the new program “Modernization of housing and communal services” are also indicated.

Measures to support the regions have also been preserved. Subsidies to equalize budgetary security will be indexed at a level not lower than forecast inflation. Next year, subsidies for equalizing budgetary security, which creates a revenue base for regions that need state support, will be increased by 8.5%. The provision of infrastructure loans and measures to restructure loans previously granted from the federal budget will continue.

A few words about the sources of financing the deficit and the volume of the National Welfare Fund. We focus on internal borrowing. This year, after volatility in the financial market, we are starting to place government securities. Next year we will do this more actively, as we plan that the capacity of the financial market will increase. In this regard, we will adjust the upper limit of borrowings for the next two years in such a way as to minimize the use of the NWF, and attract more resources from the financial market. Ideally, we plan to stop using the NWF for borrowing purposes altogether. Funds from the National Wealth Fund, after reaching the required level, which will ensure budgetary stability and reliability, will be directed to the implementation of infrastructure projects.

In conclusion, I would like to draw attention to the bills that have been submitted to the Government and are an integral part of the budget package. In addition to changes in tax legislation, amendments have been prepared to the Budget Code, the law “On the Basic Cost of the Necessary Social Set”, “On Compulsory Pension Insurance” and a number of others.

Please support the draft budget and the legislative initiatives introduced along with it.

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