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Saturday, December 10, 2016

The sad government meeting: the indexation of pensions will not be all uzimam


At today’s government meeting discussed how even more “belt-tightening”. After analyzing the results of the first half, the officials decided the Economics didn’t work out as we would like. No money, as said the Prime Minister. The budget for 2017-2019 will be formed in conditions of austerity. The Ministers looking for reserves for reduction: unprotected article should be cut back by at least 5%. The social sphere is not touched, but on additional indexation of pensions will have to forget.


photo: Mikhail Kovalev

Anton Siluanov posing in the form of Stalin at the exhibition “Finance at the service of Russia” in 2012. But “father of Nations” is unlikely to succeed.

The Ministry of Finance honestly admit that the options are to impose a balanced budget, as required by the country’s leadership, a little bit. The hole in the 4 trillion rubles that formed all the obvious reasons, you can close in three ways – freeze costs to get the money in the Reserve Fund or increase revenues.

The last option, at first glance, appears to be the most preferred, but resources to increase revenues, frankly, a little bit. Dmitry Medvedev at a government meeting stressed that focus will be on case scenario, maintaining low oil prices (40$ later, said Finance Minister Siluanov) and the Western sanctions.

In such a situation, revenues can increase rapidly in only one way – to increase the tax burden on businesses. However, Vladimir Putin several times publicly promised to businessmen that this will not happen. In addition, this policy will lead to slowdown in the economy. And again this is contrary to the statements of the President, established the economic unit problem “through I can not” in the near future to reach 4% growth.

There are two other options – to freeze spending and use Reserve Fund. The Ministry of Finance, as it is known, provides record spending on this year’s level in nominal terms is 15,78 trillion In real then they should be reduced by 5% annually – the corresponding order Putin has given the government a few years ago, but it was not performed. And now comes the chance to exercise discipline.

Key question: how to reduce costs? Dmitry Medvedev on Thursday stressed that it will only be social programs. Funding for the state program “Social support of citizens” for three years, he said, will amount to 4 trillion rubles, and another 10 trillion rubles will be invested in the development of the pension system.

However, the promised doindeksatsii pensions for a further 8.9% in 2016 is still not take place. After analyzing the results of the first half, the officials came to the conclusion that the potential for increasing costs (and the increase would cost 159.4 billion rubles ) they have.

“Revenues decreased 12%, the budget deficit in the given framework can not hold” – lamented the Minister of Finance (after the meeting he gave comments to the journalists, stressing that in such a situation, the question about the indexing of pensions to today was not even on the agenda. (In subsequent years, the government, as you know, going back to the implementation of the law and increase the pension to the size of the actual inflation – but it according to the forecast, not to exceed 4%)

Another “sacred cow” has traditionally been expenditure on defence. Whether they will be subject to sequestration, will remain at the level of the current year or increase, Siluanov did not speak. According to him, the decision will later be taken “by the government”.

For all other state programs underlying the three-year budget, in charge of their departments in the near future will have to determine what to reject is not, and what can be sacrificed. First Ministers do it themselves. If not, then find inefficient spending them will help the chamber and the Ministry of Finance.

According to Siluanov, the challenge is to reduce 5% of articles that are not related to salaries and social benefits. After that, the last point put by the Prime Minister. Medvedev on Thursday announced that he would personally hold meetings in the main areas (industry, agriculture, transport, etc.) and called on Ministers ahead of those discussions, not to engage in lobbying. “The point is not to get dofinansirovaniya, although the departments for this always seek, and find resources to solve the tasks of state programs”, – stressed the head of the Cabinet.

Siluanov, in turn, explained that the first budget will be formed on a new principle – resources for priorities will have to be sought not through additional spending, and redistributing existing resources. “It’s a challenge!”- he said. Of course, will go under the knife and budgetary investments.

The government, according to the head of the Ministry of Finance will not allocate money for new construction projects, limiting funding has already begun. This line is known to have previously been approved at a meeting of the presidential economic Council in the Kremlin, although experts warned that the state’s investments are one of the main drivers of growth.

With regard to the expenditure of the Reserve Fund, Siluanov any figures, promising its full shallowing in 2017, called. However, was not denied “horror stories” that appeared in the media. In his words, “airbag” the state must be preserved in any case – for this is the freezing of budget expenditures and the rate on loans. Next year they will grow in 4 times to 1.29 trillion rubles.

Sanctions . Chronicle of events

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