Macroeconomy

State Duma deputy from the Fair Russia A.A. Remezkov told how to save the National Welfare Fund and to increase budget spending on pensions, public sector, healthcare

Alexander A. Remezkov, State Duma Deputy from Spravedlivaya Russia. Photo: spravedlivo.ru

On December 14, 2016 Federation Council of Russian Federation approved the federal law “About Federal Budget for 2017 and the planning period of 2018 and 2019 years”. For its adoption voted 155 of the 170 senators.

Since the submission of the main financial document of the country, prior to its adoption by the State Duma in the draft law “About Federal Budget” 301 amendment were introduced and approved from subjects of legislative initiative and 7 members of the Federation Council. Upon further consideration of the budget, the Committee of Federation Council recommended a number of additional changes. In particular, it proposed to consider an increase from 25 billion rubles to 50 billion rubles of the budget appropriations for the creation of new places in educational institutions in the regions in 2017. The Committee also believes that it is necessary to consider increasing the amount of budgetary credits to regions. An amendment of this kind is already making before, but it was supported only partially – the volume of loans has been increased from 100 billion rubles to 200 billion rubles instead of the proposed 300 billion rubles. In total, the senators decided to monitor the situation of implementation of the budget in the regions during 2017 and, if necessary, to recommend to the Government provide them with financial assistance from the federal budget.

The new budget is based on a conservative forecast of development, it has turned out not unambiguous. The State Duma adopted it by efforts of one party – United Russia. At the same time, the opposition refused to support this document. Here is the comment of the new budget and the reasons for it not to maintain, by a State Duma deputy from Fair Russia Alexander Remezkov:

Remezkov A.A: In general, in the new budget nothing has changed conceptually. It remained not even a budget of stagnation but budget of the falling Russian economy.

There are several significant, but unresolved problems. First of all, concerned about the issue with the budgets of regions. They have to give one percentage point from the rate of income tax and credit it to the federal budget over the years 2017-2020. The loss of the subjects from this will amount to 118 billion rubles. The Ministry of Finance argue this step by necessary for leveling the income of poor and rich regions. It is to be hoped that the Ministry of Finance has calculated all the consequences of this redistribution clearly, and the rich regions, which are the donors, will not turn into regions – recipients. In addition, from the regions share of proceeds on excises on oil products further seized due to redistribution of ratios enrollment at different levels of the budget system. It will also lead to the loss of the RF subjects of 91.6 billion rubles.

Also, the Government is going to spend 668.2 billion rubles from the the National Welfare Fund (NWF) to cover the federal budget deficit. And this despite the fact that he had no legal grounds to do so – it is prohibited by the Budget Code. It turns out that because of the reluctance of the government to change the economic, budgetary and tax policy, to patching holes in the budget the money of Fund sent that was established for the development of the pension system and the priority investment projects, as the collective guarantor of the well-being in the future and a source of long loans. In this case they do not want to cancel the benefits for exporters of oil and gas.

In the alternative budget our party proposes to abolish VAT privilege for raw materials exporters. After all this privilege was originally conceived as a support for companies exporting high-tech products rather than raw materials. Here, for example in 2017 the privilege for exporters of raw materials will be 1.9 trillion rubles (in 2016 – 1.7 trillion rubles) – and that the net loss of the federal budget. And redistribution of the tax burden would have brought additional 1.6 billion rubles to the budget system of the RF on the proposals of the Fair Russia faction in terms of reducing the VAT from 18 to 16%, the introduction of a progressive scale of personal income tax, tax relief on profits.

1.05 trillion of that money could be spent on replacement of use of the National Welfare Fund, to increase the volume of provided budgetary credits to the subjects of the Russian Federation and the prolongation of the previously granted budgetary credits. The remaining funds would have allowed to increase spending. In particular, we were requested to send an additional 273.3 billion rubles for a lump sum payment to pensioners, 47 billion rubles – to increase salary of public sector employees in accordance with the May presidential decree, 60 billion rubles – on preferential credits for industry, 40.6 billion rubles – on health care. In addition, we could greatly support the RF subjects. For this we proposed to allocate additional funds in the form of grants for the replacement of part commercial loans in the amount of 63.8 billion rubles, prolong previously issued budgetary loans amounting to 229.5 billion rubles, to increase the amount of provided budgetary loans for 150 billion rubles. That is totally offered to support subjects on 443.3 billion rubles.

But all this has not been done. Therefore, our party could not support this budget.