The federal budget of Russia for the next year has passed first hearing in the State Duma and provoked an ambiguous reaction. In late November it should be considered by the Federal Council, and in early November in the AiF press-centre experts expressed their views on the main financial document of the country.
Alexander Kogan, the deputy chairman of the committee of the State Duma on budget and taxes
Decrease of financing of education, health care system, culture and social policy is heavily discussed. It won’t happen in 2012. Financing of education, health care system and culture is increasing. A slight decrease of financing of physical culture and sports, but we will amend it in the second hearing. Spending for national security, national defense and law-enforcement activity are growing. In 2012 serious increase of salaries of military men and the police officers will take place. it is a crucial step for improving image of police and military services and situation in the police, which was fairly criticized by people. The most important thing is that the housing problem is being settled. In 2012 grants for settlement of the housing problem of the police officers will be given.
The army will be re-equipped.
Inter-budget transfers will be withdrawn, as powers are re-distributed. The police are under federal control now, some decrease of education and health care system financing will be compensated by regional budgets. Spending indexes become less in the regions of the Russian Federation.
We are going to develop excises issue. I can tell you that we have low excises on cigarettes, alcohol, and beer. It is reasonable to increase tax on natural resources production, as gas prices have increased dramatically, while mineral extract tax is not changing. It should be defined by oil and gas prices at markets. MET on gas is not flexible. It is reasonable to reconsider it. Potential in this sphere is serious, I mean revenues.
As for deficit in 2012, we have sufficient resources for its amortization. First of all, it is reserve fund of Russia. Secondly, foreign credits are possible. Everything depends on the situation in Europe, America and Asia. We will follow it.
Vadim Dubinkin, the head of the summary department of the Russian audit chamber
Unlike previous years, the budget was formed relying on positive forecast on high oil prices: about $100 per barrel. In 2012 - $100, in 2013 - $97, in 2014- $101. Previously the budget considered conservative appraisals of oil prices. In 2011 it accounted up to $58 per barrel, later the budget was reconsidered in favor of increasing up to $75 per barrel, in June is became $105 per barrel. $30-growth is serious. We didn’t expect such growth. At the moment final amendment for the budget 2011 was adopted, it increases oil price from $105 to $108 per barrel. One of risks of macroeconomic situation is budget stability.
Crisis phenomena develop in European and world economy. It leads to additional risks referred to providing macroeconomic stability, inflation rate, economy growth tempo, currency policy in mid-term prospect. Revenues of budget depend on it, as a half of them are formed by tax on oil and oil products.
The government controls the situation. It understands and prepares for negative scenario of economy development.
The next moment is that it is the fifth budget, which is formed by the Russian government in the context of serious reforms’ launching. In 2012 shift of budget and state institutes from estimate financing to giving grants will be implemented, as well as the reform of services accomplishment. The government supposes that it will increase quality of service and decrease heavy net in budget sector of economy. The ministry of defense and the internal affairs ministry will get decreased financing. Moreover, the police will give duties on social security to federal structures. There are certain risks on providing these reforms: have we estimated our spending accurately? Won’t we need additional resources for some services?
Vladislav Inozemtsev, PhD (economy), the dead of the Postindustrial Society Institute
Number of budget places in the system of education is increasing. I think demographic fall will enable decrease of number of students, which is also normal. The main point is that spending for the system of administration and law-enforcement system is immense. In 2011 the budget spent 844 billion rubles for necessaries of the federal government. If we extrapolate our spending, we will see that next year we are going to spend on out government more than the USA on their government, while the population of the US is twice greater than Russia’s.
Effectiveness of spending money by government should be improved. I think there are many opportunities for saving budget resources and improving effectiveness of their usage.
In the USA and some European countries governments spend large sums of money for serious technology projects: high-speed traffic, alternative sources of energy and so on. We invest in new technologies within the project Skolkovo and other projects. It is new technologies. However, we won’t see their commercialization in the nearest future. If we look at the US export, export of technologies, patents and licenses accounts up to 4%. They cannot rely on it only. Technologies should be implemented in industry, and we spend too less sums on it.
VK
