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The budget passed the first reading
State Duma deputies adopted on Friday in the first reading the draft law on the federal budget for 2008-2010 . They accepted it despite all the reproaches: both private ones - regarding the weak development of social aspects, and global ones, questioning the need for three-year budget planning. The document was supported by 319 deputies, 81 were against it, and 27 abstained. Finance Minister Alexei Kudrin, who presented the document, called the adoption of a three-year budget for the first time in Russian history a historical event . According to him, long-term planning seriously increases Russia’s chances that it will finally be able to jump off the “oil needle.”Economic growth in the next three years, as the minister expects, will be driven by the development of industry, production of goods, services and innovative types of products. The minister is pleased with the ongoing de-dollarization of the economy and the growth of direct investment. The GDP growth rate, however, will decrease slightly. If over the past years the economy has grown by an average of 6.7%, then for the coming years the Ministry of Finance predicts only six percent growth. As Alexey Kudrin admitted, this is due not only to the fall in oil prices, but also to the shortage of infrastructure and labor resources.
True, now economic growth must move from the categories of “quantitative” to “qualitative”. As the Minister of Finance explained, the share of innovative products should seriously increase: over three years from 4 to 15% of GDP, revenues from technology exports will increase by 50%. In addition, the level of inventive activity will more than double.
According to the minister, in the next three years everything will be done to improve the standard of living of the population. Thus, government spending, including for these purposes, will grow at an accelerated pace: if this year they amount to almost 5.5 trillion rubles, then in 2008 it will already be 6.6 trillion rubles, and in 2010 - 8 ,1 trillion rubles.
The three-year budget provides for a serious increase in pensions. The basic part of the pension in 2008 will increase from April 1 by 7% and from August 1 - by another 14%. In 2009, indexation from April 1 will be 6%, and from October 1 - 18%. This will make it possible by 2010 to increase the average size of the basic pension to 5,105 rubles. In addition, it is planned to increase military salaries. From September 30, 2008 by 15%, from August 1, 2009 - by 6%, from January 1, 2010 - by another 6%. Spending on health care will increase next year by 5%, on education by 11%, on culture by 22%.
The minimum wage will be raised to the subsistence level by the beginning of 2011. According to the Ministry of Finance, there should be fewer poor Russians whose incomes are below the subsistence level - 15 million people in 2010, while in 2003 there were about 30 million. Salaries on average across the country should increase by 94%. The average salary will be just over 20 thousand rubles.
Preliminary discussion of expenditure items with factions on the eve of the first reading, apparently, brought them some dividends. Both "Russia" - "United" and "Fair" - insisted on increasing funding for social items. The Ministry of Finance agreed to some concessions. As Alexey Kudrin stated, by the second reading in the budget, for example, issues of youth support related to the indexation of scholarships and the development of educational loans will be finalized.
“This is a budget of dreams come true,” United Russia members summed up. Representatives of other factions, however, did not agree with this statement. The budget was criticized for the fact that more and more powers for financing national projects are being shifted to the shoulders of the regions, for insufficient financing of “maternity capital”, etc. Traditionally, the Communists criticized the Ministry of Finance the most, calling the presented document a budget “not even of stagnation, but of further stagnation.” As Gennady Zyuganov said, “the country needs creation, real renewal, not simulation.” Therefore, the leader of the Communist Party of the Russian Federation suggested that Mr. Kudrin be “retired.”
LDPR leader Vladimir Zhirinovsky, together with communists and deputies from the Rodina - Patriots of Russia faction, proposed not to freeze money in the Reserve Fund (from 2008 it will become the “successor” of the current stabilization fund), but to spend it on roads, scholarships, pensions and culture . And Nikolai Bezborodov from the “Patriots of Russia” faction compared the government’s proposed budget, in terms of its impact on the economy, with “a tired, poorly moving person who is being overtaken by everyone.” Alexey Kudrin could not agree with this and objected that Russia personally reminds him of an athlete who runs and overtakes others, albeit on doping made from oil and gas.
Critics of the budget were found not only among deputies. Chairman of the Accounts Chamber Sergei Stepashin, in particular, noted that one of the main shortcomings of the draft budget is the lack of criteria for the effectiveness of investment of funds and responsibility for their ineffective use. “Financial needs are determined not by the real situation and efficiency standards, but by the level of financing still achieved,” he complained.
The budget is due to be considered in the second reading on June 29. Deputies are expected to prepare dozens of amendments for this day. However, as Alexey Kudrin has already warned, he does not intend to make further concessions.