People already receive a benefit for caring for their first child up to one and a half years. But in the second quarter of 2017, it was slightly higher than 3,000 rubles / Evgeny Razumny / Vedomosti

Vladimir Putin, who has not yet announced his candidacy for president, has already promised gifts to the population. From 2018, new benefits will be introduced for families with children, a mortgage subsidy program will be introduced, and maternity capital will be extended. The cost of the gifts is more than 200 billion rubles. The money has already been included in the draft budget for 2018–2020 – in the presidential reserve.

The measures should stimulate the birth rate, Putin explained. After the baby boom of 2000, it began to fall: in January-September 2017, it practically did not grow in annual terms, and the natural population decline exceeded 100,000 people against a natural increase of 18,000 people for the same period in 2016.

Money for the first child

Starting in 2018, families that have given birth to their first child will receive a monthly subsistence minimum for the child until the child turns one and a half years old. This minimum is different for each region, but on average it will exceed 10,000 rubles in 2018–2020. The assistance will be targeted – only poor families will be able to count on the benefit. In total, the government will spend more than 144 billion rubles on this.

The state will start paying for the birth of the first child

Politics / Social Policy

It is unclear who should be considered poor, admits a federal official: without a unified registry of people and households, the real structure and level of poverty is unclear. It is possible to do without a registry, argues Tatyana Maleva, director of the Institute of Social Analysis and Forecasting at RANEPA: we are talking about people who do not have enough money for current consumption. If a family's income is less than 1.5 times the subsistence minimum, it can be included in the program, she says. In the first half of 2017, 14.4% of the entire population had incomes below the subsistence minimum.

People already receive a benefit for caring for their first child up to one and a half years. But in the second quarter of 2017, it was slightly higher than 3,000 rubles. The new benefit could become a serious measure of support, Maleva believes: many people even receive wages below the subsistence minimum, and families cannot decide to have a second or third child, let alone a first. The number of families with two or three children is growing faster than families without them, she says. For a family in a region that is on the verge of poverty, this is a very big help, another federal official agrees.

Capital for drinking?

Another measure is the extension of the maternity capital program until the end of 2021 (earlier it was supposed to end at the end of 2018). The purposes for which such money can be spent will also be expanded: families in particular need will be able to receive monthly payments (the same amount as the new benefits for the first child) until the child is one and a half years old. The capital can also be spent on nannies caring for children.

Looking into the demographic pit

Opinions / From the editors

The measure could turn the program into a new benefit, the official is skeptical, but it will not be spent on children, but drunk away. Currently, of the three possible goals - the child's education, improving housing conditions or replenishing the mother's funded pension - the money is most often spent on housing. But not every family needs and can afford it, argues Maleva: with the crisis, incomes are falling and many do not have enough money even for food. "Some families can really drink away their capital, but do we have 146 million alcoholics?" she says, wondering why everyone should suffer because of problem families. Many have long asked to allow spending money on crèches, says Maleva, however, without building new crèches, the measure may not work, she warns.

Mortgage at 6%

Modernization for children

RUB 50 billion will be allocated for the reconstruction and re-equipment of children's clinics. The situation with hospitals is already almost critical: 31% of hospitals and clinics have no running water, 35.5% have no sewerage, 40.5% have no central heating, according to data from the Accounts Chamber. According to its calculations, in 13 years, without the allocation of funds for renewal, more than 70% of medical equipment will be impossible to use

For wealthier families, the government will revive the mortgage subsidy program. For those who have a second or third child since 2018, a program to subsidize the mortgage interest rate will be launched. When buying housing on the primary market or refinancing mortgage loans, they will be able to count on a subsidized rate of over 6% per annum for three years from the date of issuance of the loan at the birth of a second child and five years for a third. Currently, the average mortgage rate is 10.5%, according to Central Bank data, so the state will take on more than 4% of the cost of the loan. In 2018-2023, the program may cover over 500,000 families, Putin cited an estimate from the Ministry of Construction. The cost of the program is 10 billion rubles, the official says.

In 2015–2016, a subsidy program at 12% per annum was already in effect (the state compensated the borrower for the difference between this amount and the bank rate). Anyone could use it, but only for an apartment in a new building. The share of loans issued with its help exceeded 35% in the banking system, recalls Vadim Pakhalenko, director of the mortgage lending department at TKB Bank. But the new program will have a smaller audience, he believes, the number of loans to such families will not exceed 7–8%. Banks will be able to increase their client base, Pakhalenko hopes, but the main limitation of using subsidies is the cost of real estate.

The Ministry of Finance is preparing a mortgage at 6%

Finance / Banks

Effectiveness vs. Efficiency

The program was designed to support the economy, Economic Development Minister Maxim Oreshkin explained to Vedomosti. There are several channels – increasing the economic activity of young women, reducing poverty and changing the structure of domestic demand, stimulating demand for real estate, supporting the construction industry, he listed.

These are all impressive measures, but they are aimed at the wrong thing, says Maleva: the abnormal demographic situation is not due to the low birth rate, but to the high mortality rate. But solving this problem is more difficult, she says, a benefit for the fact that a person did not die has not yet been invented, it is necessary to improve healthcare, the quality of medical services, and popularize a healthy lifestyle. The proposals are election promises and a desire to suppress the sentiment that the state does not care enough about people, says political scientist Grigory Golosov. Polls show that Russians put forward this as a personal complaint against Putin, he continues, and the measures should show people that this is not the case. The feeling that the state does a lot for everyone will appear, agrees Maleva, but in practice, a small number of people will receive preferences.

How much will the new birth rate stimulation program cost?