In the coming Putin’s decree could be a signal to the West

Immediately after the next inauguration of Vladimir Putin promised the signing of a decree on the increase in public expenditure on health, education and infrastructure. Some say that we are talking about an additional 10 trillion virtually any, others call 8 trillion. Speaking with the official press Secretary of the President Dmitry Peskov, confirmed that the decree is almost ready, let it be understood that in the figures, appeared in the media overkill. In any case, if we are talking about trillions of virtually any, it can be argued that the decree makes a big difference in our economic policy.

photo: Alex geldings

Until now, the growth of social spending although was (especially when it allowed the oil market), but never a priority was not. The may 2012 Executive orders a step in the same direction, but it was primarily about the public sector wages, not the growth of expenditure on education and health.

It is considered that we carried out liberal economic policy and with hardly a human face. Indeed, social differentiation has reached embarrassing for the government, under the Constitution, call themselves the social scale. But it is difficult to call liberal policies, which led to the increase of state interference in the economy.

Now, in any case, the human face on the economic course should appear more clearly. And as with liberalism with all the conventions of the labels? The mastermind behind the new decree should be recognized Alexei Kudrin. It is the strategy of economic development of Russia 2018-2024 years, trained in his CSR, call priority direction of growth of government spending on education from 3.5% to 4.4% of GDP on health care — from 3.1% to 4.0% was on infrastructure from 2.5% to 3.0%. Himself Kudrin has recently said that the growth of expenditure on education should reach 750 billion for virtually any six years.

But with the new decree more difficult. It is prepared based on the election of Putin’s Message. But the Message was one chord, which is now somehow does not sound. The President set the task to increase one and a half times GDP per capita. Economic growth is the main source of funds for the growth of government spending, including on health education and infrastructure. But in order to achieve this goal, according to Kudrin, it is necessary to provide annual growth of 6%, i.e. the Chinese level. While these growth rates are nothing which heralds are silent about them and the available forecasts.

It is a vicious circle: a sharp increase in social spending is expected to accelerate the growth of the economy, but also to the growth of social spending needs, economic growth, and it is not. Apparently, therefore, the implementation of the forthcoming decree is transferred for the second half of a six-year presidential term. It is de facto recognition that while the means for its execution is not. Will they then question.

Search of money — the main thing in the preparation and especially in implementation of the decree. If by 2020, the economy required growth rate does not show remains of four sources: oil revenues, expansion of borrowing, reducing other expenditures and tax increases. Oil is not a fail. So much So that there are already assessment, in which the Federal budget for 2018 will remain in surplus. The oil source can be deepened, if we change the fiscal rule.

You can go to the expansion of domestic and external debt. External debt, however, may be difficult, if you follow the extension of sanctions.

For leaking into the public sphere of information is discussed first of all the increased taxes and government spending maneuver with. The issue of the return of sales tax at the rate of 4%. This tax to regional budgets, it follows that a significant part of expenditure on health and education will be passed on to them. It would be easier to raise the VAT rate. His administration has worked, and the sales tax will have to start all over again. Perhaps the VAT rise will follow, when it comes to the exchange raised the VAT rate to reduce social payments from a wages Fund. While many have hinted that this maneuver has been postponed.

One of the most interesting places in the information flowed in the corridors of power, is that among the sources of funds expansion of expenditure on human capital development and new infrastructure is called the reduction of other items of government spending, including military. It is not just the economy.

In 2017, Russia’s military spending was already reduced, this process continues in the current year, and if it will last the next six years, it is a fundamentally important signal that Russia takes the world. A response to an already tense geopolitical situation that it is reducing its military budget actually calls for this situation to change. The Western stereotype of the aggressive policy of Russia. But unless aggression is consistent with a reduction in military spending?

This course, if he is confirmed by the decree, must be strongly promoted. This is one of the tasks of the foreign Ministry, the resolution of which he seems to have lost the habit.

Nikolai Vardul



✔ Increase the personal income tax from 13 to 15% with the introduction of non-taxable income for those whose salary is at the subsistence level, will bring 600 billion a year.

✔ From increased personal income tax for those earning not less than 5-7 billion a year, the state may receive 400-500 billion virtually any.

✔ Introduction of a 4% sales tax (an indirect tax, which is paid by the consumer for each unit of goods sold) will bring up the additional 1 trillion virtually any.

✔ The abolition of VAT exemptions that now apply to certain categories of goods — medicines, books, textbooks, can give the budget of 550-600 billion. In this case, will be abolished the preferential rate in 10% and brought to a common level of 18%.

✔ The tax maneuver in the oil industry, which implies the abolition of export duties on oil and load transfer to the domestic tax on mineral extraction (met), add 1-1,5 trillion virtually any.

“Due to the increase in the tax burden is a reduction of tax collection and the shadow economy, which amounts to 300 billion virtually any, will only increase in shadow would leave even the most conscientious taxpayers, except state employees, says the fiscal ideas of the authorities, the Deputy Director of analytical Department of “Alpari” Natalia Milchakova. And disadvantages of the tax maneuver with the met may be that different oil and gas companies under various pretexts, will knock out the government tax incentives that will only lead to costs”.

Ina Tegeticula


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