Д.Медведев.Вступительное слово на совещании.25.05.09

Opening Remarks at Meeting with Government Cabinet Members and Chairmen of the Federal Assembly Upper and Lower Houses on Budget Policy in 2010-2012.
May 25, 2009
The Kremlin, Moscow

Вступительное слово на совещании с членами Правительства и руководителями палат Федерального Собрания о бюджетной политике в 20102012 годах.
25 мая 2009 года
Москва, Кремль

PRESIDENT OF RUSSIA DMITRY MEDVEDEV: Colleagues,

Today I signed the budget address outlining budget policy for 2010-2012.
I already explained what motivated the decision to make this document public. This is being done partly so as to focus your attention on its key points, and also, of course, because this document is so important in general for the countrys life over the coming period. This is why I have brought together today those directly involved in carrying out the tasks outlined in this budget address.
We all know what a difficult situation the country and the economy face today. The global economic crisis is far from over. Unfortunately, we expect that GDP will shrink by more than was initially forecast this year. The global crisis has caused a sharp drop in government revenue that obliges us to make adjustments to this years budget. Expenses will be higher than revenue for the first time in the last ten years. The budget deficit will be at least 7 percent of GDP, and this is the optimistic forecast. The reserves we have built up enable us to fulfil our social spending obligations and also put serious money into anti-crisis policies. These are matters of paramount importance. The result is that in 2009, rather than cutting back expenses, we will actually increase spending compared to what was originally planned. Incidentally, other countries currently facing difficulties, all the developed countries in other words, are doing the same thing.
We all know the facts and figures, and I think we all agree with the obvious conclusions. Let me explain what I mean. Macroeconomic stability is a fundamental condition for economic development. Budget planning must therefore be based on conservative estimates of future price fluctuations on the commodities markets. Of course, prices could turn out higher than estimated, and this would certainly be in our favour, but we cannot risk our ability to fulfill our spending commitments.
We also need to keep public spending within reasonable limits. The budget must not become a source of financial instability nor must it contribute to a slump in business activity in the country. We need to find the golden mean. We also need to realise that the decisions we have made, above all about pension system reform and our economic modernisation and technological development priorities require serious changes to the budgets structure. We need to make the budget one of the key tools for reaching our long-term goals. Budget policy must be able to adapt to changing circumstances, but even during a crisis we cannot resolve short-term difficulties to the detriment of our long-term objectives.
With these considerations in mind, I think we need to concentrate on the following principal budget tasks, ten in all:
One, we need to fulfil our social spending commitments and make them more targeted in nature. There must be a consistent effort to give the regional authorities greater powers in this area. They are the ones who, using their knowledge of the local situation, should decide which specific social support programmes are needed, taking into account the income levels of benefit and subsidy recipients.
Two, consistent efforts are needed to bring down the budget deficit. The pace at which this can be accomplished is a matter for separate discussion. The budget should provide for a higher level of undistributed reserves so as to enable us to make flexible responses to the fast-changing economic situation. In particular, we will need to decide later on the indexation parameters for payroll funds, military servicemens wages and the minimum wage. I propose that we base ourselves on the results of the budgets implementation for the first half of this year, leaving open the possibility for subsequent adjustments based on the results for the year as a whole.

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