Budget showdown: which plan will offer the power crisis in 2016

Budget showdown: which plan will offer the power crisis in 2016


Doomsday budget

Wednesday, October 7, the White house finally is going to define the parameters of an annual budget for 2016. On the day scheduled for a broad discussion on fiscal and large. The discussion will be inaugurated by Prime Minister Dmitry Medvedev, at 13:00 will meet with representatives of the parliamentary faction “United Russia”. Immediately after this meeting, the Prime Minister will hold a meeting of the government Commission on budget projections. Finally, at 17:00 scheduled meeting of the Russian tripartite Commission on regulation socially-labour relations under the chairmanship of the social Deputy Prime Minister Olga Golodets. At this meeting the design budget will be discussed by the employers, the trade unions, as well as those deputies and Federation Council members, who were unable to participate in the conversation with Medvedev’s “United Russia”.

Officially, neither the White house nor the Finance Ministry is not ready until tomorrow to share the specifics. Choose from available alternatives the government has yet to announce on Wednesday. Targets for a balanced budget — a deficit not exceeding 3% of GDP and preservation of reserves by 2018 at the level of 2 trillion RUR In an interview last week, Finance Minister Anton Siluanov insisted that the chronic budget deficit is a dangerous repetition of the scenario of the 1990s — the default on state obligations and the decline in real wages by 40%. Another argument of the Ministry of Finance in favor of the most rigid fiscal policy: forecast $50 per barrel of oil in 2016 is too optimistic. “We need to continue to seek additional opportunities to improve the budget situation,” said Siluanov.

The basic pension plus 4%, with the option of doindeksatsii

Incomplete indexation of insurance pensions the government is discussing for six months. After the devaluation of the ruble and accelerating price growth, the Ministry of Finance immediately announced to the inability to index pensions on actual inflation at the end of 2015, as required by current law. By the spring macroeconomic forecast of the Ministry of economic development of the “legitimate” indexing could be 11.9 percent. And in September the government agreed with the new estimates of the Ministry of economy, in which inflation at the end of the year will be 12.2 per cent.

Until the end of the summer in the government discussed the indexation of the pension in 2016 is 5.5%. But at the end of September, the bar has been lowered to 4%. At the Sochi investment forum on 2 October, the head of the Ministry of economy Alexei Ulyukayev said on the indexation of pensions from 1 February 2016 at 4%, is a decided fact. In addition, Ulyukayev said about the possibility that a second indexation in the second half of 2016 — the chances of this “very real”, he said.

Sources in the government said that Dmitry Medvedev United Russia will offer the second indexing as a compromise. Sources and parameters of doindeksatsii will be determined by the results of budget execution. In particular, after the tax authorities will cope with the tax and customs arrears, which, according to Alexei speaker, the amount to 250 billion rubles.

Without funded pension

The solution for the third year in a row to freeze pension simultaneously with the underfunding of pension insurance has not yet been announced publicly. About the discussion on this issue, the officials spoke anonymously. At the end of August the social block of the government insisted on freezing the funded pension, in order to index insurance pensions in full. The Finance Ministry was categorically against freeze, insisting on the need to maintain resource investment for economic growth. According to calculations of the Ministry of Finance, in 2016 the amount of the cumulative pension will be about 350 billion rubles This is equivalent to 5 percentage points of indexation of insurance pensions (Siluanov estimates each percentage point of indexing in 70 billion rubles to the budget). At the end of September, government sources said that the decision to freeze will still be accepted.

3% of the budget anti-crisis Fund

Rather than Fund investments, pension savings will be allocated to the reserves, said the sources in the government. The expected anti-crisis reserve for 2016 — 0.5 trillion rubles, which is about 3% of all budget expenditures. The reserve will more than double compared to the year 2015 — this year, the government has set aside for a rainy day, about 200 billion rubles And in 2014 the anti-crisis Fund of the government was estimated at 344 billion rubles.

This time the budget reserve is planned to be divided into two funds. The source of formation of the first reserve funds is proposed to make from the freeze of the cumulative part of the pension. The second Fund in the amount of 150 billion rubles is planned to fill unspent in 2015 funds of budget beneficiaries and 10% reduction of subsidies to state companies and state corporations.

First, the Fund can be used to doindeksatsii insurance pensions in the second half. The second Fund is proposed to Finance activities not included in the basic expenditure budget. Government sources said that in expenditure from this Fund is provided, for example, support for exports, support for small and medium businesses in 9 billion rubles, a small innovation costs by 2 billion rubles.

The impact on the appetites of state companies

In budget projections to state-owned companies and state corporations prepared for not only a 10% reduction in budget subsidies. Anton Siluanov in an interview warned that premiums in the state will get “targeted”. The Finance Ministry has already prepared amendments to the Budget code, which change the order of granting of means of the budget of the state corporations. Subsidies for capital investments will be possible only with the use of the Federal targeted investment programme government decisions on each construction project. Budget funds will be monitored after their transfer to the Charter capital of subsidiaries of state companies. Such subsidiary is proposed to extend the requirements for state corporations. In the budget for 2016 is proposed to consider the requirement about the transfer of the subsidies only to accounts opened for the Federal Treasury in the institutions of the Central Bank.

The oilers will share

The Finance Ministry still insists on the redistribution of income oil and gas sector in favor of the budget. In the beginning of last week it was about the seizure of 600 billion rubles of natural resource rents by changing the formula of the mineral extraction tax for oil companies. This proposal was rejected at the meeting at the Prime Minister on September 26. But the oilers will have to share, though less than the original proposals.

As Siluanov said, when you save the formula of the met in 2016, it is proposed to leave the export tax at the level of 2015, while first oil expected its decline. In the budget it will give more than 196 billion rubles. in addition, according to the Minister, the formula will be adjusted in the severance tax on gas. Discusses the increase of base factor exemptions for Gazprom by 43%. This will give about 100 billion rbl. dopdohodov. Finally, the Ministry of Finance proposed to impose excise taxes of about 7 million tons of oil products (the so-called middle distillates).

Overall from these three measures, the Finance Ministry expects about 330 billion rubles of budget revenues in 2016. But “Gazprom” has raised the question of compensation. In Sochi at the meeting with Dmitry Medvedev the head of gas monopoly Alexey Miller has asked for exemptions on the mineral extraction tax for Yuzhno-Kirinskoye gas and condensate field. His request Miller justified sanctions against deposits from the United States, and not exceptions to the budget.

Public sector wages are not indexed, decrees of the President not enforced

Least in recent time, the government argued about the freezing of indexation of salaries of state employees. About the retention at the level of 2015 expenses related to wages in the framework of the may decrees of the President, the government agreed at the very beginning of the budget cycle in June of this year. We are talking about the freezing of salaries of teachers, doctors, scientists. At a meeting with Prime Minister Dmitry Medvedev on September 11, it was confirmed that all previous decisions on optimization of budget expenditures remain in force. Also in the budget is not planned indexation of salaries and monetary allowances for servicemen.

In addition to General insurance pension secondarily, reduce gearing and for certain categories of pensioners. For rural pensioners will be suspended for a fixed premium. Military retirees payments will be reduced by changing the order of calculation of pensions — it is proposed to delete the annual increase of money allowances for military personnel. Indexation is not assumed and for the parent capital — the size proposed at the level of 2015. Part of the Federal civil servants in 2016, will lose in salaries planned 10 percent reduction. Will be reduced and the rate of recruitment of contract servicemen in the army. By the decree of Vladimir Putin was expected to increase the number of contract servicemen is not less than 50 thousand annually. But the final parameters of the budget savings will be announced only after the meeting with the Prime Minister.