Why the budgets of all regions of Siberian Federal district less than the budget of Moscow, whether raw materials regions to develop in the colonial economy than turned out for the country the implementation of “may decrees” of the President and should we expect similar decrees before the upcoming election? These and other questions “Siberia. The realities of” discussing with the doctor of geographical Sciences, Director of the regional program of Independent Institute for social policy Natalia Zubarevich.
“The destruction of stability of budgets is obvious”
– His third presidential term Vladimir Putin began with the may decrees. It’s time to answer the question: do they?
– On the one hand, the salary is slightly pulled, it’s true. Initially, all regions increased wages and accumulating debt, because the bulk of the costs lay on the budgets of the constituent entities of the Federation. And only two years later, when deficits and debts have become huge, began an accelerated process of cutting their budgets. Combined schools has decreased in hospitals, especially in rural areas. This process led to the deterioration of the territorial accessibility of social institutions. Plus overstrained budgets of subjects of Federation. So my attitude to the decrees, rather, with a minus sign, because the side effects were very, very high.
Demands on budgets, of course, huge. If you take only Siberia, the most difficult situation in Khakassia. The duty of the Republic to the 1.2 times more than its own revenues. On the second position – where 75-80% of their revenues – debt in Zabaykalsky Krai. Third position is the Omsk oblast, more than 60%. And almost 60% of Tomsk residents. A little softer situation in Krasnoyarsk region is the duty of a little more than half of its income.
– And what it means for the development of the region this debt load?
– The debt burden – a very heavy thing, that’s just one example: Khakassia debt service spends nearly 9% of the budget. It is monstrous figures. Krasnoyarsk Krai spends where some 3.5%, and TRANS – Baikal 4-5%. The destruction of stability of budgets of subjects of Federation are obvious.
Although I must say that the regions are trying to adapt. The first two years it was really quite a shock, but 2017 is more balanced. If we look at the ratio of cost to income, it is very much a budget deficit of Khakassia 10%. The budget deficit Tomsk region – 7%, but there’s another problem: Tomsk oblast is the only region of Siberian Federal district, where reduced revenues. One-third off receipts of income tax, and as a result for 11 months of 2017 (data year yet) in the Tomsk region of 6% decrease in revenues. Transbaikalia is the third region with a deficit budget, but relatively small until 2%. As a rule, in December, the costs skyrocket accordingly will increase the deficit.
Other subjects in the first 11 months had surplus budgets. The best situation in 2017 have developed in the Kemerovo region, the income of the budget grew by almost a quarter. This is due to the increase in world prices for coal in 2017: grew the revenue of the coal companies and the Steelworkers felt good, so the income tax has doubled, which greatly assisted the budget of the Kemerovo region.
Budget expenditures – what people themselves feel the situation is more complicated. The cost of 1-2% reduction in Omsk oblast, Altai Republic and Khakassia. The reasons are different. In the Omsk region are trying to cope with debt, save. The Republic of Altai received in 2017, fewer transfers, and there is a level of subsidies, almost 70%, and accordingly, it also reduced costs. And about the Republic of Khakassia I said, there is such a debt that they are trying to cut all costs which can.
But, by and large, little has changed. As was Tyva superrotation, and remained three-quarters of revenue comes from government grants. From her slightly lagging behind the Republic of Altai is 69%. As was Buryatia half on the transfers, so these 48% remained. The income of the Altai territory 35% are transfers to the region – 31%.
Half of the constituent entities of Siberia the level of subsidization below the national average. Krasnoyarsk Krai, Irkutsk oblast – only 12%, in Novosibirsk – 11%, Kemerovo – 14%, Tomsk – 17%. These regions have a weak dependence on transfers and the Federal center, though I can’t say that they are highly developed.
To be clear, how the Russian budget system, I will give you one example: the budgets of subjects of the Siberian Federal district per year is about 1 trillion 100 billion rubles, and the budget of one of the Moscow in 2017 – more than 2 trillion.
– If you compare Siberia and the regions of the European part of Russia – who is in a better position?
– If we take all transfers, who gets SFO, then up to 11 months it will be a 211 billion. The whole amount of transfers received far Eastern district – 176 billion rubles. And the amount of transfers received by the Republic of Crimea plus Sevastopol, 88 billion. Here and compare.
On the second place after the Crimea according to the volume of transfers of Dagestan, in the first 11 months of 2017, he received 66 billion. Third place, 55-56 billion, share of the Republic of Chechnya and Yakutia.
There is an indicator that, in my opinion, even more clearly shows what is going on is investment. Because investment is our future. If we look at the data for 2017 (so far in 9 months): the share of the Siberian Federal district accounted for 9.4% of all investments in the country. The share of southern Federal district and 8.4%. Compare compact the South and vast Siberia. Far East – 7.5% of all investment in the country. And Moscow is 11.5%, in the Tyumen region with Autonomous districts is 17%.
That is money in Russia is invested in two and a half. The first major oil and gas producing district. The second is the capital. And third, there is the Crimea and the surrounding area. So business investment are mainly on the reproduction of our commodities in the economy, and the state as the investor chooses geopolitical priorities.
– It helps the development of the oil producing regions and increasing the standard of living of their population?
– Partly Yes. For example, the Krasnoyarsk Krai the first five years, little was seen from the sharply increased oil production – Rosneft received benefits on regional taxes. But when the grace period ended, the budget of Krasnoyarsk region it is very well grown, and in the year it will be about 235 billion rubles. No one in Siberia and close such budget no. From the Irkutsk region will be about 160 billion In the Altai region, with its large population, well, if there’s 100 billion of Oil in Tomsk region will gain 65 billion a year, maybe less.
Oil provides the revenues to the regional budget in the case if the Federal authorities do not confer major company benefits. But, unfortunately, they do it with a fair regularity. Add more and withdrawal of profits large business in their Metropolitan headquarters is a standard story. Therefore, Siberia is quite the colonial economy.
“But on the Siberia to be sad we must constantly”
– Natalia, we have seen that when Sakhalin finally began to receive revenues under the project “Sakhalin-2” the region has taken a significant part of the income tax. Do not repeat a similar story with the other regions, with the same Krasnoyarsk?
– And there is nothing really to take away, you can relax.
Sakhalin, indeed, a rocket soars on income. In 2010-2011, it was a region with a budget of 50-60 billion rubles, and at the peak in 2015, they grew to almost $ 230 billion, Then the income started to fall sharply because of the fallen price of oil. Sakhalin, in contrast to Siberia, lives on agreements on production section, and they do not allow you to take in the Federal budget of the oil rent. Sakhalin receives royalties and income tax, which is mostly regional.
In Siberia, no one agreement on production section. Large oil and gas company partially used to optimize the so-called “consolidated group of taxpayers” to losses in some regions, to combine with revenues of others, and thereby to show and pay less income tax. They do it masterfully.
To cannibalize Sakhalin oblast, in the project “Sakhalin-2” has revised the distribution of income tax between the Federal budget and the budget of the subject. Found something in the contract. I think I’ll withdraw still not the 75% income tax on the profit from this project, and will probably be 50: 50. But the problem is that two years the revenues of Sakhalin fall, and 2017 will be around 130-135 billion, already did not have any 230. Additional exemption of income tax greatly undermine the budget of Sakhalin.
– And undermine the sense in which: will now be the soup liquid diamonds or smaller?
– They lived a fantastic, didn’t know where to put the money. And overall prizes (the ex-Governor of Sakhalin, in March 2015 is under investigation. – SR) got under the hand because I forgot the main principle of life in the Russian Federation “it is necessary to share”. He didn’t share.
Last year Sakhalin voluntarily assumed funding of the Federal program for the Kurils. After the seizure of proceeds Sakhalin enough on social programs, but it is unlikely that the development of the economy. Place the sugar, life is expensive. They do not greatly increase social spending, a lot of money invested, and not too effectively, in support of the national economy – there will cut capital. But let’s not be sad about Sakhalin, he will survive, but about Siberia, I think, sadness is necessary constantly because there’s such history of the rise of budget revenues is not and can not be.
Because the feds never sign the agreement on production section – it infringes upon their ability to withdraw the commodity rents from the regions.
The main source of Federal budget revenues oil and gas taxes are two of them. The first is the severance tax, the tax on extraction of oil and gas minerals. In the fat years with the high price of oil, its share accounted for 27-28% of all Federal budget revenues. When agreements on production section of the severance tax is not charged. The second source is the oil and gas export duties. And the third part of the Federal income tax, is relatively small, but still. Without the severance tax, the Federal budget cannot exist.
Sakhalin was given the opportunity to conclude an agreement on production section only because: a) none of the Russian oil and gas companies did not hurry to go there because the costs are monstrous and Russia did not have technologies for offshore production, and b) because it was beating desperately, the former Governor of Sakhalin Igor Farkhutdinov. It was the 1990-ies, when the feds don’t have the money to help the region, and they just said let them come the Western companies and something you break off. Second, this story was in the Nenets Autonomous Okrug, there is also agreement on production sharing, because neither the strength nor the money from Russian oil and gas companies to go to extreme polar conditions did not exist. All this history of the 90-ies, since no PSAs have been made.
“From Moscow we can’t withdraw her rent”
– How has helped the region the presence of “Rosneft”, “Gazprom” and other large corporations?
– As anyone. For example, the Khanty-Mansi Okrug in 2017, the budget experienced a shock, because their income in January-November fell 10% due to the reduction by more than a third of income tax. Due to what? That’s how he paid a consolidated group of taxpayers: in 2016, was 27 billion over 11 months, and in 2017 – 4 billion.
In 2013 and 2015 same story was on the Yamal Peninsula, when “Gazprom” was greatly reduced payments on the income tax, probably by redistributing part of its headquarters. The budget of the Yamalo-Nenets Autonomous district subsided. And in 2017, they have a holiday: income tax increased by 46% and revenue rose by 20%. Probably best agreed with the business.
Therefore, the presence of large bears in your den doesn’t mean stable from the tax, it means turbulence.
– Moscow live on the same oil money?
– Partly Yes, although the largest payer of income tax – the savings Bank. Profit tax in Moscow rose in January-November 17 percent, reaching almost 630 billion rubles for 11 months of the year will be about 700. It’s staggeringly a lot. Including significantly increased revenues from consolidated groups of taxpayers: in January-November 2016 was 40 billion, and in 2017 – 78 billion rubles. Roughly how many missed Khanty-Mansi Autonomous Okrug.
Companies to conveniently consolidate profits in the headquarters or on traders that are spelled out, usually in the capital. Partly why Moscow gets a huge income tax. PLYUS in Moscow is a giant tax on income of individuals from the high and mostly white wages, including highly paid managers of the headquarters of major oil and gas companies. Personal income tax receipts even more than the income tax for 11 months – 700 billion, and by year, including bonuses, will be about 800 billion Here and put only these two taxes. Revenues of the capital budget in 2017 will exceed 2 trillion rubles., that every fifth ruble from the budget of regions.
– Tell, please, the Governor has leverage on consolidated taxpayers?
– Can I ask you this question: tell me in the Russian Federation the Governor, who can affect the real Igor Ivanovich Sechin who? And we, perhaps, with you close this question. Do you agree?
– Consonant. So Igor Ivanovich can do whatever he wants?
– No, he can’t do whatever he wants, he acts within the law. The law on consolidated groups of taxpayers a lot of convenient holes that you can use for their own pleasure. The legislation also allows the Federal government to establish privileges on regional taxes.
The Governor is the only way to affect large taxpayers is to give them regional benefits income tax to large business some large part of the income tax shown on their regions. Approximately 25 regions offer such benefits to attract large taxpayers. The balance of profits and costs in these games are different.
Is it possible to say that Siberia is the donor of the Federal budget?
– This can only be assessed conditionally. In 2016 from the regions of the Siberian Federal district went to the Federal budget of 510 billion rubles of taxes. For comparison: from Moscow – more than 1 trillion, of KHMAO with YANAO – 2.1 trillion. In total, the regions of the Okrug received 209 billion rubles of transfers, but the money from the Federal budget are not only as transfers, but as direct funding from Federal agencies. My colleagues in the 2000s tried to count all the threads, it is very difficult. Then it turned out that in Russia 30-35 regions which have a surplus of plus regions. But certainly not the donors highly subsidized republics of Tyva, Altai, Buryatia and Altai Krai TRANS-Baikal Krai. On the contrary, Krasnoyarsk Krai, Irkutsk, Kemerovo, Novosibirsk, Tomsk region obviously give more to the Federal budget than they receive in transfers and other Federal money.
– Probably, these regions would like to keep all the money that they earn, then life would have to be richer and richer…
– Well, first, we have a Federal state and there should be a system of redistribution. The severance tax is a rent tax, and the rent need to withdraw and redistribute.
Another thing is that there are more Metropolitan rent. Moscow has an objective advantage in the form of agglomeration effect: high concentration of population and huge market reduces the relative cost of doing business, it is more effective. And that’s fine. But city rent is the advantages of status, and it reaches huge proportions in sverhsekretnye the state, as is Russia. We need political and administrative decentralization, then the capital rents decrease.
In the field of taxation the possibility of decentralization is limited. Income tax should be fully given to regions. This will increase the inequality of the tax base, but will help the more developed regions. Now in General tax rate 20% ratio of 17 and 3 in 2016 was 18 and 2, the Federal budget increased its share. Redistributed in favour of the Federal budget fuel excise taxes, the regions were again lost. The first thing to do is to stop further drag on the Federal level taxes.
It is impossible to solve the problem of huge disparities of tax base of subjects of the Russian Federation. Still have to redeploy to mitigate the inequality of fiscal capacity. The second important action is to redistribute in a transparent, clear criteria, and not, as is happening now.
“And the denser regions still sitting on the hook”
– We can hope that the feds once back regions back what was taken?
– Hardly. Our state when he took his warm hand, back usually does not give. The problem of the opacity of transfers no less acute. Well, that increased the share of subsidies on equalization, distributed according to the formula, more or less transparent, but a lot of transfers is distributed according to political criteria or under pressure from lobbyists. Besides Crimea and Chechnya give a lot more, because I think that it should be. Other regions are forced to go to negotiate, to knock out the money – very convenient for the authorities control system. It allows you to keep the regions on the hook.
– But not Federal.
– But federalism only in name. It is now generally antifederalists system.
– Another kick on federalism was the form of mass landing of the Vikings-governors. This method of control somehow helps the economy or is this all about the economy?
– This is an attempt by a “young technocrats” to boost regional development, but it is unlikely to be successful. Still trying to change training: Federal appointee coming into the region, gaining experience. They then will likely return to the Federal level.
Federalism, this system is certainly not irrelevant. This technocratic attempts to encourage the regions to change the fact that the Federal center sees fit. And at the same time raising the young, technocratic elite.
– You assume that these appointees will remain in their seats after the election?
– All elected. The March of the troops was elected with very good results. There are two factors. First, from the old governors were tired. A new person came – suddenly it something I can do. Secondly, even hoped, that he was appointed President, well, maybe money will add more. So people go and vote. In the next election cycle all appointees autumn assault, I feel, will win the election, the more serious contenders will not be the filters of our electoral system is debugged and working well.
Today there are governors who are able to argue with the Federal government in the interests of the region?
– No. Now there are none. A couple of years ago, the head of Tatarstan defended the Turkish investors in the country, when they were expelled from everywhere, then tried to object to the seizure of a percentage point income tax and fought for the preservation of the national language in schools. And we see the consequences: the national language and abolished, and the law on the sovereignty of Tatarstan… significant advantages of Tatarstan went under the knife. And now I think that Rustam Minnikhanov will be silent.
– Natalia, and the Federal government will do with the increased debts of the regional budgets?
– The debt of regions and municipalities decreased by 8% from January to November 2017. In the regions of different dynamics: the ones who have the debt is not catastrophic, it gradually reduces, and the most problematic mainly continue to increase. The situation is polarized.
The Federal budget for the last three years gave the regions a lot of super-cheap budget loans, but in 2018 their volume is sharply reduced, and in 2019-2020 like even stop giving altogether. Instead, the Ministry of Finance has decided that the regions could repay previously issued loans gradually, with a delay of five to seven years. But such a delay will result in the certain conditions: if the region is increasing its budget revenues higher than the rate of inflation, driving it without a deficit and optimizes your expenses. Those who fail, the rollover will not.
Let’s see what happens in 2018. It is obvious to me that at least two dozen regions will not be able to perform to the Ministry of Finance. And then the Federal center will come to a fork: to give even to survive, or first flogged. I think that will at the same time and give, and smack.
And will someone smack the governors or the population?
– Russia has not withdrawn even a single Governor for the poor socio-economic and budgetary indicators. None. The Finance Ministry usually start punishing the fact that reducing transfers or government loans. Then, when the situation reaches the limit, decisions are taken. Look.
– People in any case, nothing good is not shining, as I understand it?
– For people it is unlikely that anything much will change. Before the election in 2018, add a little bit of money on social protection, because in 2017 savings. Expenditures on education grow at the rate of inflation, that is imperceptible. Health care costs worse, there is almost no growth. These figures mean only one thing: there is not even stagnation and gradual degradation of the entire social sphere. The population may not notice the growth or decline of the social spending budget by 2-3%, it notes the reduction of employees and a network of institutions that leads to a decrease in the availability and quality of social services.
– To a new term of Putin will be gifts akin decrees may?
– So everything has already been said. The allowance for the first child for low-income families. The indexation of public sector wages and pensions – two. And third – bringing the minimum wage to a living wage.
– All right, enough with us?
– Judging by the money – Yes, more are not. New Royal gifts, I would not expect.