The tasks Putin’s demand of raising the retirement age and personal income tax.
Prime Minister Dmitry Medvedev placed before the economic block of the updated government to name the sources of money to Finance national projects announced in the may decree of President Vladimir Putin on ways of socio-economic development of the country until 2024. The amount of investments is estimated in 25 trillion. Experts say that Russia can cope with the task, however, perhaps the government will be forced to take unpopular measures to tighten the tax burden or to accelerate pension reform.
In order to raise 25 trillion rubles for the implementation of all objectives of the signed in early may, Putin’s new strategic document of the country, and in due time the representatives of the Ministry of Finance and Ministry of economic development will need to seek daily an average of about 455 billion. Currently, the government is understanding where to find the minimum amount of 8 trillion rubles for the implementation of the may presidential decree. It remains the case for small — to find another 17 trillion.
It is obvious that the “real” money to seek during this time would be impossible, therefore, apparently, for a start, the government will be forced to settle for a kind of preliminary plan of how and from what sources they are supposed to collect. Later followed by more specific recipes to attract funding. In particular, to the 25th June should be developed proposals to create a single document of strategic and budgetary planning, and by September 1 projects major activities of the Cabinet of Ministers and the forecast of socio-economic development of Russia until 2024.
In addition, until August 15, government agencies are ready to provide the options of national projects for the implementation of the may decree, and by October 1 — a special “road map” for the implementation of this document.
While the sources of raising funds, the volume of which is more than 1.5 times the revenues of the Federal budget in 2018, looks quite conventional. It is expected to increase non-oil revenues, increased tax collection, the use of funds of the national welfare Fund. It is also possible reallocation of spending from defense, law enforcement and government agencies for education, health and infrastructure.
Also referred to as trading instruments. In particular, the new head of the Ministry Dmitry Kobylkin offers bond loans. However, as an example, he calls the location of the last year bonds Yamalo-Nenets Autonomous Okrug, which managed to raise 2 billion rubles. To raise 25 trillion rubles in such portions would be extremely difficult.
However, according to financial analyst FxPro Alexander kuptsikevich companies, this mechanism will still be involved. “The government will try to essential part of to borrow on domestic markets. The key rate of the Central Bank is reduced, and the national debt of Russia is quite low – about 40% of GDP, together with the obligations of regions”, — said the expert. According to the Deputy Director of analytical Department of “Alpari” Anna Kokoreva, a good exchange if the existing situation will continue, in conjunction with the borrowings on the foreign market, our country will be able to draw from 1 trillion to 3 trillion a year. “On the implementation of the may decree can also go for foreign currency, which is actively buying Treasury. To date, these reserves account for slightly more than $15 billion, but by the end of this year, they promise to grow to $30 billion, as more of the windfall from high oil prices promise to reach 1-1,5 trillion rubles,” — says Anna Kokoreva.
She drew attention to the fact that the money will not collect right away and during the six years. Even if there will be a question about 25 trillion rubles, an annual investment requirements would amount to a little more of 4.15 trillion. “If, according to the government, 8 trillion roubles have actually collected, what we are talking about 17 trillion rubles, or 3.4 trillion per year, when oil prices were high and the growth of trade turnover of the country and borrowing capacity it is possible”, – says the expert.
However, the action plan that the Ministry of Finance and Ministry of economic development shall submit to the government a month and a half, will be continually rewritten. It can affect the realization of the threat of Washington to ban the circulation of government Treasury bonds in the U.S. and other Western sanctions promises.
Also, looks uncertain fiscal policy of the state. For example, due to a sharp growth in fuel prices by the government from 1 July is going to reduce the excise tax on 3 thousand roubles for ton of gasoline, and 2 thousand for diesel fuel. Earlier, representatives of the Cabinet, in contrast, talked about raising those fees, which would provide Treasury additional revenue of 60 billion rubles in 2018 and 80 billion in 2019-2020 years.
Now this budget increase may not be achievable. In fact, there is a suspicion that officials will use unpopular in a social environment measures, including the increase in personal income tax and promotion of the pension reform. “The pocket of pensioners and the General population is one of the most stable “deep resources” of the state. It is not excluded that officials will carry out various manipulations with these savings to perform tasks set by the President”, — said Kuptsikevich.