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News: The government announced the main parameters of the budget – Expert

The authors of the budget for the next three years have reached the finish line. The main parameters of the main financial document of the country, which this year was truly achieved by the Government, the Ministry of Finance and relevant committees and departments, were finally presented at a meeting of the Cabinet of Ministers, and part of the event was broadcast on TV. It should be noted right away that if the previous budgets were called “development budgets”, then the current one has not yet been given an official epithet. But it also contains clear hints of a new “spurt”.


According to the head of the Cabinet of Ministers Mikhail Mishustin, the current project “combines all the best solutions for the current situation.”


“It guarantees the fulfillment of the social obligations of the state to the people, it contains resources for strategic tasks that the President has identified in the form of national goals,” the Prime Minister said at a government meeting.


In particular, it is planned to allocate 3 trillion rubles annually for the implementation of national projects. And this despite the fact that, according to Mishustin, all expenses, for example, for 2023, will amount to 29 trillion and 56 billion rubles. That is, slightly higher than this year.


This increase was achieved through a careful review of priorities. Some previously planned expenses were postponed “for later”. This circumstance was previously noted by Andrey Makarov, Chairman of the Committee on Budget and Taxes of the State Duma, talking about the work that has been carried out since the summer.



















The support of the population remained and even increased. As Minister of Finance Anton Siluanov, who followed the Prime Minister, explained, spending priorities were determined in the messages of the President of the Russian Federation and decisions of the Government.


“This is the full provision of social measures to support families with children, pensioners, public sector employees. Continuation of the implementation of such important programs as: payment of maternity capital, mortgage programs, including family mortgages and agricultural mortgages, measures to create new places in general education organizations and repair schools. Until 2024, up to 1,500 schools will be put into operation and more than a million places will be put into operation, ”said the head of the Ministry of Finance.


However, the main announcement in the social sphere was nevertheless made by Mikhail Mishustin, announcing the launch of a new, or rather, updated and optimized type of family support from 2023.


“From January 1, it is proposed to introduce a universal allowance for low-income families. It will bring together a range of existing social protection measures. Including payments that are provided in connection with the birth or adoption of a baby, and until he reaches the age of three. Also for children from 3 to 7 years and from 8 to 17. The allowance will then be assigned to needy women who are registered in the early stages of pregnancy. To apply for a universal allowance, you will need to submit one application, without additional certificates, ”the prime minister said, noting that families with about 10 million children will become recipients of state support.


In addition, large-scale support is provided for industry, the creation of capacities for the production of products that Russia has been buying abroad for decades. Particular attention is paid to supporting the microelectronics and aircraft manufacturing sectors. It is not for nothing that the day before in Novgorod the president lamented that competitive engines for civil aircraft have not been produced in our country since Soviet times. Time to get started.


Plus, as Anton Siluanov noted, the focus will be on infrastructure projects.


“It is impossible not to dwell on the continuation of infrastructure development programs. The road five-year plan is provided in full with sources of financing. Money for new projects has also been taken into account – this is the development of electric transport, ground electric transport. Sources are also provided for a new program for the modernization of housing and communal services,” said the Minister of Finance.


At whose expense is the budget?


That is, everything is fine, there is money. True, I had to search for them, again from the very summer, through a collective search. Actually, these “tax innovations” were also announced by Andrey Makarov. This time, Anton Siluanov explained what, in fact, is the novelty of the idea.


“The tax proposals take into account the fair withdrawal of part of the natural resource rent, which has increased as a result of changes in world commodity prices. These are an increase in the export duty on pipeline gas, the withdrawal of additional income from liquefied natural gas producers, the introduction of an export duty on fertilizers and thermal coal in the event that high prices for these products remain. Increasing the taxation of the oil industry by maintaining the damper mechanism refined this year and adjusting the calculation of the mineral extraction tax,” said the Minister of Finance.


That is, those who earn a lot will share with those who need it more. Andrey Girinsky, Associate Professor of the Faculty of Economics of the Peoples’ Friendship University of Russia, notes that such a strategy should be implemented with extreme caution: it is important not to go too far.


“In the general case, an increase in the tax burden may have the effect of some increase in federal budget revenues. However, the tax burden requires careful analysis and fine regulation so as not to cause a recession in the medium and long term,” the expert argues, noting that the collection of “fair rent” has a downside, along with a positive fiscal effect: it can slow down the development of industries . And under the sanctions, they still have to solve the issues of providing technologies and equipment, including through parallel imports.


Still have to take


However, you will not earn all the money, and in budget policy this is not necessary, and you will need to borrow. According to Mikhail Mishustin, next year’s treasury revenues will amount to 26 trillion 130 billion rubles. That is, almost 3 trillion less than spending. The budget deficit in 2023 will be 2%. With a gradual subsequent decrease to 0.7% in 2025.


At the same time, as emphasized by both the Prime Minister and the Minister of Finance, it is planned to act in the logic of the budget rule.


“The draft budget takes into account the normalization of the budget policy and the gradual transition in 2025 to the budget rules, which provide for the primary balance of the budget. That is, revenues will be equal to expenditures, excluding the cost of servicing the public debt. At the same time, the basic oil and gas revenues in the amount of 8 trillion rubles are taken into account in the calculation of income. Anything that comes on top of basic oil and gas revenues will go to the National Welfare Fund. This will reduce the budget deficit from 2% of GDP in 2023 to 0.7% in 2025,” Siluanov said.


At the same time, it is planned to finance the budget primarily through borrowings. Moreover, in the light of sanctions restrictions, it will be necessary to borrow on the domestic debt market, which should serve its long-awaited development. And the FNB will continue to act as a “pod”, which they will try not to touch without special need.


“This year, after the volatility of the financial market, we are starting to place government securities. Next year we will do it more actively, because we plan that the capacity of the financial market will increase. In this regard, we will adjust the upper limit of borrowings for the next 2 years in such a way as to minimize the use of the NWF, and attract more resources from the financial market. In the ideal case, we plan to stop using the NWF for borrowing purposes altogether,” the Minister of Finance said, noting that after the amount of the NWF reaches the required level (again!), the money from it will be directed to infrastructure projects.


But what are the possibilities of the Russian debt market? To what extent is it able to meet budgetary needs?


“The actions of the Government and the Central Bank, taken in March in accordance with presidential decrees on economic measures to ensure financial stability, helped to stabilize the financial system and the domestic capital market. According to the results of the first half of the year, there was a liquidity surplus in the Russian banking system. The huge current account surplus of the Russian Federation, as well as the “de-dollarization” of bank balance sheets, form additional volumes of domestic capital, so the potential demand for new OFZ issues now exceeds the planned borrowing volume of the Ministry of Finance,” says Alexander Losev, General Director of Sputnik Capital Management JSC .


As for rates, the Ministry of Finance is not interested in raising the bar, overheating the market. The department is good at counting. They also understand that in the current situation, when investors have little room for maneuver, a simple rational approach is likely to win: let the money work and bring at least something that lies dead weight on the accounts of legal entities and under the notorious mattresses of citizens.

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