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Vladimir Putin: Mr Siluanov, I know that the Finance Ministry and the Government in general are working hard right now on preparing the budget for next year and the subsequent planning period. I would like to know what stage things are at now and how you assess the work so far.

Anton Siluanov: Yes, Mr President, the Government has examined the adjusted budget for 2015–2017 and the main budget policy guidelines. We have drafted this three-year budget at a moment when the global and Russian economies face difficult conditions. In this situation, we need to stick to the rules and principles that we set for our budget policy and not let spending grow. We need to keep following the budget rules and not allow a deficit of more than 1 percent of GDP. We will keep the deficit to within 0.6 percent of GDP over the coming three-year period.

Acting in accordance with our budget policy rules, we have informed the ministries and agencies of the budget funding limits. The Government is now in the process of discussing the main budget spending areas: the social sector, defence and security, industry and transport. We are examining the ministries’ and agencies’ proposals. As always, the ministries and agencies are asking for sizeable allocations, but even so, we cannot go beyond the set limits. 

Mr President, the main social spending areas set out in the draft budget and the funding needed to carry out the presidential executive orders have all been taken into account.

We do have new expenses, funds needed to rebuild the economy and social sector in Crimea and Sevastopol. These resources will come from existing budget funds and will not change the macroeconomic parameters.

Vladimir Putin: This year, we are settling all of the matters connected to Crimea’s and Sevastopol’s development using existing Government reserves.

Anton Siluanov: Yes, this year we have undistributed reserves and we plan to carry part of these funds over to next year and use them to finance development programmes in Crimea and Sevastopol.

Vladimir Putin: So Crimea and Sevastopol’s development will be funded this year from the Government reserves, and these same reserves, carried over to next year, will continue to be used?

Anton Siluanov: Yes, that’s exactly right.

The Government’s main task is to make spending more efficient, because there are reserves that we can draw on here. As part of our work to carry out the presidential executive orders on wage rises, we are working hard right now on increasing public sector labour productivity. The burden is growing and budget spending is becoming more efficient too. This work, which is one of our priorities, has also been taken into account in the budget. 

We are also working on assistance for the regions. The regional budgets have started running deficits of late and we see the need to support them. This support will take the form of financial aid that will come through reduced demands on regions’ participation in financing programmes carried out in the regions. We are also looking at various proposals for increasing regional budgets’ revenues.

Vladimir Putin: We spoke about not changing the budget rules, keeping to them in our work and doing our best to resolve our current economic and social-sector tasks on the basis of these earlier decisions. We will look for resources within our economy, within the budget, and increase revenues. I said at our last meetings that this must remain our basic position and that we need to keep these circumstances in mind. What is the situation like in this context? 

Anton Siluanov: Mr President, these were precisely the principles we used in setting the budget’s main parameters. We have not changed the budget rules at all. We are looking now for new resources within the budget. We have some proposals for optimising some of our programmes and the Government has approved these proposals. Essentially, we propose a two-percent optimisation of programmes. This would not involve any spending cuts in healthcare, education, transport and agriculture, which are all priorities. Programmes in these areas will be maintained in their entirety. 

But there are sizeable resources that we can draw on by making spending more efficient, and as I said, this is what the Government is working on right now.

Vladimir Putin: We agreed earlier that the Government reserve would be used to fund development in Crimea. The reserve this year comes to 243 billion rubles, which were not earmarked for current spending but were set aside by the Government to cover the possibility of a sudden worsening in the global or domestic economic situation. Fortunately, no such thing is happening. There is some tension and some difficulties, true, but no other needs have come up that would require these funds. So, how much of this reserve do you plan to put into Crimea’s development?

Anton Siluanov: This year, we expect to spend around 150 billion rubles.

Vladimir Putin: So this leaves us with another 100 billion for next year.

Anton Siluanov: Yes, around 100 billion rubles will remain.

Vladimir Putin: For these same needs?

Anton Siluanov: Yes, that’s right.

Vladimir Putin: Good.

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