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President Vladimir Putin: Good afternoon, dear colleagues,

We meet regularly and always here, it seems. Given the number of parliamentary deputies your party has – the constitutional majority – I think that these consultations with the party, with the party’s parliamentary group, are very important.

I completely understand your desire to focus party work on resolving issues that really matter to the public. Timely decisions have been taken in the social sphere, for example, to increase child benefits, student allowances and address similar matters.

Another example is the abolition of the inheritance tax and the decision to simplify property registration procedures. These measures have been dubbed ‘the dacha amnesty’, and I think this is perfectly fair. It is also good that the procedures for examination of appeals from citizens to the authorities have also become simpler.

I am grateful to you for supporting important political initiatives. The Public Council, for example, has now begun work. Clarifications have been made to electoral law and the legislation on political parties. Laws have been passed to develop civil society, establish procedures for parliamentary control and combat extremism. The Water Code has been adopted. Procedures for registration and use of agricultural land have been simplified. The reduction of the legal prescription applying to privatisation deals has helped strengthen ownership rights. Work has been done to develop bankruptcy and licensing legislation.

Your initiative has brought order to utilities price-setting by municipal services providers, and the law on special economic zones, meanwhile, will help us create favourable conditions for developing innovative business.

Furthermore, United Russia has stepped up its ideological work considerably and has become a lot more recognisable. You have your own political vision of Russia as a sovereign democratic state with a competitive market economy and an effective social policy.

All of this creates a solid foundation for the party to increase its role and significance in the life of our country. If United Russia truly wants to open up new political horizons, it must increase its practical impact today and in the future, for the future of our country. This requires the party to develop its human resources and intellectual potential and to be able to make use of this potential to resolve strategic tasks. Of course, this potential cannot be built up overnight, but requires systematic effort.

In this respect there are several points I would like to note.

First, the party could take part in training people to work in civil service and local self-government. The situation is complicated, especially at local level. This issue has been much discussed both in the Government and the parliament. The human resources situation is complicated. According to information from the Central Electoral Commission, only 19 percent of deputies in the municipal representative bodies were put forward by political parties. This means that the majority of the 34 political parties currently registered were not ready to take on responsibility for the work of local self-government. At the same time, as at May 1, the number of deputies in the municipal representative bodies had undergone a 2.5-fold increase and now comes to 240,000 people. I note that 7,000 of them have not even completed their school education. This is not to question their personal merit and public activeness, but we need to be honest that there is a need to provide deputies with additional training in the skills of rational and efficient administration. Deputies need to learn more about the subtleties of legal regulation, all the more so as they are already working now at local level on carrying out the large-scale national projects and implementing the new demographic initiatives.

One vehicle for this kind of human resources work could be the National Council for Local Self-Government that you have established. Of course it will depend on you to make sure that the council’s work proves useful and responds to the country’s needs and does not limit itself to just the formal organisation of events, conferences, congresses and so on.

Second, young people form the human resources reserve on which the party can draw. But of the more than 2,000 United Russia deputies in the regional legislative assemblies only nine are under 30, if I am not mistaken. Even in the State Duma, where the party has such a large contingent of deputies – 310 deputies in the group – only six were under 30 at the time of their election. These figures do not reflect the age structure in our society, nor do they reflect the real importance of young people and the problems that our country faces in general. Chief among these problems are employment, getting a competitive education, founding a family and buying housing. You will agree that these are all serious issues for the country as a whole, and we cannot hope to resolve them if we do not involve young people. Young people should have the political possibilities to express and defend their own interests. The activeness that is natural to their age will fade fast if they can’t put it to use in anything more than collecting signatures and pasting posters. In this respect I think that United Russia’s decision to allocate 20 percent of places on its election lists to young people is justified. Of course, quotas, be they based on age or sex, are always a controversial solution, and I understand this and understand the doubts and reservations that arise, but some other parties have taken similar decisions and this confirms that such steps are probably unavoidable today and are needed at this moment.

Now, to say a few words about some state policy matters, the tasks before us are clear and were formulated in detail in the [Presidential] Address. Work on these main objectives is woven into the entire fabric of state policy. But we must recognise that the implementation of the national projects is also an independent part of party work. I think that United Russia has sufficient strength and resources to set concrete goals and achieve real results and not just organise public control over the national projects’ implementation. After all, 67 regional heads and several members of the Russian Government are members of the party. In this respect I also want to say that these national projects are not some kind of order from the top, but above all are United Russia’s own projects, because your representatives took part in their development. In essence, your ideas, your demands of the Government, your objectives, form the foundation of these national projects and so I would ask you to regard them as your own baby.

There is also a need for systematic legislative work. Amendments will be required this year regarding the basic maternity capital. The first payments are to be made for children born starting from January 1 of next year. Rapid work is also required to ensure and set new figures for child benefit payments.

I also think amendments need to be made to the Tax Code to exclude state support for families after the birth of a second child from the taxation base.

We cannot lose sight of legislative work to modernise the country’s education system and develop housing construction. Legislative changes are also required in agriculture. In industry, we need to improve legal relations in high-technology sectors such as energy, communications, space, aviation, intellectual services and shipbuilding, that is, in the sectors in which we have competitive advantages.

In particular, we need to draft legislation for the nuclear energy sector’s overall restructuring and operation.

Regarding inter-budgetary relations, work will continue on dividing powers between the federal and regional authorities. The basic principles remain unchanged, namely, that powers and obligations at each level must be matched by financial backing, and that budget spending at every level should be focused on the final result. We need to make our budget spending a lot more efficient, many times more efficient. This is one of the key budget policy and general economic policy issues that we face today.

I want to recall what I said about the armed forces in my Address. I recalled the events of 1999 when we had an army of 1,400,000 men but, as it turned out, no one to do the actual fighting. This situation arose in part, and perhaps above all, due to inefficient budget spending. Unfortunately, this situation persists to this day in many respects, and not just in law enforcement and the armed forces. This situation affects every sector. I ask you to give this problem your particular attention. The issue of efficient budget spending is a question of paramount importance today. This is a big undertaking and it is very important for the country. Success in this work, as in any undertaking, requires a principled position. For United Russia, this position is linked to the State Duma election in December 2007. This will be the first time that we hold elections under the proportional system. I am convinced that the most persuasive argument in an electoral campaign is not generous promises but real action. Whoever can transform public demands into a political programme and practical action that benefits people will win the election. The way voters view United Russia, the party with the majority in parliament, will depend directly – and I want to stress this point as work on the 2007 budget nears completion – not on various small projects that are often quite corrupt in character, but on the general situation in the country. I want to bring this point to your particular attention.

That is all I wanted to say for a start. I give the floor to Boris Vyacheslavovich [Gryzlov].