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President of Russia Vladimir Putin: Good afternoon, colleagues.

Today we continue our series of consultations on drafting the federal budget for the next three years.

I remind you that a whole number of meetings on drafting the budget for 2009 and for the planned period of 2010–2011 have taken place this month. We have determined the real possibilities for taking on new expenditure commitments, that is to say, what we are talking about now is additional expenditure that was not planned earlier as part of federal budget spending.

We made a detailed examination of the biggest spending priorities the budget should reflect. These include, above all, measures to strengthen the pension system, raise pensioners’ incomes, and improve the affordability and quality of healthcare services. We also plan to increase spending on public sector wages and the wages of law enforcement personnel.

Another priority for our attention is wages in the Armed Forces, especially for those serving in areas that form the backbone of Russia’s defence capability, those who ensure our people’s security. I have asked the Defence Ministry to examine this issue and I hope that the Defence Minister, together with the Finance Minister, will present their proposals to us today.

We have also defined the main directions for state investment and the forms in which it will be carried out. We all know that state investment is far from always effective, and this requires us to be even more attentive in our work because we also know that in some areas there is no getting by without state investment. I am thinking here above all of national security, and modernising and developing the social and transport infrastructures.

I would also like to highlight once again the main principles that we need to place at the centre of our work on drafting the three-year budget. Most important of all is that all of our commitments should be absolutely realistic and able to be fulfilled. Empty promises with no financial base to back them up are of no use to anyone. Of course, budget resources should be made to work as effectively as possible to achieve our country’s strategic economic and social development goals, to pursue innovative and systematically coordinated development. And, of course, we also need to pay very close attention to maintaining macroeconomic stability.

All of these areas are key conditions for our country’s continued development, and for consolidating the positive results that Russia has achieved over these last years.