Putin's Introduction as candidate for the position of Prime Minister

 

Good afternoon, deputies of the State Duma.

 

First of all, I want to thank Dmitry Anatolyevich [Medvedev] for his kind words and for putting forward my candidacy for the post of prime minister of the Russian Federation Government.

 

We have accomplished much indeed over these last years, but we have enormous tasks, immense work ahead of us. And what is going right now is not just about the legal procedures set out by the Constitution and the laws of our country. This is about the fact the each one of us, each one of us present in this hall today or sitting here in the Presidium, must consider not only what has been accomplished so far, but must also look to the future. I think it therefore my duty to explain in detail my vision of the Government’s work over the coming period.

 

I already spoke from this tribune as a candidate for the post of prime minister in August 1999. 

 

The country faced a very difficult situation at that time. In the interests of our country, its integrity and the welfare of its people, we needed to lay party disputes and idle chatter aside and, aware of the seriousness of the situation and our responsibility for the events then taking place, take decisive action.

 

That was the position I took in the words I addressed to the deputies on that occasion. I counted on us being able to unite around common goals, and I was not wrong.

 

Russia has not simply changed since then. It would be no exaggeration to say that it has become a different country. But today, as before, I believe that we need the consolidation of our political forces and the public’s solidarity. All the branches of power need to work smoothly together. The closest partnership between them is in the interests of all our citizens and essential for successful national development.

 

It is clear to me that the Government can be truly strong and effective only if it has the full support of the legislative branch of power.

 

This means that we need to build up cooperation with the State Duma. I hope for the same attitude and the same approach from you, colleagues.

 

I want to add that in the run-up to this meeting today, consultations took place, as you know, with the leaders of the parliamentary factions. These were interesting, constructive and useful discussions. Most importantly, they gave us a sense of the common commitment to cooperation and the readiness to work together for the good of Russia and its interests.

 

I want to apologise from the outset for not holding consultations with the factions themselves. Such consultations will definitely take place. The reason for this situation is that we are about to celebrate an important holiday tomorrow and the President thought it best that we complete all the formal procedures today, so that all the state officials would be able to take part in the Victory Day celebrations.

 

But I want to repeat what I said yesterday to the faction leaders and assure you now that we will work in close cooperation with the entire State Duma, with the factions, with individual deputies and with groups of deputies.

 

At the February meeting of the State Council I presented in detail my vision of Russia’s main development priorities. They have now been drawn up as specific work plans and will, without any doubt, become the basis for the Government Cabinet’s work.

 

I am certain that we have all the possibilities we need for making our economy more competitive and changing its structure by developing ultra-modern production.

 

Furthermore, it is entirely realistic and within our ability to join the ranks of the leading countries in terms of the quality of life we offer our citizens over the coming 10-15 years. This quality of life is measured by indicators such as income levels and social welfare provision, the quality of education and healthcare, the environmental situation and housing provision.

 

Russia has become used to high economic growth, and our people’s real incomes have also been rising fast. Our GDP, calculated on the purchasing power parity basis of our currencies, now exceeds $2 trillion, putting Russia in seventh place in the world. International experts predict that Russia will move up a rung this year and that its GDP will overtake that of Britain, one of the G8 countries.

 

But we must remember that Russia’s economy is an integral part of the world economy and is therefore developing in a climate of growing and increasingly fierce competition. There are many areas in which we still have a long way to go to catch up to the key economic players, and they are by no means standing still but are also moving forward.

 

A difficult situation has emerged on the world financial markets and on the global food market, in which Russia is both a major importer and a big exporter, an exporter of grain, for example. I imagine there will certainly be questions on this subject today. I want to say in this respect that we all know very well that we only imported grain during the Soviet years, buying them from Canada and the United States. Now we are in second or third place in terms of grain exports, practically equal with Canada. This is a subject that we will address separately. 

 

I want to say too that prices for Russia’s traditional export goods are subject to considerable fluctuations depending on the situation. And at the same time, our country has yet to establish a solid presence on the fast-growing markets for science-intensive advanced technology goods. This is the case not only on the export market but even on our own home market.

 

If we do not achieve real progress in establishing ourselves on the markets for high value-added goods and services, Russia will be doomed to see its role in world economic development diminish. This would pose serious risks for our statehood, for our national security and defence capability.

 

As I have said on past occasions, it is therefore extremely important that we make our national economy a lot more efficient and sustainable. As you know, we have big problems with labour productivity. We need to develop by encouraging the use of innovation in all areas. We need to develop our infrastructure, modernise our social sector and put in place a good climate for business activity.

 

I would like to speak in more detail about what we need to do now, over these coming years.

 

Above all, we need macroeconomic stability. In this respect we will continue to pay the closest attention to all aspects of financial policy, especially measures to bring down inflation.

 

We have all felt the effects of inflation. It is the most vulnerable groups in society who feel its effects most strongly. Last year, inflation ran at an average 11.9 percent, but for people in the lower income bracket the figure was 14.5 percent, a calculation based on the goods that they buy. We must achieve single-digit inflation over these next few years.

 

Russia’s growing economic potential and the substantial financial reserves we have accumulated form the solid foundation we need to traverse confidently this period of instability in the world economy.

 

Moreover, there is a whole number of new opportunities that we can turn to our benefit. They include expansion of our national capital abroad (I mean expansion in a positive sense), opportunities for increasing the returns earned by investing state financial reserves, and an expansion of the rouble’s role in international transactions.

 

I am confident that Russia can and must become a major regional financial centre. This is important for broadening the sources of financing for our private sector and for the state.

 

It is in our interests that such a centre contribute to the stability of the global economy and global finances. In this aim, we need to take the following measures to develop our national financial market and banking system.

 

First, we need to optimise the existing infrastructure and put the state financial market regulation system into order.

 

At the moment, one and the same operations by various players on the financial market are regulated in different ways, and this does not make for a level playing field. We need to encourage consolidation of financial institutions and the introduction of modern settlements systems.

 

Second, we need to improve our legislation in the financial sector, including through provisions regulating transactions involving derivative financial instruments.

 

You all know about futures, options, forward contracts and credit notes. Strange though it may seem, our market participants are still forced to use foreign legal provisions, international provisions, including from English law.

 

Third, we need to develop a truly mass-scale class of investors. People, even those with only modest savings, must have the opportunity to help their savings grow by investing them in various sectors of the national economy. For this, we need to work in particular on encouraging the emergence of large public companies that will successfully issue shares on the domestic market.

 

Finally, we need to establish a comfortable tax environment on the securities market.

 

The first legislative decisions should be passed in all these areas by the end of the year and clear action plans drawn up. This is work that we must do together.

 

I think that we have already come close today to building one of the world’s best tax systems. True, the Finance Ministry thinks it is probably the best already, but I still have my doubts. I think that there are areas where we still have work to do. We need to do more to ensure that our tax system encourages economic modernisation, increased investment in infrastructure and new technology, in education, healthcare, and improving our citizens’ housing conditions.

 

I want to explain what specific steps this will require.

 

First, we need to exempt as much as possible from taxation spending by individuals and organisations on education, healthcare, pension provisions and the payment of interest on mortgage loans.

 

Second, all organisations providing important social sector services (whether state, municipal or private) should be treated according to the same taxation rules after the transition to new financing mechanisms. This would constitute a big step towards developing competition and attracting private investment. Above all, as I have already said, this is essential in areas such as healthcare, education and culture.

 

Third, in order to modernise our industrial production, we need to liberalise our policy regarding depreciation. Starting from next year, additional mechanisms should be introduced for accelerated depreciation of certain categories of capital goods, above all technical equipment.

 

We also need to enlarge the range of tax incentives for research and development work, especially in what the state sees as priority areas.

 

We are all aware of the high energy prices on world markets at the moment. The oil companies are indeed making good profits. But a substantial share of these profits goes to the budget. I discussed this with the faction leaders yesterday and they were surprised and asked me to clarify the figure. I can tell you today that through various means such as the subsoil tax and customs export duties, the budget receives 75-80 percent of the oil companies’ profits. This is one of the main reasons for the growing number of low-debit wells taken off-line, and for the not very active efforts to explore and develop new fields.

 

In this context, if we want to encourage growth in producing and refining oil, the time has come to decide on reducing the tax burden on this sector of the economy. We need to ensure efficient administration of earlier decisions on the tax regime applying to worked-out deposits.

 

Serious discussion is underway on bringing down VAT, something I spoke about at the expanded session of the State Council. I think that we need to reach a final decision no later than this August on the strategy and tactics for reducing the tax burden and on when and by what amount we should reduce taxes in order to create new incentives for economic growth in the country.

 

Finally, we need to free our citizens and organisations from the time wasted on drawing up and putting together forms and documents with information that no one needs. Compliance with the state’s demands for payment of all taxes set by law should go hand in hand with the removal of red tape in this area.

 

All legislative initiatives in the taxation area should be submitted by the Government during the current and autumn sessions of the State Duma.

 

These steps would give our economy, our business and our social sector significant new resources for development. The experts calculate that this could represent hundreds of billions of roubles a year. Furthermore, reducing the tax burden is a substantial incentive for creating a favourable business environment in the country. In this respect, we hope that business will reply in kind by coming out of the shadows and working openly and above board.

 

We also need to continue expanding overall business freedom. In this respect the Government is launching a major campaign to remove administrative barriers in the economy. This includes cutting back the control powers of the inspection bodies and replacing permission-based procedures for opening and conducting business with notification-based procedures. We need to cut back sharply the number of activities requiring a license and the number of goods and services that require compulsory certification.

 

At the same time, we need to expand the application of compulsory liability insurance. No matter how unpleasant this might be for business, we need to do this if we want to move over to normal and civilised procedures and guarantee the interests of all participants in this process.

 

A new competition law was passed back in 2006, and we need to work on its effective implementation now and on carrying out an effective anti-monopoly policy. We must be tough in preventing monopolists from dipping their hands into others’ pockets.

 

We have already done much to improve corporate governance culture and develop the relevant legal provisions. The market capitalisation of Russian companies speaks for itself, and you know this well. But there are still loopholes in the law that make it possible to unlawfully appropriate others’ property.

 

I call on you, colleagues, to support the package of anti-raider laws the Government has drafted, so that we can finally do away with this relic of the 1990s.

 

Colleagues,

 

Aside from the general and universal measures aimed at developing the economy and creating a favourable business environment, we also need special instruments for supporting specific sectors, especially the sectors that play a key part in national development and therefore require the deputies’ and Government’s direct attention.

 

I want to look at some of these sectors today, primarily, infrastructure, agriculture, and the high-technology sectors, including shipbuilding and aviation.

 

Our key task is to eliminate as much as possible the economic growth bottlenecks caused by the lag in infrastructure development.

 

The Government has drafted the Transport Development Strategy for the period to 2030. This is an ambitious document in the good sense of the word. Specific projects will be set out in the new federal targeted programme for transport system development through to 2015. Total financing for this programme will come to more than 13 trillion roubles, including 4.7 trillion roubles from the federal budget. This means that financing from federal sources will double by 2010 compared to 2008.

 

We need to get private investors increasingly involved in infrastructure development, and to do this we need to ensure competitive conditions for business participation in infrastructure projects over the long term, including through new tariff policies.

 

I think that tariff regulation of infrastructure should be based on the following principles. First, long-term tariffs should guarantee returns for investors and creditors and market revenue from the funds invested. Second, the level of tariffs should be pegged to the quality of the services provided and there should be economic incentives to keep costs down.

 

Pilot projects in electricity distribution networks using this new scheme are set to begin in July this year. By 2011, long-term tariff regulation will be in place in energy networks in every region in the country. Ultimately, this practice of long-term tariffs will extend to all infrastructure. We need to realise that if we do not ensure this kind of stability we will not achieve development in this sector of the economy.

 

But we need to do more than simply raise tariffs in the electricity, gas and transport sectors. We need to make our economy more energy efficient in general.

 

No one in the world wastes resources the way we do. The state must encourage economic actors to introduce energy-efficient technology, and at the same time expand the system of targeted social support for citizens, providing sufficient levels of support according to rules and procedures that are neither burdensome nor humiliating for people.

 

We have already begun restructuring the country’s shipbuilding and aircraft manufacturing sectors. Support for these sectors’ development is one of the Government’s priorities. We have already established the United Shipbuilding Corporation. In 2009, the Government will complete the process of reorganising the state unitary enterprises that comprise the corporation as joint-stock companies.

 

The United Aircraft Corporation also has important work ahead and its goal is to become one of the world’s leading aircraft manufacturers by 2025.

 

Finally, we need to intensify our work to develop the country’s agriculture sector.

 

The sharp rise in food prices on the world markets that we have observed since the middle of last year is having a real impact on our domestic market and on our people’s welfare. We need to be up front about this and recognise this fact. It is therefore a crucial economic, social and political priority to ensure the stable functioning of our domestic food market and protect it from sharp price fluctuations in the world. This is one of the biggest priorities for the Government at the moment.

 

Colleagues,

 

As we have said before, there can be no building an innovative economy without constantly developing the human factor, building human capital and giving individuals the opportunities for full personal development. This requires major investment in health and education and in ensuring secure and comfortable conditions for life.

 

The Government will carry out this work in close partnership with the state bodies of power, the municipal authorities, civil society institutions and the business community.

 

Our work on the priority national projects calls for us to continue carrying out far-reaching systemic transformation in the relevant areas. These transformations will be backed by substantial resources.

 

Consolidated budget spending on education development should reach almost 2 trillion roubles in 2010, and the same amount will be spent on healthcare. This is many times more than what was spent a few years ago. Compared to 2004, for example, this represents a four-fold increase in spending on education and a 4.5-fold increase in healthcare spending.

 

New generation basic education standards will be adopted soon and work will begin on developing a national education quality evaluation system.

 

The regional and municipal authorities must undertake serious work on primary and secondary vocational education, which comes under their responsibilities. Many of our vocational colleges are trapped in the past, locked into a bygone era, and we need now to reorient them towards modern economic and production demands, towards the needs of the job market today. This means that we must work together with employers to modernise the teaching and learning process in these establishments.

 

The experience of establishing the Southern and Siberian Federal Universities has helped us to develop new organisational and legal methods for developing tertiary education. It has also helped us develop modern financing mechanisms and mechanisms for integrating education, science and industry.

 

At the federal level, we will support and carry out programmes to establish a whole network of modern science and education centres in Russia. We are looking at organising 16-20 such centres, some to be developed from scratch and others opened at existing universities.

 

Aside from the universities themselves, these centres will include academic and sector-based research and development institutes. This kind of integration will help these centres achieve a place among the world leaders more rapidly and make their mark as major national and international research facilities. We will definitely establish one such centre in the Russian Far East, where it will play a key role in developing the entire region.

 

As you know, we are preparing for the APEC summit in the Far East. We are always being asked what we intend to do with the buildings, installations and resources that will be invested in this big event. Dmitry Anatolyevich Medvedev proposed handing the whole complex over to science and education, and I think that this is an excellent initiative.

 

We will soon adopt the federal targeted programme, Academics for an Innovative Russia in 2009-2013. This programme will help us to address the important issue of training new researchers and educators.

 

Now, turning to healthcare development, we cannot be satisfied with the level of affordability and quality of medical care we have today, or with the continued neglect of patients’ rights. In this respect we need to establish a genuinely effective system of medical insurance and ensure a transition to modern financing mechanisms. We need to complete work on developing medical care standards.

 

Money for medical establishments should be allocated on the basis of actual medical services provided. Individuals should be able to choose their own doctor, medical organisation and medical insurance company. At the same time, we need to make our citizens more responsible for their own health and ensure they make rational use of public goods such as the healthcare system. But we also must not forget the responsibility medical personnel have towards their patients.

 

To achieve our objectives in this area we need to pass all the necessary laws and regulations over the course of 2008-2009. The federal budget law for 2010-2011 should make provision for allocating the funds required for improving the healthcare system overall. I’d like to stress: all of this organisational and preparation work should start already in 2008.

 

I cannot but mention another issue that is directly related to healthcare and our nation’s survival. Smoking and drunkenness have become real catastrophes for our country. People in Russia smoke and drink twice as much as people in the majority of developed countries. We need to combat this scourge, but not through bans or price rises.

 

What we need to do in this area is make the money available for developing sports and creating good conditions for recreation and leisure. We also need to carry out effective information and propaganda campaigns promoting a healthy lifestyle. A public procurement effort from the state is needed here. Of course, admonitions and appeals alone will not be enough to solve this problem.

 

Housing is the next big priority on our agenda. The priorities here are to steadily increase the amount of housing being built and make it more affordable for families with various income levels.

 

Housing construction has doubled over the last seven years, but even this kind of growth rate is clearly not enough to satisfy current and increasing future demand from our citizens, and this is perfectly natural.

 

We need not only to build more housing but to make it of better quality by using energy-saving technology and environmentally friendly materials. We also need to organise as swiftly as possible an industry for rapid construction of individual housing. We will commence major projects to build new low-rise housing districts this year. Such projects will take place in all the country’s regions. We need to speed up procedures for bringing new land onto the market and equipping sites with the necessary engineering infrastructure.

 

A presidential decree has been signed for this purpose, establishing the Federal Housing Construction Development Facilitation Fund. Land that is in federal ownership and is not being used at present for its designated purpose will be transferred to the Fund.

 

Finally, we need to continue work on improving lending conditions on the housing market and develop housing mortgage loans. We must not overlook, either, construction of social housing. The faction leaders reminded me of the importance of this issue when I met with them, and I fully share their view. 

 

Dear friends,

 

Tomorrow we will celebrate our main national holiday – Victory Day. We will honour the soldiers of the Great Patriotic War. It is our sacred moral duty to look after our veterans.

 

It has already been decided that the issue of providing housing for veterans should be fully resolved by May 9, 2010. This problem should be completely settled by then. Furthermore, war invalids should be provided for fully this year with motor vehicles suited to their needs, or, if they wish, with suitable monetary compensation. The issue of transport for war veterans should be fully resolved this year and the housing issue fully dealt with by May 2010.

 

We must never forget the lessons of that war. Only combat-ready and well-manned armed forces with high moral spirit can protect our country’s sovereignty and integrity.

 

More than 300 new models of military hardware have been commissioned by the armed forces since 2001. This is not enough. It is not a bad figure, but it is still not enough. The main problem is that series production of many of these models has still not begun. The armed forces are not buying them in the necessary quantities. These are all issues we need to address. Support for the armed forces remains without question one of our priorities.

 

The budget makes full provision for the money needed to provide for military and civilian personnel dismissed from the armed forces, and to provide for permanent housing for servicemen by 2010. By the end of 2012, we should have finally completed the construction of service housing.

 

Colleagues, we must also recognise that the current wage system in the armed forces, despite regular indexation, does not make it possible to pay decent wages to those working for our country’s security, and in the most important areas: those on patrol on board submarines and strategic bombers, those in the air defence and strategic nuclear forces, those in units that play a key part in ensuring Russia’s defence capability.

 

I therefore propose that we establish a system of special material incentives for this category of armed forces personnel. And I propose that we immediately allocate not less than 25 billion roubles for this purpose in 2009. This amount will increase steadily over subsequent years until it reaches the level needed to ensure fundamental improvement in wages for all armed services personnel who come under this category.

 

We will, of course, also continue our active work to increase wages in general in the country and improve the pension system.

 

I think that we will need very soon to make a decision of great importance, a decision of great importance for the economy and the social sector. This is a decision that has aroused heated debate for some time now. But we can longer put it off, and there is no need to delay any longer. I will explain what I am referring to.

 

You know about the agreement the United Russia party reached with the Federation of Trade Unions on ensuring that the minimum wage is not lower than the subsistence minimum.

 

I share this view. But at the same time, we must remember – and this is something I discussed yesterday with your colleagues - that the subsistence minimum varies greatly from one region to another and that wage conditions also vary greatly from sector to sector. This is something we simply must keep in mind and take into account. Evening out the subsistence minimum and the minimum wage is above all about fighting poverty, but if we want to fight poverty effectively, we also need other measures. Going by the opinions of experts and the experience of other countries, these measures could be more targeted in approach and produce better results.

 

But I think that during this parliamentary session we must nevertheless fulfil the promises made and pass the law stipulating that as from January 1, 2009, the minimum wage in the country will be set at 4,330 roubles. This figure was chosen because it represented the subsistence minimum in the country during the fourth quarter of 2007, and was the confirmed figure calculated at the time the legislative decision was made. We cannot pass such laws based on forecasts. We calculate them in hindsight, based on the results of past years, and the latest figure confirmed by the Government was for the fourth quarter of 2007, and I therefore propose that we use this figure as the basis for establishing the minimum wage.

 

I would also like to say a few words on inflation.

 

Our plans for the coming years include indexing wages in such a way as to exceed forecast inflation.

 

In order to ensure that the public sector functions in the new conditions, we need to carry out a full transition to a new wage payment system. Provisions for financing this transition should be made in the budget. Colleagues, this involves substantial expenditure. I will not name the figure now. But if we want to introduce this new wage payment system and do it with as little pain as possible for people and with as much benefit as possible for the development of our economy and our social sector, we need to make the necessary funds available. We will be turning to you in this respect.

 

Together with the regional authorities and the trade unions, the Government will draw up specific plans for combating poverty by the end of this year. The deputies, of course, will also be involved in this work. As the tripartite agreement makes clear, this work will take into account the possibilities of the individual regions and the interests of the different economic sectors, as I mentioned above.

 

We need to establish a sustainable pension system for the long term. We need to substantially increase the real size of old-age pensions, and we must make it our particular priority to increase the income of older pensioners, that is to say, those now unable to supplement their pensions by taking on work, but who face big health costs and urgently need more money in order to look after their health.

 

In setting the minimum pension we cannot continue to use an ‘average level’ as a reference, but need to ensure that pensioners’ incomes (taking into account their pensions and other forms of social support) are not lower than the subsistence minimum in the region in which they live. Targeted supplementary payments and other social support measures decided by the individual regions should be the main instruments here. This will require financial support from the federal budget, of course, and this is also something we will have to provide for.

 

We need to expand voluntary pension savings programmes for people currently in the labour force. The federal law on additional insurance payments to the individual savings component of the pension and state support for pension savings has already been passed, for which I thank you. The expenditure required for this law must be taken into account when drafting the federal budget starting from 2010. We cannot yet put an exact figure on this expenditure, for we do not yet know how many people will decide to take part in the programme, but we have forecasts, and they suggest a large figure that will call for the provision of very substantial funds for pension reform.

 

Overall, to give you a glimpse of the workings behind the scenes, we have been discussing all of these issues practically every week and we think that we do have the resources needed for this work.

 

I think that practical implementation of all of these measures will make it possible to provide decent pensions for those who have already retired and for those who will retire in the future.

 

Pension payments and the calculation of public sector wages will all take inflation fully into account. We also plan to carry out regular indexation of child benefits and the maternity capital. Given that the birth rate is increasing, demand for these funds will also increase. But this is simply yet further confirmation that the demographic policy measures we are implementing are the right ones and are producing results.

 

To remind you once again, 34,000 more children were born over the first quarter of this year than over the same period last year. This represents an increase of 9 percent.

 

Deputies,

 

Reaching these goals requires us to make serious improvement to the whole system of public administration. This includes work at all levels of the executive branch and local self-government, and issues that require serious legal regulation.

 

I think that we have additional possibilities for the further transfer of part of the federal powers to the regions. Of course, this needs to be accompanied by the introduction of a system for objective evaluation of the executive authorities’ performance in the regions. 

 

Furthermore, it would be an expedient step to transfer a considerable part of the functions currently carried out by state bodies to the non-state sector, making continued use of the public procurement mechanism and the possibilities for self-regulating organisations.

 

Overall, we need to decide on the size, structure and aims of the state sector. Dozens of fully state-owned enterprises are not making any modernisation effort, depend exclusively on budget money and, unfortunately, sometimes operate at a loss. They have no motivation to optimise costs, try to make a profit and put the necessary quality into fulfilling their orders.

 

It is high time to introduce modern principles for state investment and budget spending. These funds should not just disappear like water into sand, but should produce real and tangible results.

 

There is simply no excuse for the kind of situation we see today in the area of state spending. Construction projects often cost several times more than similar projects abroad. We have begun examining implementation plans for the major projects you are aware of. It is quite simply amazing that one and the same type of facility costs us several times more than in Western Europe. Our energy costs are lower, our labour force is cheaper, everything is cheaper in fact, but the project cost comes out more expensive. And it is not that the calculations are wrong, no, the experts arrive at these calculations and they all go through an expert evaluation process. Nor is it a case of thievery, though theft is of course a huge problem, and is something the prosecutors and law enforcement agencies need to help us combat. The problem is that we have outdated systems for evaluating what needs to be done. Everything is calculated according to construction regulations dating from the 1960s, and the costs are constantly revised upwards and upwards, and this is all done correctly. 

 

We have just as great a problem with current costs. They increase from year to year, and at the same time the number of staff in the executive bodies and institutions also swells, which all goes to produce a dubious outcome to say the least.

 

As I said, state and municipal institutions have practically no incentive to improve the quality of the services they provide. The budget pays them for the fact that they exist rather than for the provision of services of a decent standard. But it suffices for a customer to turn up with actual money and everything changes in an instant: they fuss over him and run around for him. The conclusion is obvious: budget money needs to be just as actual and real.

 

Where possible, we need to introduce financing for state services based on specific public procurement orders. State bodies and organisations should receive budget payments for the provision of the necessary volume and quality of services. Experiments in this area are already underway and the results are positive.

 

Coming to the end of my speech, I want to go over the future Government’s priorities once again. These priorities are set by life itself and the need to ensure a future of lasting prosperity for our country and people.

 

We need above all to establish the conditions for full development of the individual through the improvement of education, healthcare, science, culture and an effective social policy.

 

We need to set our economy on an innovative development track.

 

We need to develop our infrastructure: transport, housing, utilities and energy, social, financial and information infrastructure.

 

Finally, we need to improve the work of state and public organisations. This includes the Government, the ministries and agencies, the regional authorities, local self-government and non-commercial organisations.

 

All of these areas of work are clearly interlinked and cannot develop separately from each other. Coordinated and simultaneous work to achieve the objectives we have set calls for highly professional and responsible work in the Government, and this is just what I intend to achieve.

 

In conclusion, I want to thank once more the current members of the State Duma for their constructive cooperation and for supporting all of the initiatives put forward over these last months.

 

I hope that the legislative authorities will continue to work with the federal Government in this spirit of cooperation and mutual support.

 

Russia has grown considerably stronger over these last years. We have sufficient resources to be able to achieve even more ambitious goals and resolve even more complex problems. The important thing is to make competent, appropriate and effective use of the resources we have built up.

 

For my part, I am ready to spare no effort in achieving these goals and obtaining new and important results in the interests of a prosperous Russia and a decent life for our people.

 

Thank you for your attention.

 

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