During the adoption by the government of the items of expenses and income for 2013 and the planning period 2014-2015. The so-called budget rules were actively discussed. It was a long-term program for the use of oil and gas revenues. The need for it is due to the high dependence on profit from resources.
The essence of the budget rule
The logic of introducing the program is that the volume of existing government obligations, expenses, as well as long-term investment projects should be less so than in previous years, tied to the current cost of oil. Budget rules are actually an advance agreement on financial constraints, aimed at preserving funds in case of price fluctuations.
Relevance of the issue
In Russia, there are various fiscal budget rules. This, for example, the rates of certain types of taxes. They are set for regions and municipalities. There are also limit values for public debt, deficit of public funds and so on. The new budget rules for oil pricing in 2012 caused a lot of discussion. The fact is that the state fund was in a strong and rather dangerous dependence on oil and gas income. The adoption of a new order is considered a landmark decision for the financial system of Russia and for the economy as a whole. Budget rules are a method by which it was supposed to eliminate the annual uncertainty, in which erroneous conclusions were often made regarding the size of oil prices in the coming year. The need for the program is due to the fact that the revenues of the federal financial fund are half dependent on the cost of this raw material.
Specificity
For 2013, strategic objectives were laid at the heart of the financial policy and planning period for the next two years. They were formulated in Presidential Decrees, the Concept of long-term socio-economic development of the country until 2020. In addition, the basic provisions enshrined in the Budget Message of the Head of State became the basis. It was planned that in 2013-2015. tasks on socio-economic development will be addressed in the context of the priority of ensuring macroeconomic stability, stability and long-term balance of the financial system. It was supposed to reduce dependence on the external economic situation.
Basic goals
The main tasks that will be solved using the budget accounting rule are:
- Strengthening macroeconomic stability and ensuring the sustainability of the financial system.
- Development of a strategy for the period until 2030.
- Setting the parameters in accordance with which the development of the pension system will be carried out.
- Formation of conditions for the provision of high-quality public services to the population.
- Planning and implementation of a new stage in the development of intergovernmental interactions.
- Providing conditions for the preparation and implementation of the Federal Budget Law for 2014-2016 in software format.
- Improving the apparatus for managing state obligations and assets of the Russian Federation.
- Ensuring openness and transparency of the budget process.
General characteristics of the provisions
Strengthening macroeconomic stability and financial stability are legislated budget rules. This will allow:
- Reduce the dependence of the system on price volatility in the global energy market.
- Increase forecasting accuracy in the long run.
- To form the necessary amount of sovereign funds of the Russian Federation.
The adopted rules for the preparation of a budget application suggest that excess oil and gas revenues be deducted to the reserve fund if the base cost of raw materials increases. The direction of funds was proposed to be implemented before reaching the normative indicator of 7% of GDP. If the predicted cost of oil falls below the base, then the budget deficit arising from the decrease in income will be covered from the reserve fund. After its volume reaches the standard value, it is envisaged to transfer additional income from the oil and gas industry to the National Welfare Fund. Some of these funds can be used to finance infrastructure and other priority programs that do not cause obligations of the Russian Federation.
Implementation Features
Budget rules provide for a number of mandatory provisions. In particular:
- The marginal cost of federal funds should not be more than the volume of income at the base cost than by 1% of GDP.
- The total amount of planned expenses for the coming financial year cannot be lower than the approved federal law for the corresponding financial period of the indicator. In this case, conditionally accepted losses are not taken into account.
- The total amount of planned expenses in the first year of the upcoming period without conditionally approved costs of 2.5% of it cannot be lower than the federal budget approved for the corresponding period.
Mechanism of action
If the average annual oil price over the past 3 years, including the current one, has been set at a level that does not exceed the base price, when budgeting, the latter is calculated based on the average annual price for the specified three-year period. The advantage of this scheme, among other things, is that protection is formed from the likely pressure of the main indicator (as during the Stabilization Fund). The balance of the Reserve Fund at the end of 2008 amounted to 9.8% of GDP, by the end of next year - 4.7%, for 2010 - 1.7%. Expenses from it in 2009 amounted to about 3 trillion rubles. Throughout the life of the Reserve Fund, there have been noticeable fluctuations in percent of GDP during the last crisis. At the same time, a rather prolonged decrease in the cost of oil was observed in comparison with previous unstable years in the country.
Cancel budget rule
A number of experts favor rejecting the adopted program. As an argument, it is suggested that with an increase in the maximum budget deficit, funds in the amount of this excess can be used to invest in the country's economy. According to the Ministry of Economic Development, the growth rate will be significantly strengthened in 2015, when the deficit jumps from 1% to 1.5 GDP (400 billion rubles). In 2014, the figure without applying the rule could be 1.1% instead of the estimated 0.5%. The introduced saving regime negatively affects not only the investment development of the national economy, but also the formation of the social sphere of the state. Some analysts believe that the translation of natural resources into financial terms (accumulation of funds as debt paper obligations of foreign countries in sovereign funds) is not optimal. The costs of developing our own infrastructure, investing in production assets (formation of material stocks) form a different system of the national economy.
In times of crisis, a number of experts believe that an improved and diversified own economic system is more important than foreign debt obligations and may require much less resources to maintain.
Arguments for the program
One of the most important advantages of the budget rule is the provision of readiness for a continued fall in oil prices. The program should allow you to automatically adjust the financial policy for a period of decrease or slowdown in the increase in the cost of raw materials. One of the main goals of its implementation is to ensure macroeconomic stability, and its revision may become a negative sign for investors. At the very beginning of the program’s publication, many decided that the internal rules of the budget institution were adopted. However, the program has nothing to do with them.