The IMF has increased government spending in 2017, 200 billion.

Anton Siluanov

Photo: Vladislav Shatilo / RBC

Budget expenditures in 2017 can be increased to 200 billion rubles, said the head of the Ministry of Finance. But this will happen only in the case that the state will collect 50% of the profits of state-owned companies in the form of dividends

Budget expenditures in 2017 could increase the level of additional non-oil revenues, told reporters on 5 April on the Moscow exchange forum, the Minister of Finance Anton Siluanov.

The estimated amount of such income — about 200 billion rubles, said Siluanov. However, they will go to the budget, will be executed only if the decision to transfer to the Treasury of 50% of the dividends of state companies, the Minister said. “If there is another solution, we will not have non-oil revenues, and therefore will not and resources for proposals,” the Minister said.

The Finance Ministry is against increasing spending by oil and gas revenues. This could give a positive result, however, the Ministry does not want to “step on the old rake”, Siluanov said in an interview with RBC at the end of February. “It will give a positive result. What’s next? And then we can get into the same situation, which was a year and a half ago: changed external factors, revenues declined, and had to cut the budget. Who cares? We have already passed”, — said the Minister.

Additional oil and gas revenues that the budget gets, because oil is worth more than $40 per barrel, the Finance Ministry aims at the procurement of currency that is credited to the Reserve Fund. Two months of intervention, the Department has purchased foreign currency 183,5 billion rubles. Monthly volume of purchases is decreasing: if in February the Ministry of Finance spent on interventions of 113.1 billion rubles, in March — 70,5 billion rubles., in April, as the message of the Ministry, the planned procurement in the amount of 69.9 per billion.

Monthly volume of purchases of the Ministry of Finance equal to the forecast additional oil and gas revenues, adjusted for the error in the forecast of the previous month. Based on an assessment of additional oil and gas revenues for April, the Finance Ministry will acquire three months in the currency on 253,4 billion.

For state-owned enterprises should introduce key performance indicators, one of them may be just the amount of dividends, said Siluanov at the exchange forum. “If we consider the state investment as an asset, this asset needs to generate income to the state. It will just be to talk about the effectiveness of the management: whether he pays those revenues that the state expects to receive, or attempts to evade, citing the large investment programs,” — said the official. Former Finance Minister and now head of the Center for strategic development Alexey Kudrin has supported Siluanov, noting that the public sector “does not give the benefits that we expect from him.”

A government decree, which obliges state-owned companies to pay dividends of 50% of net profit (under RAS or IFRS, depending on which of amounts is more), was released in 2016. But it created loopholes for state-owned companies, not wanting to give their income to the state. As a result, the dividend in half of the profits did not pay to “Gazprom”, “Rosneft” and “Transneft”. The document was returned for revision to the Ministry of Finance, while state-owned companies acts old rule, involving the payment of not less than 25% of net profit. The Ministry of Finance and Ministry of economic development now agree that state-owned companies can potentially pay 50%, however, the first Deputy Prime Minister Igor Shuvalov demanded specific calculations on this issue, making the decision on dividends was postponed, wrote “Vedomosti”, citing its sources.

Minister Siluanov said about the growth of costs through non-oil revenues should not be taken as a signal of an easing fiscal policy, says the head of “Fiscal policy” the Economic expert group Alexander Suslin. On the one hand, there are many proposals that involve the growth of government spending, on the other, some companies often look for loopholes not to pay, she says. Siluanov’s statement was made to link these things, says Suslina: if the authorities want to increase spending, they must obtain funds from state-owned companies, even if they don’t want to share.

With the participation of Oleg Makarov

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