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Homeland Security

Address to the Nation

June 23, 2020
17:00
The Kremlin, Moscow

President of Russia Vladimir Putin: Citizens of Russia,

I first addressed you on March 25 in connection with the spread of the coronavirus infection.

Only three months have passed since then. Usually, such a period – one quarter – flies quickly, sometimes even unnoticeably. However, during these, without question, difficult days, weeks and months, we all had a completely different sense of time. Too much went into this period.

It was about drastically changed settings, forced restrictions on work and socialising, anxiety and fears, even bitter losses and separation from relatives and loved ones, thoughts about what will happen tomorrow, how to protect loved ones from misfortune, how to provide for family and children, and support parents.

But in spite of everything, it was also a time of hope and gratitude to friends and even strangers who did not fail in these difficult times, and pride for those who showed their best qualities.

It was not easy for anyone. Importantly, our country and society were not confused, but, on the contrary, as it happened more than once in our history, many people were united by a clear understanding of the situation, the realisation of the real threat and the fact that we can only fight and defeat it if we stand together, and that life is of paramount importance. We acted based on these values, which is why we were able to provide a response to this challenge of enormous complexity.

Friends,

I would like to once again sincerely thank all of you for taking responsibility for your health and safety of your loved ones, and for the mutual support and dignity with which you, the citizens of Russia, got through the most dangerous stage of the epidemic and the inconvenience and complexity of forced restrictions and self-isolation. On a separate note, I would like to mention volunteers – whose ranks swelled during this time – who took care of the elderly and other people who needed care and attention.

You may remember that the virus started spreading across the world like a wind-whipped fire, ever since the first reports came. With the epidemic, time split in half: there was a before and an after.

From the very outset, we monitored the situation daily, working with experts and researchers, and contemplated various scenarios, fully conscious that the danger was near, since major pockets of infection were near Russia's borders.

It is for this reason that the fight against the epidemic started along the perimeter of our country. We stepped up sanitary controls at our borders, and these measures paid off, enabling us to fend off the first blow, delay the epidemic, its peak, for a month and a half or two months. Therefore it was back then in February and early March that we were able to win precious time, which enabled us to do everything to save tens of thousands of lives, and I really mean tens of thousands.

We saw that we could counter the epidemic, and understood that what mattered the most was to be forward-thinking and proactive in learning from the experience of other countries, preparing ourselves and using the time we had to consolidate and mobilise the reserves we had, and increase the capabilities of our healthcare system and manufacturing.

It was also obvious that in today's interconnected world it was impossible to completely shield ourselves from this threat. Sooner or later, the virus would penetrate our homes, our borders. This was clear to us.

When this happened, we acted on the basis of expert advice and did what had never been done before. We took an unprecedented step by declaring a period of non-working days, first for a week until April 5, and then for a total of more than a month, until May 11. The developments that followed proved that this measure was timely and justified. Once again, this won us some time in the fight against the epidemic. Once again, we saved human lives, and this is what matters most.

We decided not to adopt any one-size-fits-all approaches. We all know that Russia is a vast country, in fact the world's largest. The situation varied from one region to another in terms of the pace with which the infection was spreading and the scale. With this in mind, we opted for a flexible model from the outset. There were decisions taken at the federal level, and they still are. At the same time, we gave additional powers to the regions to enable them to choose their tactics depending on the situation on the ground, and in coordination with the Government. This approach paid off. By the way, a number of other countries used these practices. I would like to thank the heads of regions, cities and municipalities, and all who had the duty to keep working during this period. I would like to thank them for their sense of responsibility and for their coordinated action.

Indeed, the situation remains difficult in a number of Russian regions, including Tyva, Karachayevo-Circassia, the Yamalo-Nenets and Khanty-Mansi autonomous areas. But I would like to emphasise that we have already developed an immediate response mechanism. No one will ever be left in trouble. All of Russia will certainly come to the rescue. If necessary, we will pool all resources, including our leading medical centres, the Armed Forces, the Emergencies Ministry and volunteers – the way it happened in Daghestan, the Trans-Baikal Territory and other regions.

Together we have proved that we are capable of addressing extremely complicated tasks. Our workers, engineers and managers did everything to reconfigure the work of enterprises in a few weeks' time. They were able to dramatically boost the output of personal protective equipment. And, what is very important, Russia is one of the few countries that has started its own production of effective drugs for the treatment of the novel coronavirus infection.

In extreme conditions, the country's energy system, utilities, transport and communications continued to work steadily and reliably, and the retail industry provided people with essential goods. In a short time, university professors and teachers temporarily transitioned to remote learning. The academic year was not interrupted in schools, universities or colleges.

I would like to sincerely wish all the best to this year's school leavers who will soon be taking their National Final School Exam (EGE), in big cities and rural areas. I am now addressing rural youth, rural students – you have role models to follow. Your parents have made every effort to sow crops this spring, so that Russia would have a good harvest. And it is definitely going to be good this year.

Friends, you have really done something incredible – each in their own place, in their own region, in their own field, you did something that seemed impossible. In record time, new facilities were built and hospitals repurposed. Our military builders alone erected 16 multipurpose centres for patients with COVID-19. And soon another five such centres will open. In mid-March, hospitals around the country had about 40,000 specialised beds to help patients with the coronavirus infection; by the beginning of June, we already had over 180,000.

We are keeping this reserve on high alert. And as I said, we will continue to do so, even though daily infections are declining. In Moscow and the Moscow Region, which were the first to encounter the outbreak, infections have fallen to a fraction of what they once were.

Let me stress what's important: this positive trend is noted against the background of an increase in the number of tests. Today Russia is carrying out more tests per 1,000 patients than the world's other major countries. The total number of tests exceeds 17 million.

I am not saying this to compete with anyone, not at all. It's different. Such a large number of tests helps us identify the disease at its early stages, even if it is symptom-free, which means breaking the infection chain and preventing it from spreading. This saves our people's lives.

On the whole, we have managed to make the epidemic recede and we are reaching a turning point. However, the virus remains dangerous. Thousands of people have to face the illness every day. Please remain focused, careful, and alert, especially until the mass production of an effective preventive medicine begins. Right now, 14 Russian federal scientific centres are working on a vaccine against the coronavirus. Clinical tests of the first samples have already begun.

I understand that we all want to get such a necessary medicine as soon as possible. However, just one principle can be used here: the well-known medical principle, do no harm. There must be one hundred percent confidence that the vaccine is effective, reliable and safe for people of all ages and in all states of health.

Let me also add that, although the vaccine is essential, it is not a magic pill. The threat can only be countered by complying with all the sanitary and preventive measures. And, of course, the healthcare system plays an enormous, key role here.

The critical overloading of hospitals was the main reason for the high death rate in many countries.

The epidemic showed that the Russian healthcare system can effectively respond to emergencies and quickly increase its capabilities. As I have already said, this is to a large extent a reflection of the experience and principles of medical care organisation in Russia, accumulated by many generations of experts, even during the time of county medicine and in the Soviet era. This is also a result of the systematic work we have been carrying out during recent years, fitting our hospitals and polyclinics with advanced equipment, diagnostic tools, and computer tomography scans that are needed today so badly.

Of course, people dedicated to their work and calling are the heart and soul and the mainstay of our healthcare system. I want to once again thank the doctors, paramedics, nurses and other specialists who bore the brunt of the epidemic, and are now fighting for each patient and helping their colleagues in other regions.

We are all aware of the tremendous burden that fell on you from the very outset of the epidemic, when the virus was almost unknown and its behaviour unpredictable, when you had to find out how to treat sick people, to learn new methods and medicines and to risk your lives daily trying to save the lives of other people.

To support you and to provide you with everything you may need is the sacred duty of the state. We will continue to do our best in this regard. We will be on top of these matters, including financial support.

As you may be aware, incentive payments were provided for medical workers involved in fighting the epidemic. We have made additional funds available to the regions for this purpose.

In addition, we established special federal bonuses for the doctors, nurses, and ambulance service personnel who directly provided help to patients with the coronavirus infection.

Our colleagues in the Government and the regions fine-tuned this absolutely new mechanism and worked to remove its imperfections, which, of course, were there, and did so literally in manual mode. This system has been effectively built. So, almost 350,000 medical workers, including, over 71,000 doctors, will receive federal bonuses this month, June.

The fight against the epidemic continues, as does the hard work at the hospitals, outpatient clinics and ambulance stations. So, as I already mentioned, it was decided to extend these payments throughout July and August.

Notably, incentive payments and bonuses are not only tax exempt, but will also be taken into account when calculating holiday pay. This decision has already been made. This means that the specialists will receive increased holiday pay, regardless of duration of their vacations.

We have provided additional payments for employees of social institutions, such as boarding schools, assisted living homes, teachers, psychologists and medical personnel. They are now working continuously in two-week shifts to minimise the risk of contagion and thus protect the people they care for.

Payments for such specialists will accrue from April 15 to July 15. I also propose extending them for two more months, that is, until September 15, and, of course, as in the case of medical workers, to take them into account when calculating holiday pay.

Let me reiterate that, overall, the Russian healthcare system was adequate in its response to the epidemic. At the same time, it highlighted and elicited challenges that have yet to be resolved. We all remember that despite the dedicated work of our doctors, there were issues with offering elective care to patients suffering from other diseases.

We must learn from this experience. The substantial funds we have invested in re-equipping hospitals, purchasing equipment and training doctors over the months that we have spent fighting the epidemic have already borne fruit and will contribute to improve the healthcare system in general. Still, a lot has to be done to improve the quality of and access to treatment, to retrain medical workers, and to restore, upgrade and modernise medical institutions, including using digital technology.

We will definitely do this, primarily as part of the programme to upgrade primary care. We will take into consideration our experience and the challenges that we faced. Let me emphasise that we will maintain all the resources that have been allocated for these programmes. These are substantial amounts, exceeding 500 billion rubles.

I would like to make a special point on a subject that goes far beyond healthcare and is a sensitive issue for the whole of society. I am talking about treatment for children suffering from severe conditions, including rare diseases, the so-called orphan diseases. There are already federal and regional programmes to this effect. However, quite often parents have no hope apart from turning to charities or trying to raise funds online in order to pay for treatment. Of course, I am grateful to all who respond to these requests, and I sincerely thank all those who try to help.

However, this calls for a system-wide, state-level solution. We need to designate a reliable and permanent source of funding. Every child, every family faced with such hardship must get the help they need.

What can I say in this regard? What is my proposal? Since 2001 we have lived with a flat income tax rate. At the time, introducing it helped us to make sure that salaries and incomes were officially declared, as well as to streamline tax administration and make it easier to understand. The fact that people with different income levels have to pay the same 13 percent tax even seems unfair at first glance. If we consider that personal income tax collection improved after the flat rate came into effect, and I am talking about a substantial increase, and the state was able to use these new proceeds to fulfil social projects, it becomes clear that this is not a question of fairness.

Today, having reached new heights in tax management, having introduced digital technology, we can adopt a more differentiated approach to distributing the tax burden and use additional tax proceeds to address specific priority social targets.

In this context, I propose changing the income tax rate for individuals earning an annual income of more than 5 million rubles from 13 to 15 percent, effective January 1.

To make it clear, this tax rate will apply only to the amount in excess of the 5 million rubles per year, not the entire income. Still, this would generate some 60 billion rubles for the budget. I propose to 'colour' these funds, as experts would say, so that they are not used for any other purpose, and allocate them for treating children suffering from rare diseases, buying costly medicines, equipment and rehabilitation solutions, and performing high-technology surgeries.

Let me emphasise that all the existing programmes for treating rare childhood diseases will definitely remain in place. The funds I referred to, these 60 billion rubles or so, will be a supplement to the resources that are already being allocated to offer high-technology medical care and medicine.

Of course, we must make sure that there is no red tape and develop an effective mechanism in direct dialogue with civil society. I believe that the guiding principle is clear: the decisions to use these funds must be transparent and perfectly frank, so that there is total trust in this regard. Only doctors and community activists, people who devoted their lives to helping sick children and to working in non-profit, charity organisations, who proved their integrity and have a spotless reputation, can take these decisions. We need to create a mechanism of this kind.

Friends,

This epidemic has dealt a severe blow to the global economy. Trade, the work of enterprises, and cooperation ties have been disrupted by quarantines and restrictions. And perhaps the most pressing problem in almost all countries is shrinking employment, the growing unemployment.

Russia, too, was affected. According to estimates, in April, when restrictions were introduced and non-working days announced, Russia's GDP fell 12 percent.

In fact, a global recession began, a contraction of the global economy. All the consequences and the depth of this crisis have yet to be evaluated. But it is obvious even now that a new reality is taking shape in the world. The globalisation and integration processes are going through a difficult test, and leading countries are making their choice in favour of technological and industrial independence. Because they understand that in this situation, in matters of security and development, they can only rely on themselves – on the human, workforce, and scientific potential of their countries.

For Russia, this is also a serious challenge, and we must take this into account while making and adjusting our strategic plans. This work is already underway. And these steps, the new measures that I will talk about today, are not just aimed at addressing urgent problems. They should reinforce and strengthen our long-term priorities. This is how my colleagues and I see it. We also take into account the conclusions that we made during the coronavirus response and relief efforts.

Perhaps the main thing here is to reaffirm the underlying principle – direct support of people, investment in education, healthcare and preserving the nation, demography are key to the growth of the national economy, the sustainable and dynamic development of the country, as well as freedom for people and the removal of barriers for entrepreneurs and investors, for all who are engaged in real work and creation. And of course, the effective, organising role of the state is important, with its responsibility to correctly identify priorities, create opportunities and conditions, concentrate resources for development, and do so through a dynamic, meaningful, direct dialogue with society.

This is the logic we are being guided by in planning our actions. From the very beginning of the fight against the epidemic, our main task was to preserve the incomes of Russian families, maintain employment, help people, first of all, help them deal with their problems. This is the first step to supporting the economy as a whole.

Let me remind you that the main criteria for supporting businesses was to make sure that they keep people employed so that those working in the affected sectors continue to earn their salaries. This was the idea behind granting interest-free loans, writing off tax payments and social security contributions for the second quarter, and offering employers direct state subsidies so that they can pay out salaries. We scrupulously followed the principle whereby most of the support goes to companies that care for their personnel.

Of course, during the pandemic we made direct support to people, primarily families with children, our special priority. This primarily included paying out up to 5,000 rubles per child under three years old in April, May and June. In addition, the Government paid out benefits to low-income families with children between three and seven years old in advance, as a lump sum.

Finally, the one-time payment of 10,000 rubles per every child between three and 16 years old was the largest support measure.

These measures supported Russian families in the time of need. At the same time, the economy has yet to fully get back on track, and unemployment is on the rise. The challenges are still there. In this context, I think that we need to pay out an additional 10,000 rubles per every child under 16 years old in July. Russian families with about 28 million children will be able to benefit from this initiative.

I am drawing your attention to the fact that those who have already received the June payment will get the second one in July automatically. There will be no need to re-apply for this benefit or present any certificates. The same goes for families with children under three years old. Those who, for some reason, have not applied for this benefit can do so in a simple and convenient manner, either online or at a branch office of the Pension Fund, and receive the benefit without any delays in July, just as everyone else.

I do understand that families where one or both parents lost their jobs were especially hard hit by the epidemic. They also benefited from our targeted support. We offered them a monthly benefit of 3,000 rubles per each underage child, increased unemployment benefits and expanded the range of the aid. As of early April, 720,000 people received this support from employment offices, and today this figure stands at 2.5 million. This means that we have been able to help almost everyone who became unemployed during this challenging period.

In this regard, I would like to point out that the decisions to support the labour market, to increase unemployment benefits, and to pay child benefits to families with temporarily unemployed parents will remain in force in July and August. Meanwhile, the experience gained and mechanisms created in the process should become the basis for improving employment services and developing a system of social contracts, when the problems of a particular family are addressed based with due account of their specific situation.

I would like to note that the support package for individuals and the economy that we launched this spring has become unprecedented in terms of its scale, the volume of allocated funds and the scope of aid. We were able to do this thanks to the accumulated reserves and steady macroeconomic indicators, as well as our responsible fiscal and monetary policy over the past few years.

We did not see a surge in prices. You may also remember what was happening on the global commodity, energy and financial markets. There were unpredictable fluctuations and, occasionally, panic. Clearly, this could not but impact our national currency. However, first, we prevented a sharp drop of the ruble, and then it actually returned to its pre-crisis level. This was crucial to protecting individual incomes and savings. The predictability and stability of the national currency, the stability of the ruble was not created artificially or on command, but is due to the strong foundations of the Russian economy. Importantly, not all countries managed to achieve similar macroeconomic results. This also applies to the labour market. Unlike many, we managed to avoid a dramatic jump in unemployment. As I already mentioned, unemployment in our country is nonetheless up.

Therefore, now we need to address the main problem and help people get back to work. I want the Government and regional authorities, in conjunction with the Bank of Russia, to take appropriate measures to fully restore the labour market already in 2021, which means that the number of unemployed in Russia should at least return to the pre-crisis level or, better yet, drop even lower.

To reiterate, we have the resources and capabilities to quickly restore the national economy and get it on the growth track. To do so, we will keep long-term macroeconomic policy guidelines unchanged. In professional terms, this is about the budget rule and inflation targeting. In fact, in a language that everyone understands, we are talking about the responsible management of public finance and price stability. These are important and fundamental prerequisites to ensure economic stability and the growth of individual incomes, and to further lower interest rates.

In this context, I would like to note the consistent course of the Central Bank of Russia on easing monetary policy. As you know, literally the other day the key interest rate again went down by one percentage point to 4.5 percent. I would like to emphasise that this is the lowest rate in our entire recent history.

For the economy, these are new opportunities for launching investment and infrastructure projects. It will be easier for entrepreneurs to obtain loans for expanding their businesses. People will receive more affordable loans for new housing.

As you know, last spring we launched a special programme on easy mortgage loans to allow families to buy new housing using loans with an interest rate of 6.5 percent. Over 45,000 families have already applied for this mortgage programme.

Now it is absolutely necessary to expand opportunities for choosing comfortable, modern housing. In this context, I suggest applying easy mortgage loans to new housing worth under six million rubles instead of under three million rubles as before. In the largest agglomerations of Moscow and St Petersburg, this figure must be raised to 12 million rubles. Real estate prices are objectively higher here than the national average. I believe this support measure will be in demand.

I would like to make special mention of one measure of employment support, notably, an easy loan at a 2 percent for the affected industries. These funds will be transferred to the relevant organisations and companies in three equal tranches in June, July and August. Later on, as we said, the debt will be completely written off if they retain their staff.

We see that this measure is in demand. Applications from 90,000 companies employing 2,400,000 people have already been accepted. However, as we see, the demand proved to be much higher than the Government planned initially.

Therefore, I suggest expanding this support measure, this programme, and allocating another 100 billion rubles for it. This way we will provide more support for companies and their employees as the restrictions are lifted and speed up the recovery of the economy and employment.

Yes, some of the mandatory sanitary restrictions introduced in spring are still in place. Friends, this is objectively necessary to protect your health.

But I am now addressing regional governors: it is extremely important to adopt a sensible, balanced and well-calibrated approach to opening the economy. All decisions must be made timely, in line with the recommendations of experts. It is necessary to plan and organise everything in a way that will ensure the security of the people and, at the same time, will not kill business with excessive requirements and will not undermine its operation, and, hence, people's incomes.

We need to go further than gradually relieving businesses of the burden of temporary sanitary restrictions and precautions. It is even more important to rid the economy of bureaucratic and administrative restrictions. Many of them, unfortunately, are chronic and have persisted for years, even decades.

Thus, the expeditious construction of medical centres and hospitals during the epidemic showed us that they can be built much faster and, at the same time, efficiently and reliably, without burdensome formalities that take time, energy and, eventually, money.

I have already instructed the Government to once again analyse the regulatory system in the construction industry, and to make amendments to it based on the experience of recent months. I know that at the first stage, the Government is ready to move almost a third of the current requirements for construction projects to the recommendations category. This work must continue. Apparently, we have such reserves in almost every industry.

I would like to stress that a fundamental improvement in the business climate and the simplification of all procedures should be the most important resource for the recovery and high-quality development of the economy. We need to provide more freedom and opportunities for entrepreneurs, including beginners.

In less than six months, the number of self-employed people in Russia has grown by 150 percent, from 300,000 to 700,000. During the outbreak, they received special support measures, such as a full refund of their 2019 taxes on professional income. In 2020, they can use the so-called tax capital in the amount of one minimum wage, 12,130 rubles.

As you know, the new self-employed tax plan was introduced in several regions as an experiment. We can see now that the experiment was a success. Therefore, from July 1, all regions in Russia will be allowed to introduce a system for the self-employed – everywhere across the country. This means that people can be officially self-employed and just work.

I also think – and I have spoken about this more than once with young entrepreneurs – it would be a good idea to allow people to register as self-employed from the age of 16 rather than 18. According to estimates, about 3 million young people will be able to use this system. Moreover, such novice entrepreneurs will also enjoy additional tax benefits, including tax capital equal to one minimum wage, so as not to draw resources from business development to pay taxes.

It is the young people – energetic, educated, professional, oftentimes yesterday's schoolchildren and university students – who are the backbone of high-tech teams and companies, including those in the field of information technology.

Here is a point that I would like to make. In recent months, given the difficulties that the economy faced due to the epidemic, we have made special additional decisions to support the key industries, such as construction, which I have just mentioned, the auto industry, transport, the light industry and agriculture. In total, several million of our citizens are employed here. With families, we are talking about the well-being of tens of millions of people. We tried to do our best to help them retain their incomes.

On June 10, I met with representatives of the IT and telecom industries. During the epidemic, the quick and effective transition online of a significant portion of business life and the work of essential public and educational services showed the powerful technical and human resources of the Russian IT sector, which is one of the most dynamic, booming industries. I will add to this that in the past five years alone, the export of domestic software has doubled. Of course, we still have work to do. Nevertheless, this is a good indicator.

This industry is home to many basic end-to-end solutions and technologies that are important for the entire economy and social sphere, in general, for all spheres of life in Russia.

Of course, to support and develop such a major industry, there is need not only for effective, but unconventional approaches and solutions. During the meeting, I instructed our colleagues from the Government, in conjunction with the expert professional community, to work through such steps, bearing in mind that the field of information technology has traditionally been highly mobile.

Entrepreneurs and employees prefer to live and conduct business in convenient and comfortable places. Therefore, the tax, financial and legal environment for work in our country should be globally competitive. This requirement applies, in fact, not only to the IT sphere, but to all other sectors of the Russian economy without exception as well.

The plans for supporting the industry I have just mentioned have been prepared and the decisions have been adopted. As a first step, I suggest conducting a so-called tax manoeuvre in the IT sector and thus first of all substantially reduce the burden on the payroll. Let me note that this is the main expense item for high-tech companies.

Let me remind you that we have already reduced the insurance premium rate for all small and medium-sized companies twofold, to 15 percent. I believe in IT we can and must go further. Now the insurance premium rate amounts to 14 percent and is supposed to stay at this level until 2023. I suggest reducing it to 7.6 percent and not temporarily but indefinitely.

In addition, it will be correct to substantially decrease the profit tax rate for IT companies, also indefinitely, of course, from the current 20 percent to 3 percent. This is not only comparable but even better than in such attractive jurisdictions for IT business as India and Ireland. In fact, this will be one of the lowest tax rates in the world.

Taxes are important, of course, but they are not everything. I would like to ask the Government to continue its analysis of all other aspects of work in the IT industry and linked industries. We must be competitive in this respect as well.

Furthermore, I have already spoken about the importance of building up trust between the state and business. Using this firm foundation, we are creating support mechanisms in the current difficult situation and are helping people who believed that it is possible to work in Russia profitably, safely and reliably and do this legally, openly and honestly.

We have many entrepreneurs who are developing their businesses not only inside the country but also abroad. They must have an opportunity to pay their taxes at home, in Russia in a comfortable and civilised manner.

At present Russian tax residents – owners of foreign assets – pay taxes on their incomes from the activities of the so-called controlled foreign companies on the basis of a fairly complicated, clumsy and even inextricable scheme. I suggest simplifying it radically by letting them pay a fixed tax of five million rubles a year without additional reporting. In this way, we will create a stimulus for the development of modern and responsible business, importantly, in the Russian jurisdiction.

I also call the Government's attention to the need to support investment activity in general and create more jobs. Much depends on the regional governments' efforts.

At the same time, the epidemic has put regional finance in a rather difficult position, and we understand this. In addition to the increased healthcare costs, direct support to people and businesses, they have suffered a shortfall of revenue, including because of the federal decisions on tax benefits and deferrals.

In this regard, I instruct the Government to provide additional financial assistance to the regions, to allocate another 100 billion rubles in addition to the 200 billion that we have already announced, and thereby offset the regions' costs arising from the national coronavirus response and relief efforts.

At the same time, I ask you to carefully look at the principles of distributing government support, and not add limitations, but rather encourage the regions that are investing their resources in development projects.

In addition, this year we will add another 100 billion rubles to improve the regional road network. We will channel the funding to the regions that work quickly, building and repairing their roads efficiently and ahead of schedule.

Additional resources are needed to increase investment in transport and grid infrastructure, in programmes to connect regions to the gas supply grids, in upgrading public transport, in addition to government spending. By the way, such mechanisms are already starting to work. On May 7, at a meeting on the transport industry, we decided to support Russian Railways' infrastructure development plans. The final decision was adopted yesterday. The company floated its perpetual bonds to raise funds for the modernisation of railways. Therefore, I instruct the Government, also taking into account this experience, to prepare proposals in the near future on a wider use of financial instruments for the long-term funding of infrastructure development. We will discuss this and other significant issues at a meeting of the Council for Strategic Development in July.

Once again, our benchmarks remain unchanged. But we have to adjust the parameters, terms and priorities of the National Projects, and merge them, integrate into them the nationwide action plan for economic recovery and, of course, provide the necessary financial resources.

Even now, during this new budget cycle, I ask the Government to envisage an increase in the share of effective expenditures on healthcare and education, and I ask the lawmakers to show solidarity with this approach as they work on the next federal budget.

This is what I consider important to emphasise in this context. The voting on the amendments to the Constitution of Russia will take place on July 1. Naturally, they will come into force, as I have said many times, only if our citizens support them. It is the will of the nation that is absolutely essential for creating reliable conditions for confident, dynamic and long-term national development for years and decades ahead. Of course, the new constitutional provisions, if adopted, will set much higher requirements to the efficiency and content of our social and economic policy, and to resolving tasks on improving the quality of life and wellbeing of our people. I would like my colleagues in the Government and heads of government bodies at all levels to consider this in their work.

Citizens of Russia,

The past few months have become a time of major challenges and difficult trials both for this country and the rest of the world. Let me repeat that this was a difficult time for all of us.

However, we made our choice from the very start of the epidemic. We firmly decided that people, their lives, health and wellbeing must be given priority, that the main goal is to save lives and the rest will take care of itself.

Our people revealed their best qualities in the difficult conditions of the epidemic. During this time, we reconsidered many things, learned to show more care for each other and again realised the vital importance of solidarity and trust, which help us pass any trials with good grace.

The epidemic is not yet over. We still have to corner this infection and put an end to it. But life is taking its course and coming back to normal. Yes, everyone is facing many tasks and concerns they will soon have to deal with both at home and at work.

I understand that this will not be an easy period, either. But the opportunity to return to our plans, to their implementation, and the confidence that life is getting back to normal are inspiring a totally different mood that is positive, active and optimistic.

I am confident that together we will undoubtedly resolve any problems that arise; we will certainly catch up with everything and will overcome both temporary and any other difficulties. We have already proved that we are capable of that.

Thank you.



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