Expenses of the new budget of Russia will exceed revenues: they will cut healthcare

Against the backdrop of ongoing geopolitical events, the fact that the State Duma is currently considering a draft federal budget for 2023 and for the planning period of 2024 and 2025 has somehow completely fallen out of the focus of public attention. Meanwhile, the corresponding budget law is the main financial document of the country. What is ultimately budgeted has a direct impact on our citizens and their well-being.

Therefore, it is worth taking a closer look at some figures characterizing the draft budget as a whole, and especially those that are, as they say, “closer to the body” and are planned for specific items of expenditure for the next year.

So, federal budget expenditures for 2023 are planned at the level of 29 trillion rubles, revenues – 26.1 trillion rubles. That is, expenditures significantly exceed revenues by 2.9 trillion rubles, which is about 2% of GDP. This is a lot for our country. Russia is not accustomed to living with such a shortfall in income to cover expenses.

A reasonable question arises: where will we get the money? The authors of the project argue that government borrowing should become the main source of budget coverage. The state hopes to issue securities for this purpose – OFZ (federal loan bonds), which will be bought. This is where the budget comes in. Are you sure it will show up? The fact is that in the conditions of the highest uncertainty of the economic situation, investors do not really want to buy government securities. After all, they also see what is happening in the economy, and therefore they are concerned whether the state will be able to pay them off by paying off OFZ.

It is possible and even necessary to pay attention to the fact that, according to the budget projections, inflation in 2023 should be 5.5%, that is, it is planned to decrease by more than two times compared to that expected by the government in 2022 (12.4% ). In 2024–2025, inflation should generally reach, according to the government forecast, the target level of 4% annually. Expectations, of course, are quite optimistic, especially if we recall that this year inflation, again according to the approved official forecast, with which the country entered this year, should have already reached 4%. Of course, one can object to this: after all, no one expected such a geopolitical upheaval to happen … But “expected – did not expect” is another question. The fact is obvious: we planned inflation in 2022 at 4%, we will get more than 3 times more.

Next, I turn to the specifics – to how the costs of the draft federal budget for certain items should increase in 2023. It is important here to compare what is planned for next year with what was in the previous three-year budget, which was adopted a year ago and which also approved expenditures not only for the current 2022, but also for 2023 and 2024. Let’s take, for example, expenses under the item “Health care”. Compared to the original version, expenditures on it in 2023 remain practically at the same level in the draft federal budget being considered today – about 310 billion rubles. But do not rush to rejoice at such stability, since inflation will not go anywhere and in real terms, health care spending will decrease in a year by at least the planned inflation of 5.5%.

By the way, compared to what is expected with the expenditures under this item in 2022 – 372.2 billion rubles – the allocations for health care should decrease very significantly in 2023 (by 16.7%).

No less interesting is the adjustment of expenditures within the item “Healthcare”. Not so significantly, but in 2023, expenses under the “Fight against oncological diseases” section should be reduced – from 154.8 billion rubles to 153.7 billion rubles. For comparison: in 2022, the corresponding expenses are expected in the amount of 189.6 billion rubles. The reduction in planned expenses, as stated in the corresponding explanatory note, is due to a decrease in budget allocations for the re-equipment of medical organizations providing medical care to patients with cancer – by 510.6 million rubles, as well as a decrease in spending on new construction and reconstruction – by 544.1 million rubles.

Compared to the originally approved plans in 2023, expenditures under the item “Development of children’s healthcare, including the creation of a modern infrastructure for providing medical care to children” will also decrease from 19.2 billion rubles to 17.3 billion rubles.

But, again, in comparison with the original plans, the costs of “Creating a single digital contour in healthcare based on a unified state information system in the field of healthcare (EGISZ)” should increase by 2.5 billion rubles (from 9 billion rubles to 11.5 billion rubles). I understand that digitalization is a necessity of today, but it is difficult for me to understand the logic when the costs for it are growing, while the costs of oncology and children’s healthcare are declining.

By the way, if you look at the aggregated items of expenditure, then the figures for the planned allocations from the federal budget for environmental protection in 2023 look simply a failure: minus 24% compared to the originally approved plans. What, all environmental problems have already been solved in our country?

I am convinced that even in the current conditions of the most acute geopolitical conflict, spending on oncology, children’s health care, and environmental protection should not decrease. They must not go down under any circumstances!

Informally, we have so-called “protected” expenditure items (in the early 90s of the last century, such a list existed formally), but for some reason the very socially sensitive expenditures mentioned above are not included in them.

Tell me, what then to reduce? In a good way, of course, nothing needs to be reduced. Although difficult. If it doesn’t work out, then why not pay attention to such enlarged items of expenditure as, for example, “National Issues” or “National Economy”?

Once again, if it is possible to avoid cutting costs, it is good, but if this is not possible, it should be done more reasonably.

Why do seemingly obvious priorities in the distribution of the budget cease to be so? I think the answer is simpler than it looks. Everything is as always: whoever has more lobbying potential in getting funds is on the horseback. Well, what, tell me, is the lobbying potential of those who are responsible for the growth of environmental spending? Yes, of course, there are ecologists, there is even a whole Ministry of Nature, there are corresponding international obligations… Now compare their possibilities with those who support an increase in “General State Expenditures” or expenditures under the “National Economy” section. For these articles, solid high-ranking officials and influential lobbyists are “drowned”. Here there can be no question of any comparison – and so everything is clear.

And then what to do? After all, this reality will always exist. Well, the officials will not cut the “bough on which they sit” – the same “National State Expenses”. That’s why there should be a system of national priorities. Someone will say: what about national projects? But if these are really state priorities, then they should be singled out precisely as “protected” – not subject to cuts and reductions – expenditure items.

Today, these problems are becoming more and more urgent, because when money becomes scarcer (and this is exactly what happens during an economic crisis!), then stronger lobbyists win in the fight for them. They also understand that there is less money, so they act actively, proactively. This is normal and natural in any bureaucratic system. It is not normal that socially sensitive expenses, those that under no circumstances should be reduced, are the losers. Somehow they turn out defenseless!