Who did not have time, that is not an advance – Newspaper Kommersant No. 39 (7484) dated 03/09/2023

The White House began work on balancing the distribution of risks between business and the state, limiting the flow of state funds into the economy. After investments supported budget injections in 2022, private funds and bank loans should become the main sources of capital investments in 2023, according to the Ministry of Economy. At the same time, the government will reduce the distribution of free “budget loans” to businesses by revising the terms of advance payments for government contracts for 2023 – now suppliers with treasury support will be able to receive upfront up to a maximum of 50% of the contract value, and not 90%, as in 2022.

The government has extended special conditions for advance payment of government contracts to 2023: suppliers will be able to receive up to 50% of the contract amount from customers, subject to its treasury support. For contracts that are not subject to treasury control, the maximum amount of the advance will be limited to 30% of its value, the Ministry of Finance explained to Kommersant. “Increasing the amount of advances will give organizations access to additional resources, help them solve their tasks faster and more efficiently while ensuring unconditional control over the spending of budget funds,” the government notes, but in reality the White House is beginning to curtail the distribution of advances.

Since 2020, the government has been using flexible management of the possibilities for advance payments for government contracts – the tool allows you to increase the speed of receipt of budget funds into the economy and support business in a crisis. In 2022, the maximum advance payment for government contracts was 90% subject to treasury support, with advance payments up to 50% such control was not required. Prior to this, according to the decree on measures to ensure the execution of the federal budget, the norm assumed the same 90% with treasury support and 30% without it. In 2023, however, the increased advance payment to 90% will remain only for government contracts with support that relate to capital construction projects in the DPR, LPR, Zaporozhye and Kherson regions, follows from Decree No. 348 of March 6.

Such a reduction in advances should reduce the speed of budget funds flowing into the economy – almost full coverage of the contract made it possible to support suppliers thanks to de facto free loans from the budget and was introduced after the start of the Russian military operation in Ukraine to reduce the risks of suppliers in the face of unclear economic consequences.

In the spring of 2022, we recall, analysts allowed for a decline in Russia’s GDP to 8%, exchange rate instability, supply disruptions and, in general, much more gloomy macroeconomic consequences of the conflict, and the White House, in the presence of significant state reserves, took emergency measures in order to share these risks with companies. However (largely due to these measures), the decline in GDP at the end of the year amounted to only 2.1%, and the normalization of the situation in the economy allowed the Ministry of Finance to begin to refuse to flood it with budget money.

In 2023, the flow of funds will be more even, which will reduce inflationary pressures. It seems rational to reduce free lending to companies through government orders and in the context of discussing the withdrawal of superprofits from them in 2022 through an additional tax (see Kommersant of February 22). In addition, the reserved balances of funds for the execution of contracts will remain in the accounts of the Treasury, which will increase budget revenues from liquidity management. In 2022, the volume of income from managing the balances of the Federal Treasury amounted to 541 billion rubles, of which the regions received 167 billion rubles. additional income. However, in 2023, the Federal Treasury must provide the regions with another 250 billion rubles. through special treasury loans (see Kommersant of February 8), which makes the task of increasing revenues from the allocation of temporarily free budget funds relevant.

In turn, speaking at the State Duma on Tuesday, Economics Minister Maxim Reshetnikov also noted that against the background of external pressure in 2022, the budget provided significant support to investments, but in 2023 the situation will change. “We understand that there is more capital in the economy, not less. And now we need to rely on private initiative and leverage. In 2023, the main source should be the own funds of enterprises and bank lending. It is important to ensure an intersectoral flow of funds both through the banking system and through the stock market,” the official added. Excessive participation of the budget in the economy, meanwhile, increases the cost of bank lending, further shifting the balance of investment financing in favor of the state. In particular, the Central Bank previously warned that a larger contribution from the budget channel means less space for creating a money supply through a credit channel.

However, the question of whether the White House will be able to launch a boom in private investment as early as 2023 is still open – for example, the investment tax deduction reform that ensures it (see Kommersant on March 1) will de facto drag on until 2024-2025 years. However, the level of capital investments in the economy will be insured by the investments of the National Wealth Fund (1.1 trillion rubles, as in 2022, according to the MMI Telegram channel), it can also be significantly supported by the discussion of the withdrawal of investments from the tax base when excess profits are withdrawn to the budget: if assume that the “voluntary” tax rate will be comparable to the income tax rate, and the required amount will be kept within 300 billion rubles. (the latest assessment of the appetites of the Ministry of Finance), in the limit, this can increase the capital investments of companies in 2023 to 1.5 trillion rubles, or 1% of GDP.

Diana Galieva, Oleg Sapozhkov