1. Efficiency of expenditures and development budget
The most important element of a true democracy is the return of instruments of control over the expenditures of the budget formed from the tax payments of the citizens and the businesses. Today, these funds are shamelessly privatized by the bureaucrats and the business structures linked to them. Not only does this violate the principles of social justice and fair competition, it also deprives the country of its instruments of development — investments into the infrastructure and the social capital.
The state budget has turned into a personal preserve of the president used for political goals to ensure the bureaucrats' loyalty. Artificially increased security and defense spending results in the chronical underfunding of healthcare. As a result, real budget expenditures do not cover the state obligations on compulsory health insurance. This, in turn, results in disgusting inequity that the citizens constantly face in hospitals and clinics.
As part of my program, I will reduce the military and police budget and double the healthcare spending.— Alexey Navalny
In the countries of Organization for Economic Cooperation and Development (OECD) — association of 35 world's most developed economies — the average healthcare spending is 9% of GDP, and education spending — 5.2%. To reach these level, Russia needs to increase its healthcare spending by at least two times — from 3.5% to 7% of GDP and its education spending — by 1.5 times, from 3.7 to 5.5%, while stimulating private investments into these spheres.
To turn the budget from an instrument of corruption and dishonest enrichment for a small group of people into an instrument of development of national economy, we need to:
- Increase budget transparency by reducing the number of budget items blocked from public control.
- Radically reform the principles and mechanisms of budget expenditures under the «national economy» item by stopping the subsidizing of inefficient state and pseudo-state companies, and economically unreasonable «priority projects»; budget subsidies must become an instrument for restructuring economy and stimulating growth, not enriching the officials.
- Create an independent, open and efficient system of budget audit at federal, regional and municipal level, ensure full transparency of budget expenditures in an on-line mode, so that every citizen is able to find out how much money was spent on constructing a playground in his yard with just a few clicks. Also, create an automated system for controlling state procurement contracts.
- Cut budget expenditures under the items «national security» and «law enforcement activities» and redistribute these funds in favor of the items «healthcare» and «education». Investments in human capital are the key part of a competitive economy in the post-industrial era.
2. Decreasing the burden of regulations, demonopolizing economy and developing competition
Decrease of bureaucratic pressure on the economy, demonopolization, protection and development of competition are the main goals of a democratic government that aims to create conditions for a fair (inclusive) growth, revival and stimulation of entrepreneurial initiative, transfer from oligarchic to social capitalism. For that, a number of specific measures is needed in the following areas:
- Strict and decisive limitation of possibility of use of the law enforcement system for asset redistribution, pressure on competitors, protection racketeering. This will be achieved through both the reforms listed in other parts and special measures: modernization of criminal legislation (especially regarding economic crimes), clarification of competences of various law enforcement organs, increase of independence of courts, upgrade of punishment for knowingly preconceived actions that do significant financial damage, limitation of possibilities for investigative activities interfering with companies» work (confiscation of documents, hard drives, etc.).
- Real decrease of business regulations, limitation of authority of control organs, transition to insurance and economic mechanisms of responsibility for possible damage resulting from business activities, recognition of EU and USA certificates on Russian territory (which abolishes obligatory certification in accordance with Russian standards). One of the mechanisms in this sphere is the gradual transition towards European norms and standards of certification.
We must remove excessive regulations from the entire business, give it freedom, get rid of constant checkups.— Alexey Navalny
- To protect and develop competition, we suggest to create a special organ affiliated to the government (or a joint organ of the government and State Duma — National Commission for Protection of Competition) that will develop legislation for protecting competition, as well as regulations and measures for removing obstacles for competition on branch and local markets. In case this commission questions the necessity of a certain regulation, the corresponding organ must justify its necessity within 45 days. If a justification is not published, the regulation gets abolished.
- One of the tasks of this commission is demonopolization of economy: development of standards for opening access to the infrastructure of monopolist companies, selection of potential competitors of monopolist companies, etc.
3. Tax system reform
Changes in the tax system must be aimed at stimulating fair (inclusive) growth. They must serve the interests of both economic development and fair distribution of incomes from economic growth. Specification of parameters of the tax reform corresponding to these goals will be the task of the new, democratically elected parliament. The following steps are suggested as main parts of this reform:
- Tax and administrative measures will be undertaken in order to decrease offshorization and shadow sector of Russian economy. We need to restore the trust of citizens in the state and prevent dishonest behavior in the tax sphere.
- We need to restore justice in the tax system by balancing the level of tax burden in different sectors. For instance, we need to increase the artificially lowered tax burden in the gas sphere, which currently leads to uncontrolled spending and embezzlement of funds that are practically owned by the state and the citizens.
- Main directions of the tax reform will be: significant decrease of labor taxes, decrease of regressiveness of the tax system, where the less wealthy people pay most of their incomes to the budget; increased and strengthened progressiveness of taxation of real estate and other expensive commodities.
- For companies, the possibility of inclusion of justified expenses in the production cost will be expanded, tax reporting will be simplified.
- The tax system must stimulate the development of small business, Most importantly, tax administration must be significantly simplified. For small businesses, all reporting will be abolished, they will be simply required to pay a small fixed patent fee. Blockings of company accounts for insignificant (under 1000 rubles) debts must stop. An automatic annual tax amnesty must be conducted: all arrears in taxes, penalties and fines under 100 rubles will be written off from both individuals and companies. The recovery of such amounts will cost more than the actual arrears.
If a person becomes a private entrepreneur, the government shouldn't take anything from him, but rather come to him and say «Thank you».— Alexey Navalny
- For small businesses, all on-site tax audits must be abolished, and in-office audits must be limited to comparing tax returns to the tax returns of contractors. For such companies that operate for the first year, only arrears and penalties may be recovered, but no fines.
- The most important part of the tax and budget reform is the redistribution of authority and tax incomes between the three levels of budget and tax system: federal, regional, and municipal, as described in the «federation» part of this program.