March 25, 2020
16:30
Address
to the Nation.
President of Russia Vladimir Putin: Citizens of Russia, friends,
I am reaching out
to you on an issue that has become a matter of concern
for all of us.
We are witnessing
an acute escalation of the coronavirus epidemic
on a global scale. The number of new cases continues
to grow in many countries. The global economy
as a whole is at risk, and is already expected
to shrink.
By taking precautionary
measures, we have been largely able to prevent the infection from
rapidly spreading and limit the incidence rate. However, we have
to understand that Russia cannot insulate itself from this threat, simply
considering its geography. There are countries along our borders that have
already been seriously affected by the epidemic, which means that
in all objectivity it is impossible to stop it from spilling over
into Russia.
That said, being
professional, well organised and proactive is what we can do and are
already doing. The lives and health of our citizens is our top
priority.
We have mobilised all
the capabilities and resources for deploying a system
of timely prevention and treatment. I would like
to specially address doctors, paramedics, nurses, staff at hospitals,
outpatient clinics, rural paramedic centres, ambulance services,
and researchers: you are at the forefront of dealing with
this situation. My heartfelt gratitude to you for your dedicated
efforts.
I would like
to ask Russian citizens to listen very carefully
to the advice coming from doctors and the authorities. This
could make a very big difference at this point in time. This is
especially true for the most vulnerable categories of citizens:
the elderly and people who have chronic illnesses. Minimising the risks
should be a priority for them and all people in general.
There is also
the question of the national vote on the amendments
to the Constitution, which has been tentatively scheduled
for April 22. You know that this is a very serious matter
to me. Of course, I will ask you to go
to the polling stations to express your opinion on this
issue of fundamental and crucial importance to the country
and society.
However, as I said
before, our absolute priority is the health, life and safety
of the people. This is why I believe the vote should be
postponed.
We will look
at the situation in the regions and throughout
the country, and we will rely on the professional opinion
and recommendations of doctors and specialists when setting
a new date for this vote.
Next, the immediate
priority is to prevent the quick spread of this diseases.
Therefore, I declare
next week to be an official non-work period while maintaining wages.
In other words, the days off will last from Saturday March 28
to Sunday April 5.
Of course, all public
infrastructure facilities, including medical facilities, pharmacies, stores,
institutions responsible for banking and financial settlements,
as well as transport, and ministries and agencies
at all levels, will continue working.
As I said, the extended
days off are being declared to reduce the speed
of the virus spreading.
I am addressing all our
citizens. Let us not rely on chance as we tend to do
in Russia. Do not think, as we usually do, that this cannot happen
to you. It can happen to anyone. And then we will very quickly
see what is now happening in many western countries, in Europe
and across the ocean, happen here in Russia. We must strictly
comply with all the recommendations. We must protect ourselves, our
families and friends, and we must adopt a more disciplined
and responsible approach. Trust me: the best thing to do now is
stay home.
I will now specifically
focus on the current socioeconomic situation. Here, we also need
to take additional steps, primarily to ensure the social protection
of our people, their incomes and jobs, as well as support
for small and medium-sized businesses, which employ millions
of people.
In this regard,
the following priority measures will be implemented.
First, all social protection
benefits that our citizens are entitled to, should be renewed automatically
over the next six months, with no additional certificates or visits
to the authorities needed. For example, if a family is
entitled to subsidised housing and utility payments, they will not
need to regularly confirm their per capita income to continue
receiving this state support.
Please note that all
payments to war veterans and home-front workers timed
to the 75th anniversary of the Great
Victory, 75,000 and 50,000 rubles, respectively, should be made before
the May holidays, earlier than usual, in April.
Second, it is essential
to support families with children. In the next three months,
starting in April, I propose paying all families that are eligible
to maternity capital, an additional 5,000 rubles a month
for each child up to three years of age.
This support is especially
important for families with children who are not attending day-care
nurseries or kindergartens, and for parents who are on sick
leave or on maternity leave.
Regarding our new support
package, I mean benefits for children aged 3 to 7, I now
instruct the Government to expedite all organisational arrangements
so that eligible families can start receiving these payments not in July,
as planned, but a month earlier, in June. I also ask
the governors to expedite the transfer
of the necessary information from the regional civil registry
offices to the tax service. Colleagues, it is fundamentally important
to start making these payments. Pay attention to this.
Third, we need
to support those on sick leave and people who have lost their
jobs. Today, all sick leave payments are calculated based on employees’
period of work and salary. As a result, employees,
primarily young people, can receive very low sick leave payments. This is,
of course, not fair. I suggest the following provision: Sick
leave payments should be calculated based on the amount
of at least one minimum wage a month. This provision will be in force
until the end of the year, and from there we will decide
how to proceed depending on the situation.
Just like other countries’
economies, the Russian economy is experiencing substantial headwinds due
to the effects of the epidemic. And, as I have already
said, we need to support those who may lose their jobs.
Today, with
the exception of some categories of individuals, maximum monthly
unemployment benefit is 8,000 rubles. I suggest increasing it
to the minimum wage amount or 12,130 rubles per month.
Fourth, loans taken out
by individuals present another risk. Naturally, it is difficult if not
downright impossible to completely repay debts when incomes are plunging.
I suggest declaring
consumer loan and mortgage holidays. If a person faces
a difficult situation, meaning their monthly income declined
significantly, by over 30 percent, then they should have the right
to temporarily stop debt servicing and reschedule it. It goes without
saying that any penalties are out of the question.
I am asking the Bank
of Russia to set up a similar loan rescheduling mechanism
for self-employed people, too.
If people are unable
to repay their debt for objective reasons, they should not be left
without options and they should not fall hostage to creditors’
claims. We need a bankruptcy process that is fair and not burdensome.
I am asking the Government and the parliament
to expedite approval of the necessary regulatory changes.
Fifth. Small
and medium-sized businesses and micro businesses, especially
in the services sector, are now facing objective difficulties due
to declining orders and revenue.
These businesses need help
to stay open, which means retaining their employees. I would like
to address all employers right now: once again, our most crucial task is
to ensure stability in the labour market
and to prevent a surge in unemployment.
Government assistance will
be provided to businesses to deal with this problem.
I propose
the following measures to support the enterprises
and industries most affected by the current difficult situation.
I believe it is
necessary to defer all taxes on small and medium-sized
businesses, except for VAT, for the next six months.
In addition, micro businesses should also be granted a deferral
on their contributions to social insurance funds.
Bank loans held
by struggling SMEs and micro businesses must also be deferred
for the next six months.
Generally speaking,
I am asking the Government and the Central Bank
to propose and take additional action to ensure stable lending
to the real economy, including through state guarantees
and subsidies.
Next. Companies experiencing
hardship must be protected from bankruptcy. In this connection, I am
proposing a six-month moratorium on bankruptcy claims
by creditors against companies and on the recovery
of debts and penalties.
Once again, these measures
will apply to companies operating in the sectors most affected
by the current difficult situation. At the same time,
I am instructing the Government to constantly monitor developments
and, if necessary, expand and review the list
of the industries requiring support.
Sixth. Right now, we must do
everything we can to support the incomes of our citizens –
especially those employed by small and medium-sized businesses.
In order for these
businesses to get additional resources to support their employees,
I am proposing to cut their insurance contributions in half,
from 30 to 15 percent. This reduced rate will apply to any salary
above minimum wage. For those making minimum wage or less
for some reason, the rate will remain 30 percent.
I would like
to stress that the reduced rate is being introduced not just
for several months, not only as an anti-crisis measure, but
for the long run. This way we are creating a long-term incentive
for employers to increase wages.
Finally, there are two more
measures I would like to suggest. Allow me to elaborate.
First, all interest
and dividend income that flows from Russia and is transferred abroad
into offshore jurisdictions must be taxed properly.
Today, two thirds
of these funds, and basically we are talking here about incomes
of specific individuals, are taxed at the rate of only 2
percent, thanks to so-called optimization strategies of all kinds.
At the same time, people with modest salaries pay an income tax
of 13 percent. This is unfair, to say the least.
For this reason,
I suggest that those expatriating their income as dividends
to foreign accounts should pay a 15 percent tax on these
dividends. Of course, we will need to amend Russia’s double taxation
treaties with some countries. I ask the Government to work this
out. If our foreign partners do not accept our proposal, Russia will
unilaterally withdraw from these treaties. We will begin with countries that
attract substantial resources from Russia, which is a very sensitive issue
for our country.
Second, many countries levy
income tax on interest earned by individuals from their bank deposits
and investments in securities, while Russia does not tax this income
at all.
I propose that people
with over 1 million rubles in bank deposits and debt securities pay
a 13 percent tax on this income. I would like to reiterate
that this is not about taxing the deposits themselves but only applying
income tax to the interest individuals earn from these investments.
I would like
to emphasise that only about one percent of deposit holders will be
affected by this initiative. At the same time, Russian banks
will still offer attractive deposits with some of the highest returns
in the world.
The solutions I am
proposing are far from simple. Still, I would like to ask you
to treat them with understanding. Let me add that I propose using
the budget revenue from these two measures to fund initiatives
to support families with children and help people who are unemployed
or on sick leave.
People of Russia,
All the measures that
are about to be adopted or will be taken in the future will
work and will produce results only if we are in it together
and recognise the complexity of the current situation. We
need the state, society and the people to work together,
and we all have to do everything each and every one of us
can do.
We have to be mindful
that we bear personal responsibility for our close ones, for those
who live near us, and who need our help and support.
By and large, it is this sense of solidarity that underpins
the resilience of our society, as well
as an unwavering commitment to mutual assistance
and the effectiveness of the response we come up with
to overcome the challenge we are facing.
Thank you for your
attention.
