Russian president holds annual state-of-the-nation address; government resigns unexpectedly thereafter

On Wednesday (Jan. 15), president Vladimir Putin delivered his annual state-of-the-nation address to a joint session of the Russian parliament. Putin first focused on Russia’s poor demographic trends, and proposed increases to various family benefits to increase the birth rate and reduce poverty. The Russian president also proposed pay increases for teachers and reminded parliamentarians about fulfilment of the public sector wage hikes mandated in May 2012.

Putin reiterated his goal of raising the investment rate from 21 % of GDP at present to 25 % by 2024. Proposed measures to increase fixed investment include tax breaks and harmonisation of the regulatory framework. An economy ministry estimate finds that the costs of proposed measures to extend maternity benefits, provide child support to low-income families and tax incentives to spur fixed investment would add 300 billion rubles (4.4 billion euros) to the federal budget this year and rise later to over 600 billion rubles a year.

Putin ended his speech by proposing constitutional amendments that would, among other things, expand the role of the Duma and make official the status of the State Council, the highest advisory body to the president. The State Council was established in 2000. Immediately following the address, prime minister Dmitri Medvedev announced the resignation of his entire government. Putin proposed as new prime minister Mikhail Mishustin, head of the Federal Tax Service. The Duma approved Mishustin’s nomination on Thursday (Jan. 16). The key tasks of the new government will be implementation of national projects and realisation of the numerous measures presented in Putin’s speech.