Abolition of social benefits: government forced to heed nation's reaction

Russia's State Duma, the lower house of parliament, has adopted a bill in its first reading on replacing social benefits in-kind with monetary compensations. Interestingly, 66% of MPs supported the bill, which, according to sociological surveys, is the same percentage of the population that opposes it.

The federal budget will replace benefits for 14 million disabled individuals, war veterans, workers who dealt with the aftermath of the Chernobyl nuclear disaster, Leningrad siege survivors and other groups of population, with monetary compensations ranging from $17 to $117 a month. Close on $6 billion will be allocated from the budget for the purpose next year. A billion dollars will go on covering the military's transport fares, about the same amount will be used to pay part of the housing and utilities fees for those entitled to benefits, and about $4 billion will be spent on social security for the disabled.

When the figures were disclosed, it was clear that they would not make up for the numerous benefits received by residents of small and large cities. In addition, housing and utilities fee benefits granted to those who worked for a long time in the Arctic and some areas in Siberia, children's allowances, medical and some other benefits were abolished, as were compensation payments for them. Only a third of the country's ten million disabled will be fully compensated for the benefits under the new bill, according to the Russian Society of the Disabled.

Both critics and proponents of the bill can only agree on one point: it will mean sweeping changes for Russia. The bill can only be compared to the privatisation campaign in the early 1990s in terms of its significance. Indeed, the public's negative reaction to the draft law forced the president to demand that the government make significant amendments to its concept.

The Duma budget committee is already drafting 15 amendments to the bill for the second reading that will take place in a month. The Duma's social committee has prepared even more amendments and proposals.

Surveys indicate that the majority of rural areas support the idea, as pensioners in remote Siberian villages, for example, do not care much about telephone or municipal transport benefits. There are no trams there and even telephones are a rarity. Village residents are therefore interested in, although minor, regular additional cash payments.

However, things are more complicated in the cities. When asked in a recent survey, 38% of the respondents said they were entitled to free municipal transport, 35% enjoyed housing fee benefits, 21% did not have to pay their phone bills in full and 19% had medicine and healthcare benefits. Will the government-proposed compensation payments really make up for these benefits for retired city residents?

Vice-Premier Alexander Zhukov and Finance Minister Alexei Kudrin said they were prepared to compromise while amending the draft law and claimed there was enough money in the coffers for the compensation payments. Naturally, these statements have gone some way to alleviating tensions.