MOSCOW, June 23. /TASS/. The Ministry for Development of the Far East and Arctic has been working on new incentives to stimulate people to come to the Arctic for work and to remain there afterwards. The existing preferences will remain, Deputy Minister Alexander Krutikov told TASS.
The current system to support people living and working in the Far North was established in the 1960s, he said. People in the North could earn two or three times more than on similar positions in other regions, and this option was a strong reason to go to the Far North.
"Presently, that system of guarantee and compensation to attract people to work in the North does not work. We do not mean dropping it whatsoever, and it is important to say this. It is a very sensitive social story, which has been working for more than half a century. We are not going to drop it or to review. This is not what we will do. But we must offer a modern system, fitting the market economy, which could offer reasons for people to stay there," the official said.
New benefits will be offered first of all to people working in the Arctic zone, and to their families. Preferences should be in various spheres - from housing to education and personal development, the deputy minister said. The ministry has been working also on benefits for people, living in the Arctic, who are about to retire. The objective is to keep highly skilled professionals in the North, he added.
"Clearly, people in the North retire earlier. Quite often, a person is still full of energy, can work on. But retirement means end of applicable benefits. I believe, it would be correct to offer reasons for such people to stay in the North," the deputy minister said.
However, he continued, quite often people decide to leave for Central Russia because of problems with health, with develop in the complicated Arctic conditions. This aspect could be changed by improved healthcare and working conditions. "Apparently, people of the preretirement and retirement ages should have the right to live in favorable climate conditions. But if they are willing to stay in the North, they should be granted that right, supported by benefits. I can’t see anything bad about it."
When to expect the system
At the same time, the ministry will focus on the social issues only after incentives for investors in the Arctic are in place. This may happen before autumn [2020], he said.
"We will begin with incentives for businesses, as first of all we want to have jobs in the Arctic. This explains the order. We are finalizing this packet of bills. Until it is done, we cannot work similarly effectively in the other part," he explained.
This is also why it is too early to speak about whatever details of the benefits for residents. "I think, we shall be able to eye detailed decisions closer to October-November this year (2020). By that time we will realize what we want to offer," the deputy minister said.
Burden for businesses
According to him, the current system of social guarantees in the Far North is a big burden for businesses. They have to pay out additional wages, and, for example, pay for an employee’s family round trip for holiday every other year. The legislation does not limit directions or distances of the trips.
"Look at Chukotka, it is this country’s edge. When somebody opens a small business there, an employee’s income cannot be less than triple minimum wage. Plus to that are the insurance payments, an additional holiday, a shorter week for women, and other benefits, which altogether double or triple expenses on personnel."
Those expenses cannot be compensated by whatever administrative measures, he said. On the other hand, the state cannot undertake fully this financial burden. A decision to exempt businesses in the North from some payments, like, for example, the insurance payments, could cost the federal budget as many as 200 billion rubles every year ($2.16 billion).
The ministry has been working on measures to support small and medium businesses in the North and to ease their financial burden. For example, before summer ends, in the Arctic zone will begin a special economic regime, where businesses will enjoy certain benefits. For example, insurance payments for new projects will be at 7.6% against 30%. In addition to that, the ministry wants to make easier for small and medium businesses the access to state orders, which would be also a sufficient support for them.
In compliance with the labor legislation, people working in the Far North and similar territories receive from employers bonuses between 10 and 100% of the wages. The bonus rate depends on working experience and on term of living in the North, on the age and on the region. Higher bonuses are payable in districts with complicated climate conditions. The ratio is applicable to wages, pensions and other payments - it may be between 1.2 to 2.
The retirement age is also lower, and the state Pension Fund compensates retirees for the return ticket to go from the North to resorts or other places to spend holidays.