The Milli Majlis had another plenary sitting on 25 December.

Opening the sitting, the Parliament’s Chair Sahiba Gafarova mentioned the deliberations on the first agenda item, namely, the Bill ‘On the 2021 State Budget of the Azerbaijan Republic’, started at the sitting yesterday, adding that the deliberations would be continued today. The Bills in the Budgetary Package would be discussed individually and would then be put on vote one by one.

The committee chairmen Siyavush Novruzov, Hijran Huseynova and Sadig Gurbanov as well as the MPs Sabir Rustamkhanli, Jala Aliyeva, Razi Nurullayev, Ilham Mammadov, Tahir Karimli, Soltan Mammadov, Elnur Allahverdiyev, Malik Hasanov, Malahat Ibrahimghizi, Sevinj Huseynova, Gudrat Hasanguliyev, Kamila Aliyeva, Sattar Mehbaliyev, Azay Guliyev, Rauf Aliyev, Aydin Huseynov, Rashad Mahmudov and Etibar Aliyev spoke on the agenda item. They praised the 2021 State Budget Bill, pointed at the mastery with which it was drafted and underscored its remaining social orientation. It spells the state care of the situation of every citizen of Azerbaijan, they said. At the same time, due attention is paid to defence matters, military development, improvement of the living conditions of the National Army’s privates and officers and restoring the infrastructure in the de-occupied provinces. The Bill reflects the economic achievements as well as perspective opportunities of the country. The MPs christened the 2021 State Budget the Victory Budget.

Then, Mrs Gafarova announced the Bill ‘On the 2021 Budget of the State Social Protection Fund’ as the first item on the agenda.

Speaking on the item, Chairman of the parliamentary Committee for Labour and Social Policy Musa Guliyev talked of the improvement of the Azerbaijani citizens’ welfare and especially the social protection of the indigent people as political priorities with President Ilham Aliyev. The draft budget of the SSPF tabled for the first reading is guided by exactly that; it meets the requirements of the Budgetary System Law and of the other regulatory legal acts. The Chamber of Accounts of the Azerbaijan Republic has analysed it thoroughly and has passed a favourable opinion statement about it.

The revenues and expenditures of the Fund are projected to reach AZN 5,146,030,160,0 in 2021 with an increase by AZN 361,134 mn or 7.55% from the current year. The compulsory state social insurance fees and the annual transfer from the State Budget should account for 68.4% and 31.6% of that total respectively. Further, 61.59% of the compulsory state social insurance collections or AZN 2 bn 157 mn is to be collected by the off-Budget sector whilst the organisations financed from the State Budget are to pay in AZN 1 bn 345.43 mn for the insurance facility in question. The latter will be somewhat less and the planned inbound State Budget transfer will be relatively higher than this year: such forecasts have to do with the possible adverse effects that the coronavirus pandemic might have on economic activities. Hence the approach adhering to a cautious budgeting policy.

Pensions and benefits to be distributed out of the compulsory state social insurance fees would constitute the biggest spending items of the Fund in 2021. The benefits would be the temporary disability, pregnancy and birth-giving, advent of a new-born, child care (until the child is three years of age and funeral cost coverage benefits as well as the allowances that cover health-resort treatment and health-improvement activities for the people insured under the auspices of the Confederation of the Trade Unions of Azerbaijan. Next, there will be funds to pay for the banking fees linked with pensions and benefits and, last but not least, to cover the expenses that the State Social Protection Fund’s Head Office and the local branches including the ‘DOST’ Agency will incur while arranging social services to the population next year.

The planned payments to the population will account for 97.26% of the total expenditures of the Fund forecast for next year. Of that amount, the distribution of pensions will add up to AZN 880 mn 40 thousand while the benefits to go out at the expense of the compulsory state social insurance collections are due to reach AZN 124.74 mn. Besides, it is intended to set AZN 338 mn aside to raise the insurance component of the retirement pension in 2021. Incidentally, the average monthly retirement pension has been on the increase for some while thanks to the successful social policy under way: the pension equalled AZN 263.59 in 2019, AZN 297.85 in H120 and AZN 301.1 in H220, and is forecast to rise to AZN 338.89 in 2021.

It was mentioned also that the Bill introduced by the President had been drawn up in compliance with the legislative requirements, was adequate to the overall goals laid out in the social and budgetary policies and answered to the principles of the budgetary system of the Azerbaijan Republic. It would provide a solid foundation for improvement of the social welfare of the citizens of the country next year.

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As the plenary sitting of the Milli Majlis continued, Chairman of the Chamber of Accounts Vugar Gulmammadov presented the Chamber’s opinion statement about the 2021 SSPF 2021 Budget Bill. According to Mr Gulmammadov, the Bill is composed in compliance with the Budgetary System Law while its revenue and expenditure pattern conforms to the targets stipulated in the Social Insurance Law. The amount of the transfer due from the State Budget is in compliance with the existing parameters of next year’s State Budget. The study of the SSPF 2021 Budget’s parameters indicates that the performance terms set for the activities planned for 2021 allow for a logical continuation next year of the work done on the pension concept and due for completion in 2020. This is viewed as a positive move.

The annual revenues of the Fund are planned to exceed the 2020 counterpart by 7.6% and become the largest yearly total in the history of this office. It is intended to use most of the expenditures of the Fund on payments to the population next year. The upwardly trend observable in the pension distribution expenses over a few years past is bearing on the net weight of the gross domestic product. The pension growth dynamics are estimated at 14.2% and 9.3% for this year and next year respectively.

The SSPF spending areas also include the benefits, which are planned to constitute 2.4% of the aggregate expenditure during 2021. As regards the allowances to cover the compulsory state social insurance, there is to be a 23% rise in the relevant allocation next year.

In the end, Mr Gulmammadov pointed at the expediency of the specificity with which the state obligations are defined in the document.

The attending Minister for Labour and Social Protection of the Population Sahil Babayev said that the stronger social protection of the population, providing each citizen of the country with proper living standards and providing the finance required to maintain the national security are the main goals of the policy that the Head of State was pursuing.  The purposeful and targeted social protection and social development measures are being carried into life in line with the programme of reforms of the president of Azerbaijan Ilham Aliyev. The SSPF revenues are to amount to AZN 5 billion 146 million next year - so, there will be an excess by AZN 361 mn or 8% from the revenues of this year. The compulsory state social insurance fees should add up to 68.4% of the aggregate revenues of the SSPF. The entities funded from the State Budget are to fulfil the corresponding forecast made for AZN 1 bn 345 mn whilst AZN 2 bn 157 mn befalls the economic organisations not funded by the State.

The balance expenditure of the Fund is set at AZN 5 bn 146 mn; 97% of that (AZN 5 bn) are the planned payments to the population. The pension and social insurance allowances should add up to AZN 4.9 bn and AZN 123 mn respectively. The retirement pension finance projected for next year will manifest a rise by AZN 337 mn or 7% compared with 2020. The average monthly pension that will be paid during 2021 is AZN 338 including the old-age pension at AZN 370. This is going to be 13% higher than in 2020.

The Fund was transformed as a public legal entity pursuant to the relevant presidential decree. This structural reform was undertaken in order to move from an administrative governance model to a public service one as well as with a view to improving the quality of the public services and having the workings of the Fund be guided by the citizen satisfaction principle. This new model has been in practice at the ‘DOST’ Centres for longer than a year and has proven its expediency already.

Capping his speech, Mr Babayev commented on the matters that the MPs had brought up.

The committee chairmen Siyavush Novruzov and Ganira Pashayeva, and the MPs Azer Badamov, Musa Gasimli, Ali Masimli, Malahat Ibrahimghizi and Razi Nurullayev stated their views of the operations of the Fund.

After that, Chairman of the parliamentary Committee for Labour and Social Protection of the Population Musa Guliyev informed the assembled of the first reading of the draft 2021 Budget of the Unemployment Insurance Fund. He told them that the 2021 revenues and expenditures of the Fund had been projected to reach AZN 157,769,146 put together whilst the revenues and the expenditures set apart would represent the corresponding increases by 4.3% and 10.4% from the 2020 levels. It follows from the Bill that end-of-year balance money in the accounts of the UIF as well as in the accounts of the administration of the entity (body) assigned by the appropriate executive authority would be used to finance the expenses planned for next year. 

Minister for Labour and Social Protection Sahil Babayev remarked that the work of the UIF would be concentrated on implementing the current and next-in-row reforms in the employment maintenance field. The self-employment programme is to embrace more than 16,000 households.

The MPs Razi Nurullayev, Fazayil Agamali and Aydin Huseynov commented on the current item.

Next came the Bill ‘On the Living Wage in the Azerbaijan Republic in 2021’. It was tabled for the first reading and explained by Chairman of the parliamentary Committee for Economic Policy, Industries and Enterprising Tahir Mirkishili who said that it was planned to raise the living wage for certain communities - the country standard would rise from AZN 190 to AZN 196 whilst the employable population’s, the pensioners’ and the children’s living wage would go from AZN 201 to AZN 207, from AZN 157 to AZN 162 and from AZN 170 to AZN 175 respectively.

Chairman of the Committee for Economic Policy, Industries and Enterprising Ali Masimli expressed his thoughts about that.

Then, Chairman of the Committee for Labour and Social Protection Musa Guliyev spoke of the Bill ‘On the Limit Need Tested in the Azerbaijan Republic in 2021’ tabled for the first reading. Mr Guliyev recalled that the limit need tested was set as the annual state budgets were adopted for the purposes of defining the addressed social aid. This annual limit must grow closer to the living wage in keeping with the law; it will no longer be used thereafter. The limit defined for 2021 will be AZN 10 or 6.2% higher than that of 2020 - it will equal AZN 170.

Next, Chairman of the parliamentary Committee for Economic Policy, Industries and Enterprising Tahir Mirkishili informed the MPs of the first-reading draft amendments to the Budgetary System Law of the Azerbaijan Republic. The amendments would replace the wording ‘the budget of the office (entity) determined by the appropriate executive authority that implements the social provisions and protection’ with the wording ‘the budget of the state social protection fund’. The State Social Protection Fund is a state-owned financial fund that has a budget of its own independent of the State Budget and is governed by the office (entity) assigned to do so by the appropriate state authority. The status of the SSPF was changed from ‘an executive authority’ to ‘a public legal entity’ pursuant to the presidential decree No 912 dated 30 December 2019 ‘On Additional Measures to Improve the Governance in Social Protection’; now, the amendments in question serve exactly that purpose.

Mr Mirkishili also shed lights on some issues brought up by MP Tahir Karimli.

After that, Chairman of the Labour and Social Policy Committee Musa Guliyev presented for the first reading the three interlinked issues. Namely, first, it is proposed to replace the wording  ‘the budget of the office (entity) determined by the appropriate executive authority’ with the wording ‘the budget of the state social protection fund’ in the Social Insurance Law. Second, the draft amendment to the Law ‘On Retirement Pensions’ is about deleting Article 19 of the law together with cancelling the pension supplements stipulated therein: those supplements would be amalgamated with the current allowances of the President of the Azerbaijan Republic. Most of the people to which the said article applies (the People’s Heroes of Azerbaijan, members of the shahid families, war invalids, the Great Patriotic War veterans, the people in the 1st handicap category and so forth) are in receipt of the presidential allowance as it is. That is to say, the cancellation of those pension supplements complete with the adequate increase in the presidential allowance will bear well on the social welfare of those persons who are paid both their pensions and the presidential allowance. At the same time, such a move would speed up the appointment of those benefits made digitally. As regards those who are not given the presidential allowance, new benefits are in the plan for them. Lastly, those covered by the law article being deleted will, if made equal in terms of rights with the presidential allowance recipients, be also given the monthly social benefits and retirement pensions alike.

It follows from the next draft amendments that the insurance longevity ratio will be determined as a ratio between the number of months mandatory for a retirement pension to 200 as against 192 in the current edition. This will further soften the pension capital requirements that factor in when handicap pensions are assigned to the people in the 2nd and 3rd handicap categories and will also push the pensions up.

Based on another draft amendment to the law, the effectiveness of the 25-year employment history amnesty is to be extended to 1 January 2023 for the people having capitals in their personal retail accounts as the e-pension system is instituted. The said period will be shortened by one year annually after the above date.

While Article 39.2 of the Law indicates the maximum (20%) amount deductible from retirement pensions, the minimum amount is not, which even leads to the minimum deductions being made on the force of court orders in some cases. So, the proposed minimum deduction is 10% so as to keep the SSPF budget financially stable and to ensure that all amounts made available to citizens by error are recovered for the budget as soon as practicable.

Musa Guliyev said while submitting the draft amendments to the Law ‘On the Social Benefits’ that the draft’s purpose was to optimise the social benefit sums and to unify their types in the format of the reforms going on over the recent years. Children of the citizens in certain categories (of shahids and of those handicapped at war or in the developments of the 20th of January 1990 or during the liquidation of the Chernobyl APS breakdown) are paid the social benefits that are to be terminated as of 1 January 2021 with the adequate rise in the presidential allowance assigned and distributed to such people. This will make the practice of addressed social aid to specific vulnerable community groups yet more clear and transparent while streamlining the pertaining legislation.

Going further by the agenda, Head of Affairs of the Parliament Firudin Hajiyev presented the 2021 cost estimate of the Milli Majlis of the Azerbaijan Republic. Mr Hajiyev spoke of the cost estimate of the Milli Majlis and of the Milli Majlis Staff for next year having been drafted in keeping with the legally prescribed rules, based on the manning table, the contracts concluded with the organisations providing the maintenance of the Milli Majlis office buildings’ engineering systems and on the relevant forecasts. It is planned to allocate AZN 42,270,400 from the State Budget for the maintenance of the Milli Majlis and it Staff. The payroll fund and the related deductions will make 81.6% of the estimated total. The office rooms of the 6th Parliament Members are fitted with computer sets and other necessary appliances; this work continues now, too. Centralised CCTV and Wi-Fi systems have been installed and commissioned in the foyers on all the floors of the office buildings; besides, a modern-standard server-room hardware has been installed and put in use. It is planned to purchase and install specialised equipment for e-document flow and e-personnel registry facilities at the Milli Majlis in connection with the advent of the state information system. Current maintenance is done regularly around the office buildings of the Parliament, in the meeting rooms, on the outdoors premises and the car-park.

The committee chairman Siyavush Novruzov commented on the cost estimate of the Milli Majlis.

Still further, Chairman of the Chamber of Accounts Vugar Gulmammadov presented the cost-estimate of his entity for 2021, saying that it envisaged approximately AZN 9.1 mn with a 3% increase from the budget of the current year. A portion of that would have to do with the compulsory medical insurance deductions for the benefit of the 2021 State Budget; 99.2% of the estimated total would go down in the personnel salaries. The projected amount is sufficient for the financial maintenance of the work that the Chamber intends to undertake during the coming year, according to Mr Gulmammadov.

That was followed by the second-reading discussion of the draft amendments to the Law ‘On Political Parties’ upon which Deputy Chair of the Milli Majlis and Chairman of the parliamentary Committee for Public Associations and Religious Entities Fazayil Ibrahimli briefed the assembly. He said that no member of the parliamentary political parties had any claim to make about the draft during its second reading at the common meeting of the concerned parliamentary committees.

The Bill was put on vote and approved in the second reading.

Last but not least, First Deputy Chair of the Milli Majlis and Chairman of the parliamentary Committee for Law Policy and State-Building Ali Huseynli gave an overview of the draft amendments to the Law ‘On the Institution of the Orders and Medals of the Azerbaijan Republic’ in connection with the introduction of the jubilee medal ‘The 15th (2005-2020) Anniversary of the Ministry of Emergencies of the Azerbaijan Republic.’ Mr Huseynli remarked that the ministerial staff handled their duties with distinction during the martial situation and after it. In his opinion, the new medal is going to be a good addition to the existing orders and medals of Azerbaijan.

The Bill was approved in the third reading.

With that, the plenary sitting of the Milli Majlis was over.

The Press and Public Relations Department
The Milli Majlis