All expences included: How did deputies re-draft Ukrainian budget?

Author : Yaroslav Konoshchuk

Source :

The deputies took the first step towards approving the draft state budget-2018 in the first reading. At a meeting of the Budget Committee on Wednesday, parliamentarians recommended the highest legislative body to adopt in the first reading the corresponding government bill, taking into account the proposals of people's deputies.
23:29, 24 October 2017

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Billions for export

Traditionally, parliamentarians have submitted a huge number of amendments to the country's main financial document. The implementation of all proposals and wishes would cost near 1.4 trillion hryvnia, i.е. slightly less than two state budgets.

So, the parliamentarians ask the government to allocate 2 billion hryvnias in the form of state guarantees for the project created by Radical Party - the Export Credit Agency. This, by the way, was supported by Prime Minister Volodymyr Groysman. It should be noted that the establishment of this structure for a long time was lobbied by radical MP Victor Galasyuk, however, an amendment to the additional funding was introduced by the representative of Petro Poroshenko’s bloc Viktor Kryvenko. At the same time, a number of members of the Budget Committee interviewed by the author of these lines noted that state guarantees were sometimes used as an instrument of misuse of public funds.

And what about socialism?

Deputies from the opposition propose the government to raise the living wage more than two times. If this project would be supported, the living wage may exceed UAH 3,000.

Separate categories of pensioners expect growth of pensions. But the number of recipients of subsidies, despite the likely increase in tariffs for utilities, may be reduced. According to the plans of parliamentarians, it is planned to allocate 55 billion hryvnias for subsidies, although the debt on these payments already amounts to tens of billions of hryvnias, and Naftogaz of Ukraine has requested much more. At the meeting of the budget committee, representatives of the Ministry of Finance joked that they would not register new subsidiaries.

Hope of extending the subway in Kyiv, Kharkiv and Dnipro

A number of parliamentarians propose to allocate funds at the expense of a loan from the EBRD and the European Investment Bank for the extension of third subway line in Kharkiv. But the additional subway stations in the capital, based on the draft budget, are still planned to be built only at the expense of the city. In return, it is proposed to write off part of the capital's obligations to the state treasury. For the construction of the subway in Dnipro it is planned to additionally provide more than 200 million hryvnia. According to the first reading, 1.1 billion hryvnia were planned for these purposes.

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The battle for agrarian billions

Serious battles for agrarian billions will also take place. At the meeting of the Parliament Budget Committee, MPs voiced the proposal to allocate no more than 1.5 billion hryvnia for the support of one agricultural producer, but the parliament did not make a final decision. Apparently, serious bargaining on this issue with the government and the Presidential Administration will take place. It is worth noting that a group of deputies, called agrolobby, insists that this amount should be 4.5 billion hryvnia.

Advantages for Prosecutor General's Office, Security Service and the President

Parliamentarians suggest adding a little more than half a billion hryvnia for Prosecutor General's Office, mainly to raise wages. Traditionally, parliamentarians propose to the government to think about additional expenses for the "Wall" project. True, it is not clear from the text on what precisely it is planned to spend these funds. But the SSU can additionally get almost 7 billion hryvnia. In particular, parliamentarians propose spending 3.6 billion hryvnias for the purchase of weapons and special equipment for the special services. But the expenses for the Ministry of Defense were left at the level of the first reading. Expenses for the president were proposed to increase by another 4 million hryvnia. Judges and their assistants are also potentially with profits. Parliamentarians propose to add 738 million hryvnia for their salaries.

Reforms are expensive

The Ministry of Health will additionally receive more than 13 billion hryvnias for the implementation of the medical reform adopted by the parliament. In particular, 13.4 billion hryvnias are planned to be allocated to the National Health Service, the initiator of which is called the deputy chairman of the  Petro Poroshenko’s Bloc  Serhiy Berezenko. The latter, however, categorically refutes these ties.

But the deputies want to save money on the patients. So, it is offered at the expense of means of the guaranteed package of medical services (it is paid at the expense of the state budget) to finance payment of utilities for polyclinics and hospitals. A reasonable question arises: what remains for the patients themselves?

The Ministry of Education received additional funds in connection with the reform.

Billions for roads construction

Parliamentarians propose to increase spending on road construction. In particular, it is proposed to increase spending on road workers' salaries by UAH 12.6 million, and also to provide additional UAH 6.4 billion in the state treasury, in particular, for repair of the Kyiiev-Znamenka road and Zhytomir-Chernivtsi road and a number of other roads. True, a few interrogated members of the Budget Committee informally say that such proposal can be "a mechanism for dividing budgetary funds."

Deputies’ wishlist

Do not forget the members of the budget committee and their colleagues, majoritarians. 5 billion hryvnia proposed to be allocated to the subvention for socio-economic development of the regions, which is called "allocating money to the districts" on the sidelines of the parliament.

Their colleagues, in turn, with varying success, defend their projects. So, it is proposed to allocate 7.5 million hryvnia for the creation of the complex "Ukrainian Bessarabia", 7.5 million hryvnia - for the festival in Kropyvnytsky, 5 million hryvnia a number of "servants of the people" proposes to allocate for the support of Petrikivskyi rozpys and the Plast organization. According to some members of the budget committee, not always the funds allocated for such projects would be directed to such destinations.

And what about money for living?

The parliamentarians propose to fill the budget by raising excises, rent, as well as external and internal borrowing and selling licenses for communication of the fourth generation. In particular, from the sale of licenses, parliamentarians expect to gain 6.4 billion hryvnia. As a representative of the Ministry of Finance joked during the meeting of the budget committee, parliamentarians decided to immediately sell licenses "for 5, 6 and other G". However, until now we have no 4G broad coverage. For this, it is necessary, among other things, to release the frequencies currently occupied by analogue TV.

Also parliamentarians expect to receive more than 49 billion hryvnia from the NBU. It is worth noting that in the first reading this amount was about 47 billion.

* * *

However, this is far from the final version of the budget-2018. In early November, as expected, parliamentarians will support it in the first reading, and then, as always, we will have long negotiations and "budget night."

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