New parliament: Five parties and hundreds of promises. How will they affect wallets of Ukrainians
The outcome of the early parliamentary election to the Verkhovna Rada shows that five parties have made it to Parliament. All of them are political forces with distinctive leaders. That is, the Ukrainians again voted for specific "persons" and public promises, not for action plans. Although it is the action plan, especially its economic aspects, that will reflect on the wallets of every citizen.
Ukraine held snap elections to the Verkhovna Rada. In the new parliament, Ukrainians want to see five parties: Servant of the People, Opposition Platform – For Life, European Solidarity, Batkivshchyna, and Holos. However, experts assure that traditionally, Ukrainians vote for parties' "front faces" and their public promises rather than for the action plans that parties or individual candidates declare. In fact, everything should be exactly the opposite. It is plans for the future, especially their economic aspects, which will directly affect the ordinary Ukrainians' wallets. UNIAN learned what the Ukrainians voted for "blindly" and what promises should citizens demand that the new convocation of the Verkhovna Rada fulfill.
Economic program of Servant of the People Party
The activities of this party are directly connected with the construction of a liberal economic model. Ruslan Stefanchuk, Presidential Representative to Parliament, told about the political force's mission: "The main mission is to break the system and propose a new economy model, where the state becomes a service, offering a different quality of services, launching private initiatives in all areas where there is judicial protection of any initiative and where investors come and get guarantees."
So, the economic plans are to conduct a national economic audit of the country with the involvement of domestic and international companies, to create a National Economic Strategy with the key goal of achieving the highest average European level of income and quality of life. There are promises of demonopolization of key industries, including the intention to make the Anti-Monopoly Committee independent and effective.
Also, the Servant of the People seeks to introduce the best possible treatment of foreign investors of Ukrainian origin, to audit the functions of state bodies and reduce their number, to provide amnesty to non-criminal capital at a preferential rate, to impose a tax on exit capital as soon as the necessary economic conditions arise; to develop a strategy for a gradual reduction of single social contribution, to make all fiscal agencies actually serve people, and to transfer all tax and customs procedures into a digital format. In addition, it is planned to introduce a transparent procedure for electronic opening and closing of a businesses, to ensure the protection of minority shareholders and corporate transparency, to reduce the number of procedures in construction and land acquisition.
There are plans in the social sphere as well: to conduct an all-Ukrainian census and audit the social security system, introduce a "Ukrainian economic passport" to allow all children receiving a share of the exploitation of natural resources into individual accounts, to introduce a second level of state pension provision, and to monetize all social benefits.
Also, the party focuses in its program on innovative technologies, that is, on shifting the economy to digital. In particular, there is a promise to introduce a program to ensure coverage of 100% of the country's territory with broadband internet and to create conditions for the integration of digital currencies into the legal field.
The "tariff" sphere wasn't put aside, either. Thus, the party promises to introduce a state strategy to optimize housing and communal tariffs through demonopolizing energy markets, increasing its own production of energy resources, and eliminating the corruption component in tariff setting. The intention of the political force to create conditions for the development of "green" energy with the simultaneous prevention of risks of industry monopolization and to abolish all formula pricing schemes on the principle of "Rotterdam +".
As for the infrastructure, they seek to introduce an independent quality control of road construction and repair, to spell out legislative conditions for the construction of concrete roads, to demonopolize passenger and freight traffic by rail.
Economic goals of Opposition Platform – For Life
This political force, according to the statements of its leaders, Viktor Medvedchuk and Yuriy Boyko, decided to pursue a policy of economic pragmatism. It declares the following priority steps: the formation of a favorable investment climate and the introduction of a special mode of investment activity; tax on the exit capital and the abolition of income tax; reduction of tax rates, the introduction of tax vacations for small and medium-sized businesses; the preservation of land owned by Ukrainian farmers, and the opening of the land market – only following a nationwide referendum. Also, they declare the intention to stop deindustrialization, degradation, and deintellectualization of Ukraine.
The main priority is the fight against poverty and ensuring social protection. And to this end, they promise: to reduce gas tariffs for the households to UAH 3,800–4,000 per 1,000 cubic meters (they intend to do this at the expense of, inter alia, direct supplies of gas from the Russian Federation, using Ukrainian gas for the needs of the households); to write off public debts for housing and communal services and establish fair subsidies; to increase the subsistence minimum, the minimum wage, the minimum pension to UAH 7,000, to increase the benefits at birth: for the first child – up to UAH 100,000, for the second – up to UAH 200,000, for the third and subsequent children – up to UAH 400,000. It is planned to introduce a progressive system of taxation of personal income and a non-taxable income of individuals at the level of the minimum wage.
Economic promises of European Solidarity
The party of the fifth president, Petro Poroshenko, named its program "Protect the European Future of Ukraine!"
Its main principles are as follows: the expansion of the middle class, that is, the growth in the number of wealthy people, enterprising citizens who rely on their own strength and are ready to take responsibility for their lives and the future of the country.
They also plan to complete decentralization and pursue the administrative reform, which will give the community more powers and means to implement them. They also promise to strengthen civic education – to educate Ukrainians to defend their rights in order to eliminate manipulations of their opinions. Also, the plans include working on ensuring real equality of opportunities for women and men in all spheres of the country's life.
They promise to create special institutions to combat corruption, to eliminate the causes provoking it, first of all, to minimize and simplify administrative procedures, in particular, by introducing digital technologies. To combat offshore parties, the party plans to adopt changes to the tax legislation on the implementation of the Plan of counteracting the erosion of the tax base and deriving profits from taxation, to deprive law enforcement and security agencies of the powers to interfere in economic activities. In contrast, they propose to create a single financial security body that is set to engage in dialogue with taxpayers.
The party also intends to contribute to the creation of jobs with high wages and stimulate the attraction of investments and innovations.
Also, the priority tasks of the party are Ukraine's integration into the EU energy and digital markets, approaching the standards of the Schengen zone, and deepening customs cooperation. The political force believes that the tax on profits of enterprises should soon be replaced by an exit capital tax. The conditions for the exports and imports of goods should also be simplified by introducing the institution of authorized economic operators and joint transit procedures with the EU.
It is proposed to support the development of small and medium-sized businesses by simplifying regulatory procedures, introducing the same rules for all, and expanding lending opportunities. Moreover, the party insists on maintaining a single tax. But social standards are planned to be improved due to the growth of budget revenues.
"In order to move from stabilization to growth and prosperity, the state should invest in the reform and development of education, and promote closer interaction with the economy. Ukrainian youths should receive opportunities for education, employment, and development with the support of transparent government programs. Infrastructure development and environmental protection are indispensable factors for a comfortable life of citizens," the party says.
Economic bid of Batkivshchyna
Batkivshchyna named its action plan "New Deal". In principle, it's with this plan that the leader of political force, Yulia Tymoshenko, earlier ran for president. For the next five years, the main goal of the party is to gradually reach the level of Poland’s average wage in dollar terms, "as for today, the average salary in Poland is 3.5 times higher than that in Ukraine."
Also, Batkivshchyna promises to introduce a personalized pension system. Moreover, the minimum pension will be raised to the level of UAH 3,094: "no pensioner will receive a pension less than the real subsistence minimum for pensioners, approved by law."
The steps to achieve this goal promise the following: the state will guarantee the preservation of private retirement accounts, pension contributions will be deposited in a personal account at a state bank throughout the entire period of operation; pension savings will be indexed annually plus interest, on the basis of deposits.
The party assures that it will reduce the price of gas for the households by half, which, in turn, will halve the tariffs for heating and hot water supplies. Moreover, Ukrainian gas output, which is planned to be increased by several times, the political force promises to allocated exclusively for the needs of the population.
As for tax innovations, Batkivshchyna wants to abolish 37 taxes and fees, replace the VAT with the minimum sales tax, and the income tax – with an exit capital tax.
The party also advocates the extension of the moratorium on farmland sale, the development of renewable energy, demonopolization of gas imports, the return of payments for the birth of children in the amount of UAH 50,000 for the first child, UAH 100,000 – for the second, UAH 150,000 – for the third; micro-lending; and benefits to employers for the "first job" for youths.
Moreover, Batkivshchyna promises to implement the first stage of its program within the first 100 days after the elections.
Economic benefits promised by Holos
The program of the Holos Party, whose leader is a famous musician Svyatoslav Vakarchuk, focuses on the introduction of digital technologies and innovation that will be able to raise the national economy to the European level.
It is proposed to adopt the "Digital Freedom Act", which will establish low taxes for the IT sector. In addition, the party advocates the abolition of the outdated Labor Code, state financing of the best startups, the introduction of real protection of intellectual property rights, the creation of broadband internet access, and the introduction of 5G.
Holos also promises to make the Antimonopoly Committee and energy regulator independent from oligarchs. It is planned to create and make public a system for the automatic collection of information on relations between members of oligarchic clans, financial transactions, to legally prohibit oligarchs from participating in the privatization of large enterprises, and to make the management of strategic enterprises independent.
Also, the party intends to organize the land market in such a way that agricultural holdings are deprived of the opportunity to rent land for a penny, and to intensify work on filling the electronic land cadastre. After the launch of the land market, the party promises to provide concessional loans to small farmers for buying shares and doing business, while state-owned and communal lands will be sold and leased through a public electronic bidding.
The Security Service of Ukraine, the National Police, and other power structures are planned to be deprived of their authority to investigate economic crimes. A new institute will be created to this end. It is also proposed to reduce the tax burden on wages and improve the profit taxation system for businesses. It is planned to modernize the infrastructure through public and private investments. The bid is placed on concession.
The party sees the future of Ukrainian exports exclusively in the direction of diversification in order to completely eliminate dependence on Russia.
Holos also wants to strengthen NABU's investigative powers, reload anti-corruption bodies — elect new leaders through transparent competition with the involvement of international experts, and create an effective procedure for confiscating property stolen by officials. It is also proposed to cancel the right to bail for suspects in corruption-related crimes, to improve the electronic public procurement system, ProZorro. The key initiative is the large-scale deoligarchization of the Ukrainian economy: "oligarchs must become ordinary businessmen."
So, it's these "averaged" economic innovations that the Ukrainians voted for. How they will be implemented in practice we'll see once the new parliament convenes, a coalition is created, and then a government is formed. It is the government that will be engaged in the implementation of economic priorities. Or will promises remain promises?