President threatens veto on budget

18:29, 04 December 2006
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Yushchenko is worried about some social tendencies

Victor Yushchenko has said the government has accepted a number of key proposals when preparing next year’s budget, according to the President`s press-office.

      Tax changes and privatization plans will now be approved as separate bills.

      “It must be the first time that we demonstrate that tax legislation is stable and not influenced by next year’s budget,” he said.

      The President is also glad the government is going to auction investment-attractive companies, such as Ukrtelecom and Odesa Port Plant.

      Mr. Yushchenko said the parties had compromised on the renewal of free economic zones. He believes Ukraine needs such zones but does not want them to be used in murky schemes.

      “We must learn a lesson, change laws and then make relevant decisions on whether we should or should not reopen this or that zone,” he said, suggesting that parliamentarians consider the re-opening of each zone individually.

 

      “This is a right decision which enables us to effectively monitor and seriously substantiate the expedience of reopening or creating this or that economic zone,” he said, promising to help boost competition in Ukraine.

      Mr. Yushchenko also welcomed the decision not to give the government the right to vouch for private companies.

      “In fact, it could have caused a budget deficit,” he said, adding that it had made Ukraine’s debt, which has not been paid off yet, grow a few years ago.

      The budget allocates an additional UAH 80 mln to develop the judicial branch. It changes the logic of investment by investing UAH 423 mln in Ukraine’s priority industries, such as space exploration and aviation. The government plans to support industries and give more money to the agricultural sector. It will also raise subventions to local governments by UAH 6.4 bln. UAH 27 mln will be allocated to implement small and medium business compensatory programs. The government is going to purchase a Gamma Knife, build ice rinks in Kyiv, Lviv, Kharkiv and Donetsk, complete the construction of an exhibition center in Kyiv, build a Holodomor Memorial and implement other important social projects.

      “So I would like to say that the work of experts from the Secretariat and the government has yielded positive results,” he said.

      However, Mr. Yushchenko is worried about some social tendencies.

      The President said his government had been seeking to help people with disabilities and pensioners since 2005. The minimum wage grew by 40% in 2005 and 20% in 2006 but would only be raised by 12.5% in 2007. He said this increase coincided with the expected rate of inflation and thus “makes it impossible to speak about real growth of incomes.” He said consumers were main investors in the national economy and opined that “such an approach narrows the capabilities of the domestic market.”

      Mr. Yushchenko believes this problem should be re-considered after the first quarter of 2007.

      “If there is any chance to earn resources which we must use to raise the minimum wage, then we will have to do it immediately,” he said.

      The President believes the government had wrongly calculated next year’s living wage. He said the minimum pension had been equated to the living wage in 2005.

      “This is a great achievement which Ukraine had been seeking for many years, and I am worried this proportion will slightly `suffer` next year,” he said.

      The President said the minimum pension was UAH 20 lower than the living wage.

      “This is a big sum, if we consider the fact that there are twelve million pensioners in Ukraine,” he said.

      Next year, he added, the situation will get even worse and each pensioner will lose UAH 39, which will make other social payments decrease.

      “I would like to emphasize this point and insist that the government and other parties involved in the preparation of the budget consider this position. This is the issue I will definitely look at when signing this document,” he said. 

      Mr. Yushchenko threatened to veto the budget if it does not include the above-mentioned comments.

      He expressed hopes the budget would be passed and signed.

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