Budget payments in Ukraine set to “stop”. On the page of the Ministry of Finance in Facebook message appears, that the payments that have been registered in December, the state Treasury will pay “after the analysis of priority”. The reason for the shortfall of budget revenues, that is, a simple lack of money.
Last night we published the decree of the Prime Minister Alexey Goncharuk, in which he instructed the Finance Ministry to bring an end to the state Treasury for payment and registration of encumbrances expenses. This is done, ostensibly, in order to reduce the budget deficit.
The Disposal Of Alexey Goncharuk. Photo: Telegram/The Dark Knight
This means that payments made prior to the end of the year will not be, – said, “the Country” Executive Director of the Association of Ukrainian cities Oleksandr Slobozhan.
The restriction does not affect the so-called protected items – pensions, salaries, social benefits and so on.
But all sorts of development projects (construction, investment, infrastructure projects, etc.), says Slobozhan, “put to a card index,” that is, money for them or not give, or be divided into manual mode. And this despite the fact that for several months the expenditure part of the budget and so nedosypaniya – individual articles are financed by only 20-30%.
“Country” versed why the budget suddenly ran out of money, and for how long the “stop” payments.
Nothing to pay
Budget-2019 experts have long dubbed a failure. Most of the year he nedosypaniya on the revenue side.
As reported the State Treasury service, as of 18 December, the budget is made for income on 89.8% of. The “hole” in the budget since the beginning of the year exceeded 100 billion UAH. With about 38 billion Korean customs.
The main reason for the chronic shortage of funds – a sharp strengthening of the hryvnia. This has led to the decline in revenues from fees that are tied to the dollar or the Euro, as well as import VAT (despite the fact that import of goods in Ukraine is growing).
It is now clear that by results of the year’s budget will be narrowly missed by 9-10%.
The authorities have not only to recognize the problem, but urgently looking for ways of its decision. Because the money for payments of all planned expenditure articles simply no. That is, either you need to revise the budget, increasing its deficit, which is unlikely to please the IMF, which closely monitors for this budget measure or to enable the printing press.
If you do nothing, then may be that would not only Finance the construction of schools and kindergartens, but also to pay pensions and salaries.
Therefore, the government decided to simply stop payments on “excess” items.
“The information that we have certain shortfalls in the state budget – it’s true, – said yesterday the Prime Minister Alexey Goncharuk. – Indeed, certain programs until the end of the year will not be funded”.
What will no longer Fund
According to people’s Deputy Alexey Goncharenko, outlines the problems with funding in the following articles:
the state Fund of regional development (which means that you will not receive the promised money, schools, kindergartens, hospitals);construction of roads;procurement of medicines;the financing of public institutions (the regional administration, bodies of the tax and customs services, the police, defense Ministry and others).According to Slobozhana block in the first place, the so – called development projects, construction and infrastructure.
“It’s just those expenditure by which to maintain and develop social infrastructure on the ground, built kindergartens and schools”, – says Alexei Kusch.
For the state investment projects, as reported by the audit chamber following the results of 9 months of this year, plan on funding has not performed nearly 26%. Now the money is, apparently, no longer pay.
Other programs the Ministry of Finance is going to analyze “the priority”.
The head of the Secretariat of the Council of entrepreneurs under the Cabinet of Ministers Andrei Zablovsky says we can cut programs on which it is so under-funded. They simply recognize the “extra”.
According to the chamber, after 9 months not even started the funding for 32 programs budget in the amount of about UAH 2 billion. This, in particular, payments on the President’s Fund to support educational and research programs for youth in a billion hryvnia.
But there are strategic articles. For example, according to the Ministry of health for 9 months of this year, the funding was only 39%, i.e. almost 5 billion less than the plan.
As pointed out by the audit chamber, is a traditional practice associated with long-term agreements for the purchase of medicines. And the peak of payments of the Ministry of health is in the end of the year, including on Dec.
Now the purchase of medicines under question.
“According to experts, until the completion of the 2019 budget year the tax and customs authorities will have to mobilize about 15 billion hryvnia. Other planned receipts in the amount of 80 billion hryvnia did not appear in the budget, Accordingly, the number of articles of the state budget for these 80 billion hryvnia will remain not funded. In fact, the activity of the country has been reduced to simple survival, after all, are only paid salaries and pensions. On the implementation of some projects it is not. Moreover, the Ministry of Finance (state Treasury) before this block in manual mode the bleaching of payment of the main managers of means of the state budget, and it is 30.7 billion hryvnia, of which 19.7 billion — is the cost just buffed articles. On 1 December, the government already owed 10.1 billion UAH to local budgets for subsidies and grants, including a social nature”, — wrote on his page in Facebook the people’s Deputy Oleg Kulinich.
Money in manual mode
According to Alexei Kusch, is essentially a revival of “filing”, under which the country lived in the dashing 90-E.
“What is a Rolodex? It is a kind of queue of applicants for funding. All make the list, but the funding as funds become available. And the money is distributed in manual mode”, – says Alexei Kusch.
The transition to such a model budget finansirvaniya is a serious Wake – up call. “This indicates the approach of a systemic crisis and confirms that the domestic financial system is actually “dried up,” – said the expert.
Alexander Slobozhan remembers that this has happened. In 2008-2009, in the Wake of the global crisis the authorities have also suspended budget payments.
The situation uslovljena the fact that at the end of the year are the massive payouts.
“Everyone is in a hurry to master budget financing. Because of this, the end of the year is jumping the dollar, because the market is flooded with local currency. But, apparently, this year this will not be the recipients of budget money was on a starvation diet,” says Kusch.
But the manual mode of the distribution of funds is also the opportunity to keep local authorities on a short leash – one to give money, and others – to put in place. And it is possible that the Central government will take this opportunity to rein in local officials who strongly opposed the proposed Zelensky adjustments in the decentralization reform.
Or everything will be much more banal – the money will be distributed in manual mode, “rollback”, as it was in the same “dashing 90-e”.
According to experts, the country has put “on index card” right now is not accidental.
Budget shortfalls have reached a critical size, and if you pay for all applications, it may be that the priority articles of the money is simply not enough. “The government enjoy daily updated picture where you can see the balance of the budget, funding requirements and so on, you can quickly transfer funds to articles that require urgent funding, and to slow down others,” said Andrew Zablovsky.
Programs that applied for funding before December 1, the authorities promise to pay. But if you apply it, already, say, a tender was held and executed some of the work, the money can hang on time or even forever.
In the theory of fiscal debt should pay off — if not this year then next year. But not on all programs. The fact that the budget financing for the next year does not pass that is not paid in the current year is just being born. And next year the budget of the programme must be approved again. With the exception of programs that are financed from General and special Fund budget — it is possible to transfer unused funding for another year.
Will I have to pay salaries and pensions
Restrictions will not affect the so-called protected articles, that is, all social payments, pensions, subsidies, bottled allowances, scholarships, salaries of public sector employees. They will pay on time, promise in the Ministry of Finance.
But here there are nuances. Salaries of teachers and medical personnel not directly included in the state budget. They are considered in the subventions to local authorities. This year the subsidy was originally calculated incorrectly – without taking into account the increase in the minimum wage, that is allocated 10-15% less than actual requirements, – the analyst of Institute Growford Alex Kush.
“When we said that medical and education subventions deficit, the government replied to us that “will solve everything” and “all balance”. But nothing is balanced. In the end, the teachers and doctors of any arrears of salaries. And how the government will solve this problem with the limitation of payments is unclear,” says Slobozhan.
The head of the head of trade Union of miners Mikhail Volynets, salaries of miners, the Cabinet ordered a little more than 300 million hryvnia, while the real need – more than a billion. And only the activation of the protest movement forced the government to fork and add money.
That is, while the basic social payments are more or less regularly, but are already visible problem areas. In the future they can only increase.
“Because we have only seen the tip of the iceberg – the decrease in budget revenues due to the strengthening of the hryvnia. But we do not see the main impact on the budget of a systemic crisis, in which now comes the domestic industry. Customs duties can be “corrected” due to the devaluation of the hryvnia, but the downturn in the industry is deceleration of the economy as a whole. And quickly not correct,” says Kusch.
“Minus”, obtained from the decline of industry, Ukraine will feel in the next year. And if the collapse of the industry will continue to grow, it is not excluded that the budget will not be enough money not only for various “excesses”, but also for the necessary salaries and pensions.Liudmila Ksenz