The Ukrainian budget in 2020. The budget of poor agricultural country colonial type

Украинский бюджет-2020. Бюджет бедной аграрной страны колониального типа

© RIA Novosti Ukraine, the Cabinet of Ministers of Ukraine on Tuesday, November 5, presented edited for the second reading the draft law on the state budget in 2020. The updated bill, the government approved on Sunday, and then, before the text of the document appeared on the official portal of the Verkhovna Rada, made a presentation of the draft budget in pictures.Feeding the first version of the budget in Parliament, the new government effectively used the experience of predecessors, for which he was criticized by deputies. Ministers promised a second reading to fix it. To the draft budget for next year submitted more than 2 thousand of edits, the budget Committee of the Parliament suggested to the Parliament to consider fully or partially only 772 suggestions, and 1404 to reject.

Drastic changes have occurred

As stated by Prime Minister Alexey Goncharuk, the revised draft state budget for 2020 does not include tax increases.

In preparing the bill a second reading, the government has increased budget spending by 15 billion UAH — to UAH 1,195 trillion (3,1 trillion rubles).

As explained during the presentation the Minister of Finance Oksana Markarova, plan income for the special Fund increased by 3 billion UAH (7.78 bln RUB) in the hope of the adoption of the law on gambling. Plan revenues of the General Fund budget increased by UAH 10 billion (25,94 billion RUB) due to the increase in dividends from state-owned companies, small increase in expected income tax on profit from rent of state property.

According to Markarova, an additional 15 billion UAH of expenditures are mainly for salaries of teachers and supporting schools, support program for medication and treatment abroad, the development of culture and tourism, social programs totaling more than 1 billion UAH on the program of development of airports and construction of bridges.

Expenditure has also changed. Planned expenditure increased from 1,112 trillion UAH (2,88 trillion RUB) to 1,180 billion UAH (of 3.06 trillion rubles).

Also changed the indicators of the state budget relative to GDP. The state budget revenues to GDP decreased from 26% to 24.2%, the deficit to GDP ratio decreased from 2.28% to 2.09 %. The ratio of public debt to GDP decreased from 62 per cent planned earlier, to 52.4%. “The fundamental for us in this budget is to lay the necessary resources for the development of the country, but we see that development will not, if the person will not be provided with the most necessary,” — said Goncharuk during the presentation of the draft budget. In particular, according to him, in retirement, the government has allocated 173 billion (448,8 bn). The Cabinet intends to raise pensions to single pensioners for the payment of this allowance in the budget of 806 million UAH (of 2.09 bn).

In addition, UAH 48 bn (RUB 124.5 billion) allocated in subsidies for housing and communal services. It is less than this year, although the actual need is estimated by experts at 70 billion (182 billion).

The bill provides for the allocation of 293 billion (760 billion rubles) in the sphere of social welfare, and medicine 113.3 billion UAH (293,9 billion rubles).Budget security without development

The Prime Minister called the government prepared a draft law “budget of development and human security”. “The 2020 budget does not increase debt, and reduce their number: revenues are not inflated due to tax increases, we do not raise prices, reducing the costs of bureaucracy by 10%….We strive to build an effective system of fight against poverty! Provide social support to all who need it. We have laid enough money on subsidies and pensions, including indexation. Moreover, we are increasing the monthly payments to each pensioner over 80 years 670 UAH (1,7 thousand rbl. — Ed.)”, — Prime wrote on his page in Facebook.

However, the subsistence minimum for able-bodied persons prescribed in the draft budget, will rise in three stages from December 1 next year will be UAH 2270 (5.9 thousand rubles) per month. The bill also proposed to establish from 1 January 2020 minimum wage of $ 4723 $ per month (12,252 thousand rubles). Now the subsistence minimum for able-bodied Ukrainians is the 2007 UAH (5.2 thousand rubles), the minimum wage — 4173 UAH (10,825 thousand rubles).

In recognition of the Prime Minister, the draft budget for the year 2020 for security and defence will be the largest in the Ukraine since independence. Allocated to 5.45% of the projected GDP is 245,8 billion UAH (637,65 bn), of which 136 billion (352,81 bn) on defence. As for the interior, this year we plan to increase funding security by 11.8%. The total budget of 93 billion UAH (241,26 bn). A portion will go to the promotion of personnel in the Ministry of internal Affairs. Will be increased salaries for employees of national police by 10%, the State border service by 15%, the state service of emergencies — 14% of the State migration service — 6%.

The second reading of the draft again appeared subvention on socio-economic development of the regions in the amount of 2 billion UAH (5,19 billion UAH). Goncharuk said that the return of the draft budget for 2020 of subsidies on the socio-economic development is “an okay compromise” between the government and the Parliament.

The budget for the preservation of poverty

Economic analyst Viktor Skarshevsky said that his prediction is wrong, the draft budget has not undergone any radical changes for the second reading. “If you take the totals of the budget “radical” has changed by 1%, slightly increased revenues and costs. As I predicted, the rate of hryvnia to the dollar, revised from 28.2 UAH to UAH 27. And because of this we had to reduce the revenues from VAT on imports — they fell by 7.4 billion (19.2 billion rubles — Ed.). Therefore, the revision of the macroeconomic forecast has not led to increase of budget revenues, as many thought, but to decrease. And here not especially helps, we have revised the GDP growth forecast from 3.3% to 3.7%. This effect has a smaller impact on the increase of budget revenues than strengthened the hryvnia to the reduction of income.

But still, the government imposed new revenues from the legalization of gambling, even though the relevant law has not been adopted. They divided a skin of not killed bear and even painted where to spend revenues exceeding 3 billion. As they increased in comparison with the first reading, the income from the dividends and the profits from state enterprises. The government also reduced the amount of repayment and servicing of state debt, again due to the strengthening of the hryvnia,” Skarshevsky said in comments to Ukraine.ru.The expert noted another change in the draft budget, which the expert described the political.

“On first reading had provided 9.5 billion UAH (24,64 billion rubles — Ed.) at the State regional development Fund. Now this sum was divided into two parts, and left 7.5 billion on GFR, and 2 billion provided for deputies — subvention on socio-economic development of individual territories. The tradition continues: the same as last year, for the first reading were not for this subsidy, and the second she appeared. However, last year recorded a UAH 4.7 billion (12.19 billion rubles — Ed.) and this only two.

By the way, I predicted that the budget will change very slightly and call the amount of 15 billion hryvnia, although the deputies of their “hotelok” filed on 2 trillion hryvnia (of 5.19 trillion rubles — Ed.). I did a forecast similar to last year, when the MPs also filed more than 2.1 thousand amendments to two trillion UAH, and the Cabinet Groisman considered edits only 17 billion UAH (44.1 billion rubles — Ed.). Now a completely different government, a different kind of deputies — 80% new, but all the same,” said Skarshevsky.

The analyst drew attention to the statement of the Prime Minister that the government borrows less than it pays, thereby reducing the national debt, not true.

“When the Prime Minister and the Finance Minister talking about reducing the national debt, they mean a percentage of GDP, not absolute numbers. In dollar terms at the average exchange rate next year plan to make the internal and external debts of $12.7 billion, and to pay for $10.4 billion That is, public debt in dollar terms will grow by $2.3 billion While external debt will decrease by $300 million, and internal — will increase by $2.6 billion,” — said Viktor Skarshevsky.As the expert noted, the budget does not include funds for the operation of export credit agencies, and no program for farmers to purchase agricultural machinery of domestic production.

“The government called the budget the development budget as three previous budget the government Groisman, but I do not see. In the past, though some penny was allocated to export credit Agency, was a small program to support farmers for the purchase of the Ukrainian agricultural machinery, and in this budget is not even that.

The government declares some sort of large-scale privatization, and expect only 6 billion hryvnia (15,57 billion rubles — Ed.)from the low and 6 billion UAH — from large-scale privatization. It is beyond not enough for the large-scale privatization: 5-6 billion is one “Tsentroenergo” (at least, until the advent of the current government, this company so estimated). Nothing is provided in the state budget and from the sale of state agricultural land.”

According to the economist, despite the fact that people in the government and in Parliament to change the budget process continues to live his life.”With such a commodity economy, when the government goes with the flow, and this flow is called “all in the name of the IMF”, the other budget, by definition, can not be. This budget is built very effective in preservation, cementing poverty. Moreover, social benefits are miserable, nothing is done in order to start the economy. There is only the mantra: “We need economic growth, on the basis of economic growth all will be well.” But when you say this phrase, say, due to what will this economic growth. This is not due to one-time privatization or sale of land, liberalization and deregulation.

Need active policy of the government in creating those jobs. First, you need export support. We are a poor country with a very small domestic market, so through the internal market we will not be torn. If you want to really make a push and pull, it is only with export orientation. Not just metal, ore and grain is the road to nowhere and the same preservation of poverty, preservation of the negative structure of the economy. And there already you have to think, use the tools — export credit Agency, industrial parks, providing free infrastructure for the construction of new enterprises. Need to pursue an active policy of promoting new export markets. Under this already tightened the domestic market — rising wages, new jobs are created.

The budget 2020 budget of poor agricultural commodity of the country, not afraid of the word, the colonial type,” — concluded Viktor Skarshevsky.Fedor Quiet

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