Tyhypko: Cabinet will take hard line on budget for 2000 (12/05/99)

Tyhypko: Cabinet will take hard line on budget for 2000

by Roman Woronowycz
Kyiv Press Bureau

KYIV - Ukraine's Vice Prime Minister Serhii Tyhypko said on November 29 that changes to the 2000 budget approved by the Verkhovna Rada are unrealistic and that the Cabinet of Ministers may not be willing to compromise with the Verkhovna Rada in its annual attempts to balloon the expenditure side of the national budget.

Mr. Tyhypko, who carries the economic reform portfolio, said the national deputies again have tacked on expenditures that will destroy any hopes for a healthy and realistic budget.

"Subsidies, subsidies, subsidies - we cannot afford to continue this way," said Mr. Tyhypko at a press conference on economic reforms.

Ukraine's Parliament approved a first reading of the national budget on November 18, but only after it boosted appropriations for social safety net programs and raised total budget expenditures to 40.75 billion hrv. The Cabinet of Ministers is now attempting to reconcile the differing figures, after which the budget will be returned to the Parliament for a second reading.

The original budget presented by the Cabinet of Ministers called for a budget surplus of 554,000 hrv, with outlays pegged at 38.6 billion hrv and revenue at 38 billion hrv. It was the first attempt at a budget surplus, which the government hoped would ease its balance of payments problem in the next year. Ukraine is scheduled to pay some $5 billion in foreign debt in 2000. It also must meet an International Monetary Fund demand that Ukraine have a deficit-free budget next year.

During Verkhovna Rada debate on the budget on November 18, Budget Committee Chair Yulia Tymoshenko emphasized that with the current economic conditions in the country, the government had no right to propose a budget surplus.

But even with the jacked-up expenditures, the budget will remain balanced, said committee member Leonid Kosakivsky. "All the figures that we are proposing to increase are fully covered by additional resources found by the committee," said Mr. Kosakivsky.

Nonetheless, a week later, during a Cabinet of Ministers session, Assistant Minister of Finance Stanislav Bukovynsky countered Mr. Kosakivsky's claim. He said the Budget Committee had offered no concrete sources of additional financing for their inflated figures and called them "unrealistic," while adding that there was no way the government could crunch all the changes made by the Budget Committee and approved by the national deputies.

Both Mr. Tyhypko and Prime Minister Valerii Pustovoitenko are insisting that they will take a hard line in regard to the changes that have been made, which could lead to another stalemate between the executive and the legislative branches. Two years ago the two branches of power butted heads for six months before approving a budget.

Prime Minister Pustovoitenko said revenues may not have become a problem again had the Parliament passed the numerous tax bills the government has submitted for consideration, which he projected would have increased government coffers by 6 billion hrv.

Mr. Tyhypko said the 2000 budget is the key to any economic growth in the next year and any hope of increased investment in the country.

"I believe that we have too often submitted to compromise. At the Cabinet of Ministers meeting today I said that we have no right to compromise. The time for compromise is over," said Mr. Tyhypko.

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