Parliament passes 2002 budget (12/16/01)

Parliament passes 2002 budget

by Roman Woronowycz
Kyiv Press Bureau

KYIV - Ukraine's Parliament approved the parameters of a budget document on December 13, after finding an additional 1 billion hrv in revenues for budget enhancements demanded by national deputies before they would approve the bill.

By a vote of 241-122, the national deputies voted to cap spending at 44.3 billion hrv ($8.44 billion) and to establish a debt ceiling of 4.3 billion hrv. The figures are based on expected revenues of 48.6 billion ($9.26 billion) hrv in 2002.

The Communist faction provided 106 of the 122 nay votes, while the Left-Center faction abstained from the vote, and the right-leaning Reforms and Order and Batkivschyna factions did not vote at all.

Prime Minister Anatolii Kinakh, who was present for the vote, praised the lawmakers for their cooperation and particularly for an increase in the minimum wage, which came prior to the budget vote.

"The increase of the minimum wage is needed to rid Ukraine of its poverty," explained Mr. Kinakh.

The deputies removed 40 of the more controversial line items from the budget bill for additional consideration, including defense spending, highway funding and coal sector financing, to be addressed on December 20 after the Cabinet of Ministers massages the numbers.

Only a week earlier the budget process appeared stalled and even paralyzed when the legislative body fell 15 votes short of the 226 majority needed to approve an initial second reading of the bill, which establishes the revenue and outlay sides of the budget, as well as the debt ceiling.

While various national deputies demanded that defense, education and medicine obtain more funding, President Leonid Kuchma criticized the lack of support for the coal industry in the government's budget plan.

The legislatures haggled over how to proceed for several days before deciding at a meeting of the parliamentary leadership on December 10 that five additional revenue bills would be introduced, which would raise the necessary money through additional taxation.

One of the bills elicited an outcry from small-business representatives, some 2,000 of whom demonstrated before the Verkhovna Rada building as deputies voted to approve two of the bills. The small businesses believe that the additional tax burden will bankrupt many of them.

The national deputies also hurriedly approved a new minimum wage, which will be set at 140 hrv after the New Year and raised to 165 hrv on July 1. The bill, introduced and passed in a single vote in order to allow for the budget vote to proceed, did little to garner support from the Communists and Socialists for the government's financial plan for 2002.

Leftist lawmaker Natalia Vitrenko summed up the feelings of her colleagues when she told the session hall that the proposed minimum wage figure still falls embarrassingly short of what is required. She explained that the International Labor Organization has established that the minimum wage in a country should be the officially designated minimum amount required to survive plus 25 percent, or 467 hrv per month in Ukraine - a figure far short of what the lawmakers passed.

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