Rada's budget debate reveals wide chasm between opposing sides (11/05/06)

Rada's budget debate reveals wide chasm between opposing sides

by Zenon Zawada
Kyiv Press Bureau

KYIV - One man's junk is another man's treasure.

Or in the case of Ukraine's 2007 budget, what Parliamentary Opposition Leader Yulia Tymoshenko called a "genocide," First Vice Prime Minister Mykola Azarov considered weighted, balanced and reconciled.

"All social programs that exist today," are absolutely preserved in next year's budget Mr. Azarov said. "Spending for them has increased."

Ukraine's Parliament debated and swiftly passed the first reading of Ukraine's 2007 budget on October 31, but not without the usual fireworks.

Complaining that she was allowed only three minutes to speak by Verkhovna Rada Chairman Oleksander Moroz, Ms. Tymoshenko called the budget shameful, just like the coalition government.

"The budget's social portion is absolutely ruined," she said. "The minimum wage and pensions don't increase in this budget."

Once her three minutes expired, she refused to leave the podium, provoking a mild standoff.

Mr. Moroz allowed her seven more minutes as other national deputies decided to yield their time to her.

"Unfortunately, all social programs are practically ruined, particularly those related to wages and pensions," she continued, repeating herself.

"Veteran pensioners are at the Rada at the moment. I would like to tell them that their requests were absolutely not taken into account. Veteran pensioners are practically deprived of normal pensions, and I would like for them to turn to the government, before it's too late."

Real income grew 20.5 percent when she was prime minister, Ms. Tymoshenko said, while the 2007 budget is planning for 8 percent growth.

Meanwhile the income tax will increase from 13 percent to 15 percent, she said.

"This means that every person absolutely will undoubtedly lose a part of their salary," Ms. Tymoshenko said.

The budget cuts financing of the State Pension Fund by $1.1 billion, she said, which means no one's pension will increase. Utility bills will also increase markedly, she said, without any government subsidies.

City governments are burdened with handling social programs, but the 2007 budget doesn't allocate them adequate funds to meet the public's needs, Ms. Tymoshenko noted. Instead, the budget falsely inflates city budget incomes, she said.

The budget has a 2.6 percent deficit that plunges Ukraine further into debt, she continued.

It also includes free economic zones, which she described as tax loopholes for businesses that support the Party of the Regions.

Tymoshenko Bloc deputies complained that they received copies of the budget just three hours before the October 31 session began, and that comparative budget tables were received only a half-hour before voting.

"Is two or three hours enough to seriously and carefully read this document in order to vote for it?" asked Oleksander Turchynov, Ms. Tymoshenko's closest advisor.

Party of the Regions National Deputy Volodymyr Makeyenko, who chairs the parliamentary Budget Committee, said printed versions of the budget were distributed the day before.

He and other coalition government leaders dismissed Ms. Tymoshenko's criticisms as distortions, touting the 2007 budget as responsible and balanced, particularly in the social spheres.

In fact, their claims were direct contradictions of Ms. Tymoshenko's criticisms: the State Pension Fund will have 1.5 times more financing than the 2005 budget, wages will increase by 12.5 percent, and social spending will increase by 8 percent from last year.

Specifically, new mothers will continue to receive $1,700 in government support, Mr. Makeyenko said.

Mr. Azarov personally guaranteed that by 2008, Ukraine will have between $5 and $7 billion in foreign investment. He accused the preceding Cabinet of Ministers of failing to properly manage the 2005 and 2006 budgets.

In fact, the 2006 budget even failed to adequately fund Ukrainian cultural programs that the government is currently trying to cover, he said.

"I would like to turn your attention to several programs - 'Insuring Development and Application of the Ukrainian language' - nil, 'Measures to Establish Cultural Ties with the Ukrainian Diaspora' - nil, 'Creating a Distribution for National Films' - nil," Mr. Azarov said. "Presidential grant for young artists for creating and realizing creative projects, nil, publishing book under the program 'Ukrainian Book' - nil. All these programs will be financed 100 percent by the year's end. But a question arises: Why weren't they financed through August?"

Mr. Azarov neglected to mention that the 2007 budget denies funding for the planned Holodomor Memorial Complex and Ukrainian Institute of National Memory.

Mr. Azarov accused Ms. Tymoshenko of resorting to populist politics in her criticisms, while Socialist National Deputy Oleksander Baranivskyi accused her of lying outright about the 2007 budget.

"Budgets are never ideal, just as a husband's wage at home - whatever he brings, it's always too little for his wife," Mr. Baranivskyi said, mocking Ms. Tymoshenko.

He particularly praised the budget for increasing education funding by $1 billion, which would cover computers and textbooks.

With the 2007 budget, Ukraine's Parliament is on the cusp of a historic moment, Mr. Makeyenko said. "It's three years until the next elections," he said. "During this period, we have the chance to pass a balanced 2007 budget and begin work today to review non-politicized projects for the 2008 and 2009 state budgets."

After three hours and 20 minutes of debate, the coalition government, along with 11 Our Ukraine deputies and eight Tymoshenko Bloc deputies, mustered 256 votes to approve the budget in its first reading.

A second reading and vote are scheduled for November 20.

After the session, Ms. Tymoshenko told reporters that the coalition government wanted to pass the budget as quickly as possible with minimal debate or discussion.

"In the conditions that people are living in, this is practically a budget of genocide in my opinion," she said.

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