It is a proven fact that people’s deputies prefer, perhaps contrary to common sense, the 2003 budget revenues as proposed by the Verkhovna Rada Budget Committee rather than those proposed by the government. The deputies only partially approved the brand-new premier Viktor Yanukovych’s proposal to defer the second reading of Ukraine’s main financial document. To be more exact, they put off the discussion of budgetary expenditures until the third reading. The fact itself is not so much unexpected (logically enough, the new head of government chose to study in detail who, for what purpose, and in what amounts lays claim to government money) as it is controversial. The third reading is certain to be the climax of budget bargaining, and some sources close to the budget committee leadership are inclined to view the results in the context of governmental rotation. That the second reading vote applies only to revenues is simply a direct confirmation of this. It also confirms indirectly (but quite convincingly) that the more revenues the state gains, the happier are all those interested in the distribution of money. Still, nobody knows today how this will be done. Valery Konovaliuk, first deputy chair of the budgetary committee and one of the Party of the Regions leaders, commented quite frankly on this: current realities require a professional approach, while the coal-mining industry — a sore point — “needs radical reform.” So it is not ruled out that this and some other directions of “radical reform” will necessitate additional “radical financing.”
Conversely, voting on revenues alone, as proposed by the budgetary committee, was noteworthy: 272 deputies voted yes and only three votes were given for the governmental proposal. Therefore, if nothing changes before the third reading, state budget revenues will reach UAH 54.77 billion (UAH 41.42 billion as general stock and UAH 13.35 billion as special fund). What the government characterized earlier as a deficit budget thus becomes a surplus one, in which revenues will exceed expenditures by a total UAH 567.9 million. Let us not analyze again how these 54.77 billion hryvnias will be collected and at what expense the budget is planned to be raised by a net UAH 6.3 billion. Nevertheless, the committee’s decision announced by Petro Poroshenko — imposing a zero-rate VAT on imported natural gas sales, thus keeping up budget revenues and slowing down VAT arrears of the Naftohaz Ukrayiny Company — caused some comment.
Naming no names, Serhiy Teriokhin (an economist deputy who has never cast a vote for a draft budget) told The Day that our “economic Constitution” is usually drawn up taking into account all except financial considerations. Moreover, the assessments and reports of both governmental and parliamentary representatives contain, to put it mildly, enormous errors and even, to quote Deputy Teriokhin, “completely absurd.” For instance, according to him, while drafting the 2003 budget, the Cabinet of Ministers estimated the revenues simply and unprofessionally, that is, by taking into account the index of inflation and tax arrears. Mr. Teriokhin applied the term “crowd-pleasing” to the parliamentary version of the budget and “nightmarish” to the government one, for both of them “were drawn up in the interests of specific forces.” I wish this successful lobbyist of other economic laws had been mistaken at least about the time span (“at best, ten years later”) Ukraine needs for a professional and well-founded drafting of this kind of document.
