The Verkhovna Rada Budget Committee, headed by Yuliya Tymoshenko before her vice premiership, currently under Oleksandr Turchynov, also of the Batkivshchyna faction, submitted a draft resolution on September 20 terming the Cabinet’s performance in implementing the law On the State Budget of Ukraine for the Year 1999 unsatisfactory, and turning down the Cabinet’s progress report. Moreover, the draft “proposes” the General Prosecutor’s Office study the findings submitted by the Accounting Chamber before December 1, 2000, and, in case any breaches of the law are detected, bring those responsible to account.
Such a radical approach could not help but give rise to a host of questions. One was answered by Mr. Turchynov that same day. The previous Cabinet is responsible for the implementation of the 1999 budget (headed by NDP leader Valery Pustovoitenko, with the party’s fraction now being part of the parliamentary majority). Most importantly, he stressed, the current government must learn that lesson, so previous mistakes are not repeated. A bit hard to believe, considering that the President publicly scolded the Premier several days ago, saying that “replacing the Minister of Finance while preparing and adopting the budget program means casting the budget process to the wind.” Also, the budget progress report was delivered in Parliament by none other than Finance Minister Ihor Mitiukov (who had occupied the same post in the previous Cabinet). Another thing making one wonder is that Mr. Turchynov, while invoking the General Prosecutor’s Office, declared that the proposal to hand the documents over it was a “minor issue.”
Naturally, the government must report on budget implementation and assume full responsibility. It is true that there is little one can write home about concerning how this number one financial document was translated into life, and Minister Mitiukov admitted as much from the parliamentary podium. The list of attainments is short: an industrial output increment of 4.3% over 1998; book-value returns of enterprises rose from 3.4 to 7.4 billion hryvnias. As for failures, the list turned out considerably longer and more to the point. “In 1999, the state budget actually received UAH 19,980,000,000, which was 84% of that planned. The state budget did not receive about UAH 4 billion and the consolidated budget UAH 1.37 billion. Tax payment shortages came to UAH 2 billion. Total budget expense financing was 13% under what was planned,” Mr. Mitiukov declared, adding that the reason is the initial overstatement of the budget revenue items, inability to mobilize funds [only 17 out of 43 planned finance sources proved effective — Ed.], along with offset practices.
Disheartening as it was, the picture drawn by the Finance Minister became even worse as Accounting Chamber head Valentyn Symonenko took the floor. He began by “amending” some of the statistics provided by the Finance Ministry. Thus, he stated that budget deficit in 1999 was not two billion but most likely about 8 billion hryvnias. “The difference in changing the accounts receivable and accounts due to customers of the spending units (UAH 2.5 billion) means that same state budget deficit. VAT payments still to be returned business entities (UAH 3.3 billion) must also be referred to the budget liabilities,” Mr. Symonenko said, adding that the total amount allocated for repaying and servicing the public debt in 1999 was 64% of all budget revenue, which is twice the amount stated by the Finance Ministry.
“The main reason for failing to implement the 1999 budget program consists in the irresponsibility and impunity of all those responsible for its implementation,” Mr. Symonenko believes. He told Parliament that not a single Cabinet budget progress report had been approved by Verkhovna Rada since 1994, yet there have been no legal consequences whatever. “Budget problems that have been repeating themselves every year are explained primarily by the lack of fiscal discipline and responsibility for the allocation of budget funds and their use for purposes other than those intended,” stressed the head of the Accounting Chamber.
Lawmaker Oleksandr Riabchenko described the budget as a game: “The government composes the budget program until the night before the reporting date and then Verkhovna Rada deliberates it on a priority basis for two months. And all the while everybody knows that no one will even try to implement the budget the way it is stated after enactment. And the final act is that the budget progress report is delivered by a Cabinet other than that actually responsible for its implementation. It is so easy, because no one knows who should be brought to account.”
“The People’s Deputies are very busy getting ready for verbal battles. We will deal with the 2001 draft budget program very thoroughly. Even now one could single out certain disputable aspects,” The Day was told by Kateryna Vashchuk of the Rebirth of the Regions fraction.
Viktor Pynzenyk (Reforms & Order) says the draft budget’s social items may well trigger off Parliament-Cabinet hostilities: “It stands to normal human logic that social payments and subsidies in the housing-municipal sector must be treated as priorities. Now we have every reason to discuss pay rises for certain spending unit categories. But I would not want such pay rises to be effected by accumulating debts in other sectors.” He also fears that political games might become a serious obstacle in dealing with the budget bill. They could actually change the essence of the document, considering what happened on September 20.
