Minister of Finance Ihor Mitiukov confirmed on September 5 that if no new foreign loans arrive in Ukraine, his ministry will suggest that the government sequester expenditures provided for in the 2000 budget. He noted, Interfax- Ukraine reports, that the results of budget performance in September will show if sequestering is necessary.
Mr. Mitiukov stressed that what determines the necessity of a state budget sequester is not the general fund revenues but absence of foreign loans, for these loans are a constituent part of overall budgetary expenditures. In this connection he stated, “Budget plans envisioned that we would receive UAH 1.8 billion in foreign loans before the end of September. So far there are none.”
On the other hand, the finance minister reported a “small delay” worth “several hundred million hryvnias” in the planned budget revenues. Mr. Mitiukov also said that his ministry had suggested that other ministries and agencies prepare measures to reduce their expenditures before the end of this year in case no foreign loans are received.
The minister reported that in the first eight months of 2000, the budget had been positively balanced because there was “no foreign credit.” As reported earlier, the International Monetary Fund suspended EFF loans to Ukraine in September 1999. Ukraine hopes credit will be resumed in October.
That same day, First Vice Premier Yuri Yekhanurov told journalists that the Cabinet of Ministers had requested that Verkhovna Rada extend the validity of six additional Pension Fund duties “for at least one more year.”
In his view, this should be done in order to raise pensions. Simultaneously, he confirmed that under the laws in force these duties should be levied until back pensions have been paid (it will be recalled that the government repeatedly announced it would pay all pension arrears by September 15).
At present, six additional Pension Fund duties are being levied in Ukraine: 1% of hard currency purchase transactions, 5% of the value of the sold gold, platinum, and precious-stone items, 3% of the value of cars sold, 5% of the value of domestic or imported tobacco items, 1% of the value of real estate bought, and 6% of cellular phone communications.
Some time before, the Pustovoitenko Cabinet was bitterly criticized for the non-market nature of these innovations, although it was obvious that such actions proceed from the “nature” of the former government and its head. Only diehard pessimists could expect the new Yushchenko Cabinet, extolled as reform and market-oriented, would continue Pustovoitenko’s old practice of raising budget revenue. Yet, as early as October 1, a Cabinet resolution that bans using uninsured means of transportation come into effect. Everything seemed all right at first glance, as if it were in the civilized West. But: a) what is in fact everyone’s personal business has been made a compulsory thing, of which — I hope I am mistaken, of course — supervisory bodies will, first of all, take advantage; and b) the government must not forget that thanks to many efforts including its own, far from every driver in Ukraine can painlessly put out 5.8 untaxed minimal individual incomes for the annual insurance of a car with a 1200-2000 cc. engine. Since our citizens and organizations already have enough cars, you cannot help but think that the latest innovations are aimed at robbing the people in order to bail out the budget.
