Last Thursday, despite the formation of the majority by a number of factions, the Verkhovna Rada voted down the Cabinet’s 2000 budget bill.
It was first rejected with a rather harsh formula: “Parliament considers it unacceptable.” Yet it received 153 ayes and 162 nays. To cancel a draft budget program one-third of Parliament’s constitutional membership would suffice. Half an hour later, it transpired that the legislature’s standing orders say a budget bill cannot be proclaimed unacceptable in the second reading, so the People’s Deputies decided to suspend it until a repeated second reading.
On his way out of Parliament, First Deputy Premier Yuri Yekhanurov told The Day, with obvious relief, “We have a budget, now we have to steer a middle course. At the second reading we’ll show the audience charts and diagrams, and I think we’ll make them see that we are right.” Cabinet Secretary Viktor Lysytsky hoped in principle that the Cabinet would convince the lawmakers even earlier. Although he stressed that the stated draft is “tough” and that many people used to living having access to the national purse are unlikely to take kindly to it. Mr. Lysytsky also predicted that many will not like the annulment of tax concessions and other privileges. Yet he believes that “the budget’s social orientation, along with support of the real sector of the economy, will unite lawmakers and prompt them to make a positive decision on the budget.”
As it was, the Solons failed to see precisely this positive aspect of the bill. A draft resolution submitted by Oleksandr Turchynov, Yevhen Zhovtiak, acting on behalf of the budget committee, and other Deputies, reads that “financing the expenses involved in the redemption of liabilities accumulated over the past [several] years is not secured, including wage arrears to workers of spending units [budget-sustained institutions], servicemen’s pay, stipends, and other social payments.”
They did notice something else. One of the biggest stumbling blocks was the central-regional budget ratio. The Cabinet proposes record centralization of state funds in Kyiv. Speaker Tkachenko claims the government violated the central-local budget ratio implied by the budget resolution (59% and 41% respectively), proposing 75% for the center. This is not likely to meet with understanding from regional officials (meaning they will no longer be able to use local budgets the way they did previously). On the other hand, centralizing the state budget is fraught with danger; it may well be used by a certain interest group for its own purpose.
