Pre-election budget: real money for the law enforcement and peanuts for pensioners

Either the growing budget deficit, the huge public debt, or the decrease in revenues this year – nothing can teach this government a lesson. The draft budget for the next year is even more focused on building a police state at the expense of ordinary citizens.

A brief analysis of the main indicators makes us draw several conclusions.

  1. Ministry of Internal Affairs. An unprecedentedly large amount of money is laid down in the budget-2018 – 65.9 billion hryvnias. Despite the fact that this amount has been the largest in the history of Ukraine, in 2019, the government plans to break this record by adding 25% more and providing the structure with 82.3 billion hryvnias.

The financing of the National Police is increased by 5 billion, the National Guard – by almost 1.5. It’s no secret that the units of the National Guard, which protect government quarter, are better equipped than our servicemen who are defending the state at the front line. And next year, when there will be a pre-election fever all over the country, the authorities will probably need a trained and well-equipped army to secure their own re-election.

  1. Prosecutor’s General Office. The expenses for the Prosecutor General’s Office will grow by 6%. In recent years, the Prime Minister and the President have talked about the reform of the Prosecutor’s General Office, a significant reduction in its functions and their further transfer to other bodies (in particular, the State Investigation Bureau). Then the question is – why increase financing in this case? To motivate prosecutors to better implement instructions from above?
  2. Security Service. Financing of the Security Service has increased by 24% in comparison with the previous year (9.4 billion UAH against the current 7.6). During the war, the Security Service’s functions are no less important than the activities of the Armed Forces. However, the real activity of the Security Service is far from its priority tasks. Today, the Security Service continues exercising pressure on business, although the Service should have been deprived of this function long time ago.

This is not a complete list of the articles that demonstrate the increased funding for the creation of a police state. And what do we have in the social sector?

  1. Subsidies will decrease. This year’s government decree No. 329 of April 27, 2018 tightened the rules for obtaining subsidies for citizens. Before that, officials had announced their intention to reduce the number of subsidy receivers by 20% by the end of 2018, and in 2019 to reduce funding from 71 to 55 billion UAH. Thus, fewer and fewer people will be receiving subsidies, and this is against the background of the necessary step to increase the gas prices. Subsidies are getting smaller, tariffs are not transparent, there is no monetization. This is a verdict for poor and socially unprotected citizens.
  2. Loans for youth housing. One of the top topic among officials today is labour migration and programs of how to overcome it. And here we have a very interesting article of expenses called “partial compensation of the interest rate of commercial banks’ loans to young families and single young citizens for the construction and acquisition of housing”, for which “as much as” 27 million hryvnias are provided. For this money, inly about 25 apartments in Kyiv can be bought, while we are talking about providing all the youth of the country with housing.
  3. Housing for servicemen of the Armed Forces. In Ukraine, unlike in the leading countries of the world where the state respects the soldier, Soviet values are cultivated. Generals are more important than soldiers. Thus, little money is allocated for the social protection of our soldiers in the budget. Hence, for the purchase of apartments for servicemen of the Armed Forces in 2019 lesser money will be spent than this year (839 million hryvnias against the current 857).

And the main conclusion concerns the least protected category of Ukrainians – the pensioners. It has been a year since the so-called pension reform of the Hroisman government, and the government keeps talking about the improvements in the budget of the Pension Fund. Officials have reported on a gradual reduction in the Pension Fund deficit and of the fact that the revenues from the unified social tax are breaking all records. All these statements hold no water when we see that in the budget-2019, 166.5 billion hryvnias are provided for the Pension Fund deficit.

However, the authorities are not ready to recognize and correct their mistakes in the pre-election year, so in the near future we will hear their populist statements that the increase in the deficit of Pension Fund is very good. Even though this will make the authorities once again increase pensions a little to try and bribe the pensioners.

But this increase will almost immediately be leveled by inflation, loss of the right to subsidies and higher tariffs for utility services.

What else do we see in the budget? Looks like the elections stimulate the authorities to prepare surprises on almost every page of the country’s financial plan for the next year.

Roman Semenuha
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