Semenukha: “The government has no strategy of repaying debts, except through new borrowing”

The draft state budget for 2019 prepared by the government, which will be considered by the Verkhovna Rada during the next plenary week, raises many questions.

MP Roman Semenukha notes that, for some unknown reasons, an unreasonable and contradictory income of 17 billion from privatization is expected in the revenue side of the budget.

The parliamentarian argues, “Throughout years, the governments of both Yatsenyuk and Hroisman presented the figure of 17 billion hryvnias; this year the figure is around 22 billion hryvnias. This year, as of August, the implementation of the state budget in terms of privatization was less than 50 million hryvnias. Therefore, there are huge doubts that the revenue part of the state budget is realistic.”

Secondly, the fact the government suggests increasing the percentage of expenditures less than the percentage of revenues raises questions. Does this mean that the government is going to make adjustments to the financial plan of the country during the year of double elections? Why does the government intend to increase the state budget deficit precisely in this difficult 2019?

Thirdly, the budget provides for the increase of the Pension Fund deficit from 139 billion hryvnias to 166.5. And this is despite the fact that one of the key tasks of the so-called pension reform was to stabilize the Pension Fund deficit at around 139 billion hryvnias. This is also the responsibility of the Ukrainian government towards the International Monetary Fund.

In addition, the social policy, in particular in relation to subsidies, is not clear. The lawmaker says that this year, 71 billion hryvnias were allocated for this article, but the next year, only 55 billion hryvnias are provided. Roman Semenukha is convinced: “The expenditures on subsidies are calculated on the basis of the current gas prices. This means that subsidies cannot be reduced at all, they should at least remain at the same level.”

“It is also extremely important to note that about 417 billion hryvnias are envisaged for servicing public debts, both internal and external. And the government’s strategy is also incomprehensible here, unfortunately. After all, we haven’t heard any other clear strategy from the government of Ukraine, except for the one of paying off the debts by means of new borrowing,” concludes the parliamentarian.

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