Nobody had seen the actual document, because for technical reasons alone there was no time to prepare it after the vote for the budgetary and tax codes just hours earlier. And it looks like button-pushing (the practice of voting for several colleagues) has come back to the Rada with the help of People’s Front, Arseniy Yatsenyuk’s faction.
As a result, the new parliament turned the procedure for approval of the new financial document of the year into “budget pushing.” And they pushed it through.
The 2015 budget could not have been good. Firstly, because it was assembled out of a mass of the available elements. The budget deficit is the highest in the past decade (not just the figure reflected in the relevant section, but the stuff that’s hidden in the budget of Naftogaz, for example), according to Viktor Pynzenyk, who is an authoritative figure in Petro Poroshenko’s Bloc.
Secondly, because the country needs money for defense and security. And in this year we hiked these expenses to an unprecedented level. Which is justified.
And thirdly, our most important task is to launch the liberal reforms, which basically mean rolling up state paternalism that continues to be the main expectation of Ukrainians.
We have to admit that the main problem for our economy is not the anti-terrorist operation, but the old schemes that exist to this day. On Dec. 29 we approved the budget after reaching many compromises as we strived to balance this document.
In other words, we generally agreed who we will take money from next year, and who we will reallocate it to. But we have certainly failed to solve the main problem of the 2015 budget, 2015 economy and 2015 Ukraine, which is corruption in the general prosecutor’s office, police and tax inspection. Which is contraband. Which is money-laundering platforms. Which is offshores. We have also failed to publicly formulate the strategy on how to turn the oligarchs into big, and honest, business.
One of the chapters in the budgetary process deserves special attention – it’s the hike of taxation for oil and gas extraction for our oligarchs. The leadership of the tax committee did not even try to hide its open lobbying effort for low rent on energy extraction. The shorthand record of the meeting of tax committee and protocol of the vote will give answers to many questions journalists are asking. But in the end, lobbyism failed. That’s because our Rada is a post-Maidan one.
The budgetary process should have answered one question, whether the economy will be re-launched and whether the Ukrainian small and medium business can become a reliable driver of the car that’s not going very well.
This is why the government has reduced the single social tax (to 16 percent for those companies which were in the shadow and are ready to get back to the light), introduced VAT accounts (which will work in test mode as of Feb. 1), 5 to 10 percent import duty, declared the reduction in number of taxes from 22 to 9, reduced the tax rates, and banned inspections of business for two years. Now we have to see whether these measures will work.
Personally, I could not vote for this budget, like 70 other deputies who signed the coalition agreement. This is not a demarche, as some people are trying to interpret. This is a sober and public evaluation of the quality of parliamentary work, which we’re creating with our own hands. I would like to vote and share responsibility between our government and coalition. But this was the moment when you realize that we will either continue the practice of breaking everyone’s will over the knee, or we will try to break this knee.
One of the key roles in yesterday’s vote was played by Speaker Volodymyr Hroysman. But his game was nothing like chess, more like a game of cards. Winners and losers of the new 2015 budget will soon be clear.
Svitlana Zalishchuk is a deputy from Petro Poroshenko’s Bloc. The Russian-language version of this op-ed was published by Novoye Vremya, a news site.