Budget: Child of Compromise?

The main one is whether the majority can keep in one piece and reconcile its “multivector” interests when passing the budget bill. How much can one regard the pro- presidential majority a pro-Cabinet one? Are the oligarchs really determined to torpedo Yushchenko’s budget, along with his Cabinet?

For many in Verkhovna Rada, however, there was little room for maneuver, primarily due to set time limits, considering the IMF mission’s scheduled arrival in February and the need to have the budget ready by then. On the other hand, the President is eager to see the budget in effect, the sooner the better (Parliament’s fate is habitually associated with that of the budget bill). In view of these circumstances, the budget committee has made every effort to reach a compromise with the Cabinet and has apparently succeeded. Addressing Parliament on February 10, Oleksandr Turchynov said the Finance Ministry and budget committee had agreed on practically the entire text of the bill, and called on lawmakers to approve revenue items totaling UAH 41.3 billion, along with a zero budget deficit. Also, his proposals on specific figures like the sums to be transferred to the regions failed, and only items without such indices still to be agreed upon were put to the vote. Considering that the vote was on each and every budget item, the majority had to have all of the factions’ votes to pass the bill. Of course, every faction tried to sell its own interests. And so they did. The Speaker was left with no room for maneuver, and the fractions mostly succeeded in backing their interests. In other words, the budget is becoming a compromise one. Deputy Viktor Suslov correctly noted, “Not all of the Cabinet’s proposals may wind up being voted on.”

Among the executive’s attainments in the parliamentary audience on February 10, one should mention suspending tax concessions to enterprises with foreign investment. The National Security and Defense Council at a recent sitting admitted that such exemptions are a threat to the nation’s economy, annually costing the budget some UAH 5 billion.

The lawmakers voted in a quite disciplined manner such that most budget items were approved in the second reading. “We avoided issues relating to specific figures, we did not approve regional subsidies, nor did we balance the budget or determine the amount we would receive by reducing certain categories of tax concessions,” said budget committee chairman Oleksandr Turchynov. It should be noted that several Communists attended the hearing, but they were content to posing questions to Finance Minister Ihor Mitiukov. Prior to the hearing, CPU leader Petro Symonenko declared that his faction will not take part in the budget vote. In other words, the Left is shifting responsibility for the complex 2000 budget on the parliamentary majority and the executive branch.