Unrealizable Declaration And Tax on An 18-Hryvnia Wage
On October 2 the Verkhovna Rada Committee on Social Policy and Labor considered the draft 2002 budget, declared by the government as socially-targeted one.
Praising the progressive nature of the new budget, Minister of Labor and Social Policy Ivan Sakhan said the proposed increase of a minimum salary to UAH 140 (UAH 118 currently —Ed.) and minimum subsistence level to UAH 80 (UAH 50 at present — Ed.) is a considerable step forward. “But wages in excess of UAH 18 will continue to be taxed,” he said. There will be no more increases in the minimum salary and subsistence level sizes, the minister confirmed, as there are no financial sources to replenish the Wage Fund.
Speaking about the 2002 budget social programs, Mr. Sakhan listed all the projected benefits to invalids, low-income groups, and pensioners. Incidentally, to rationalize the use of budget funds, the government will revise existing pensions, ranging at present from 2-3000 to 56 hryvnias. To put all pensioners on an equal footing, the minister maintained, the draft budget will impose ceilings for pensions paid to working pensioners, presumably, to secure “the social approach.”
Despite such soothing declarations, the draft drew fire from the representatives of ministries and committees. According to the State Secretary for the Health Ministry Serhiy Shevchuk, of utmost necessity is to buy at least the minimum of the required equipment for rural hospitals for which UAH 171 million is needed, and to modernize the sector’s fleet of vehicles, currently 75% worn out. In addition, more money should be allocated for the treatment of cancer patients, he continued, since funding shortfalls and lack of medications in hospitals render such treatment ineffective. Responding, Finance Minister Ihor Mitiukov said the health sector budget will be funded according to the already approved programs. There are twelve such programs, which, as it later turned out, requiring considerable state support. Meanwhile, the government has allocated a mere 46 million hryvnias to fight the oncoming epidemic of tuberculosis, now officially recognized and needing 300 million hryvnias. Moreover, the law On Protecting Childhood comes into force on January 1, 2002, something the budget creators seem to have totally ignored.
The new budget will actually annul all transportation benefits to war veterans, invalids, and incapacitated Chornobyl relief workers, as the decision on whether to retain or cancel the benefits will now rest with local governments. Thus, if examined scrupulously, the budget’s manifested goals cannot meet the requirements of the social sphere and ensure the implementation of priority tasks of official policy. Yet more proof of this is the budget’s quantitative indicators, with projected expenditures up by 5.7%, the GDP to grow by 6%, and the inflation to reach 11%. As a result, the expenditure earmarked for social protection will actually drop.
