Verkhovna Rada OKs 1998 budget thanks to cooperation with Cabinet (01/04/98)

Verkhovna Rada OKs 1998 budget thanks to cooperation with Cabinet

by Roman Woronowycz
Kyiv Press Bureau

KYIV - Ukraine's Verkhovna Rada endorsed the national budget for 1998 on December 30, 1997, dodging any possibility that once again a budget would not be in place as the fiscal year began.

By voting for the budget, 240 to 45, the legislature avoided a repeat of 1997, when it could not approve a 1997 budget until the middle of the fiscal year, which made it necessary to institute emergency budgets based on expenditures from the previous year beginning on January 1.

The big difference this year was that the Verkhovna Rada and the Cabinet of Ministers worked together and not against each other. The Verkhovna Rada budget committee, headed by National Deputy Volodymyr Pustovoitovskyi, a member of the Communist faction, met with representatives of the Cabinet of Ministers, including Vice Prime Minister Serhii Tyhypko, Finance Minister Ihor Mitiukov and Minister of the Economy Viktor Suslov, after each reading of the budget to iron out differences and address issues raised by the national deputies during their plenary sessions.

In the third and final reading, the budget smoothly flew through Parliament. When issues could not be resolved, such as a desire by the Cabinet of Ministers, for approval of a bill to revamp the corporate tax structure, an issue left over from the great budget debacle of 1997, they temporarily shelved it. That bill and several others will be looked at in the several sessions that are still left before this Verkhovna Rada completes its work and prepares for elections.

The 1998 budget authorizes outlays of 21.1 billion hrv against revenues of 24.5 billion hrv. The deficit of 3.4 billion hrv comes to 3.3 percent of the GDP, which is close to the guidelines that the International Monetary Fund requires that Ukraine meet in order to receive additional IMF financial support.

Ukraine is counting on foreign sources of borrowing to the tune of 2.3 billion hrv, much of it promised IMF money, to help defray some of the deficit. The other 1.1 billion hrv will be covered by internal sources of borrowing.

For the first time the Verkhovna Rada voted to include in the budget a list of items that must be maintained as expenditure priorities, including wage payments to government workers, purchases of adequate food supplies, medicine purchases and servicing interest on the national debt.