In June, the Ministry of Finance of Ukraine officially introduced the text of the Budget resolution in 2018-2020. The document launches in the medium-term budget planning in the last few years the Ukrainian financial system had Affairs.
The document entitled “Basic directions of budgetary policy for 2018 to 2020” is the strategic document defining directions of public finances on priority reforms. And thereby will be laid the plan of development of the economy for the future and provide a basis for the system of deep reform.
The new Budget resolution calls for the strengthening of the approach in budget planning, top-down. That is, an estimate of the total resource and the priority policy areas with the necessary modifications, explain in the Ministry of Finance. In addition, among the innovations of the document — the overall spending limits and high spending limits for the main managers of budgetary funds for each year of the medium-term period. Also, the budget resolution allows for an earlier stage to involve Parliament in budget planning, and hence the quality of the document will be better able to avoid ill-considered decisions at the last moment, when, as we know it “appends to the knee.”
The budget resolution takes into account the strategic objectives of the Government until 2020. It is a tax and debt policy, the implementation of health care reform, pension and land reforms, ensure development of agriculture, stable funding for road infrastructure, providing support to defence and security, decentralization and further improve social standards.
The main figures in the document
What is the importance of the document
It provides for the transition from annual to three-year perspective budget planning. This is not just a technical change in budgeting by adding calculations in the two budget periods is a systematic change of fiscal policy, which should ensure a strategic approach to identifying priority activities and efficient allocation of resources.
Consistent and predictable budget policy that will ensure financial stability. Moreover, the predictability and efficiency of budget expenditures, aimed at improving the quality of public services.
Will increase budget discipline will set clear rules of the game, which will be followed by all participants of the budget process.
Medium-term budget planning is also control and effective management of public debt. Another is the ability to provide the necessary expenses for the implementation of the Medium-term Government action plan to 2020.
These figures are minimum salaries prescribed in the document
The following steps
The draft Budget resolution will be submitted for consideration of the Verkhovna Rada. The Finance Ministry expects “constructive and high-quality dialogue with the Parliament”.
Further, based on the adopted Budget resolution will be developed by the project budget.
I recommend everyone who is really interested in reforms and state policy, carefully read the entire document — this is not a formal paper, and the real plans for the budget policy of the state. If the Parliament will hold a full discussion of the resolution and will vote for her — built-in figures will be the basis for the state budget three years ahead, — commented on the publication of the document economist Paul Kuchta.
That is, in particular, in the document:
– Plans for the IMF program and debt policy, in particular, the problem of “peak debt” 2018-2019 (second half of the “General part”) – a detailed description of the macroeconomic forecast underlying the budget resolution; – plans tax policy for 2018-2020; * plans for managing the budget deficit and the expected size of the public debt; – a key fiscal policy indicators of the minimum wage, salary of the first wage category of the ETS and the subsistence minimum in the next three years; plans to implement the system management of fiscal risks; – basic parameters of the budget and ceilings for key spending units in a three-year perspective, with aggregation of the separate costs of the security sector and defense and investment expenditures.
The numbers of the subsistence minimum calculated in the resolution
Positives and comments on the Budget resolution in the broadcast of Ukrainian channels was voiced by the experts.
Expert for Finance and Economics Andrei Blinov: “Ukrainians, like the government, the budget resolution gives the understanding of where to move the state. It was very desirable then to have a budget resolution just three years. This document, the government explains how it predicts the growth of the economy, changing social standards. The only thing — unfortunately, indicators of spending on defense, education, medicine, etc., recorded in a billion, in absolute terms, not percentage of GDP or budget, it would be more honest”.
Political analyst Volodymyr Fesenko: “This is good for government and for the country as a whole. This is a step forward. But this is not new, it is not a fad, or someone else. It is quite a logical step and requirement of the budget code. But the document we have to work for it to work as an effective tool of public management. Regarding the three-year planning, that is such an important time, as government programs, for example — the construction of roads. And, the budget resolution gives the opportunity to see how much money is allocated”.