President of Ukraine Victor Yushchenko noted a number of key positions, which were taken into account by the government during the working out of the state budget for 2007, press office of the president reported.

First of all, he noted that taxes issues were excluded from the budget bill and registered as separate draft bills, as it is provided by the national legislation. “For the first time we demonstrate that tax legislation is stable in our country and is not subjected to budget influence,” Yushchenko said.

Issues concerning privatization process were also registered as separate draft bills. The President appreciated that at his urgent request a number of investment attractive objects like Ukrtelecom and Odesa port plant were included into privatization list of the year 2007.

The discussion concerning renewal of free economic zones has been finished, the President noted. According to him, Ukraine needs free economic zones, but the practice of the year 2005 witnessed that a lot of shady schemes were passed through these zones. “We must make conclusion and improve the legislation on this case,” Yushchenko underscored. The Verkhovna Rada will pass individual law on each economic zone. “This is right decision, which gives a possibility to make effective monitoring,” Yushchenko said and added that it will promote development of competitive struggle.   

The draft state budget bill provides for considerable increase of financing juridical system by more than 80 mln UAH. 423 mln UAH were allocated for priority national spheres, such as space studies and aviation. Financial support of industry makes 274 mln UAH. The agricultural complex will receive the most means for the years of Ukraine’s independence. Subventions for local budgets have been increased by 6.4 milliard UAH. Speaking about support of small and middle business, the President said that about 27 mln UAH were allocated for compensational programs.

Moreover, budget draft foresees funds for acquisition of Gamma-knife, construction of ice castles in Kyiv, Lviv, Kharkov and Donetsk, completion of construction of exhibition centre in Kyiv, memorial complex construction that will immortalize the memory of Holodomor’s victims 1932-33 and other social and humanitarian projects.

“Thus, I want to emphasize that huge work, carried out by experts of Government and President’s Secretariat, has given positive results,” the President said.

The Head of the State has also paid attention to the urgent question concerning social tendencies in budget project, in particular minimum and living wages.

The President reminded that starting from 2005 the most social welfare was staked on invalids and pensioners. In 2005 minimum wage increased by 40%, in 2006 – by 20%, and budget draft bill for 2007 provides for only 12.5% increase. Yushchenko noted that taking into account the same level of expected inflation (about 11%) there will be no real growth of wages. Such approach considerably reduces possibilities of the domestic market, according to the President. Yushchenko noted that “a consumer is a key investor of any economy.”

Another flaw of the draft budget bill is inadequate calculation of living wage. Yushchenko reminded that in 2005 minimum pension became equal to living wage for the first time. “It was a great achievement and I worry that this proportion is hit by the draft budget bill for 2007.  

“I want to bring to government’s attention that officials who work out the draft bill must take this position into account before the third reading of the bill,” the President said.

The Head of the State emphasized that he will not sign the budget for 2007, if the marked points concerning minimum living wage and its total calculations with the pensioners and other social categories are not considered.

Yushchenko expressed a hope that to the final reading all necessary amendments would be introduced in draft bill and the budget would be submitted and signed by the President.


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