Prime Minister of Ukraine Volodymyr Groysman during an extraordinary Cabinet’s meeting dedicated to considering the draft Law on the State Budget on Thursday unveiled the main macroeconomic indicators of the budget for 2017.
So, the Government envisages a budget increase in 2017 up to nearly UAH 876 billion which is more against the 2016 showing by 16.9 percent.
In addition, the Government forecasts GDP growth rate of 3%.
"We expect recovery of the economy. We see that our economy is starting up, and our task is to make this process irreversible and to accelerate economic boost. as a result of this process we should do our utmost to ensure every Ukrainian citizen to feel that life is changing in his/her income, salary, and it is an important priority line", said Volodymyr Groysman.
The structure of earnings remains standard. The Government does not envisage an increase in the total budget revenues at the account of higher tax rates.
"We believe that we should avoid creating conditions for squeeze on business, and therefore we will not support raising national contributions. It is possible to expand the base, to determine a stance regarding rents, but as for the national taxes, we won’t stand for their increase", said the Head of Government.
The budget deficit for 2017 shall not exceed 3%, and makes up UAH 77.5 billion.
The Government envisages improvement of social standards. In 2017 the Government lays an increase in the draft budget by 10.1% - as of December 1, 2017, the minimum wage and the living wage will be UAH 1762, compared to UAH 1600 as of 1 December 2016.
The Prime Minister reminded that in 2016 the Government had managed to raise the standards by 5% from May 1, and from December 1, these figures grew by 10%.
"It's not sufficient, but this is a step that we could do, and it meets the demands of our economy. It is vital to ensure we take into account real economic growth," he said.
"The goal of our Government is to generate economic boost. Economic growth will accumulate resources to be directed to improvement of welfare standards and improvement of living standards, as well as modernization of our country. It is time for an efficient and professional approach to the formation of the budget of the country", stressed the Head of Government.
He also added that the Government is engaged in elaboration of proposals to reform the pension system and the remuneration system in Ukraine, and will present it shortly.
Speaking about the top priorities fixed by the Government in the draft 2017 Budget, Volodymyr Groysman named, in particular, the national defense and security, reconstruction and overhaul of roads, preserving of decentralization, the introduction of large-scale energy efficiency measures, support of the agricultural sector and education.
Defense and security of the state for 2017. The total budget intended for this sector in 2016 – UAH 114 billion, in 2017, the budget spending will be by UAH 14.5 billion more amounting to UAH 129 billion.
The distribution of finance was agreed at the Council of National Security and Defence, he said. So, the expenses planned for monetary security of the military grow by UAH 8.4 billion.
"The Ukrainian army must become a real army, with proper maintenance, monetary assistance, provided with advanced weapons. Therefore, our task is to invest in our security," stressed the Prime Minister.
Roads. Budget expenditures are planned at the level of UAH 14.2 billion from excise tax to the Road Fund that is to be set up as a tool for effective road management in the country. Up to US $ 1 billion is the sum expected to raise from international financial institutions.
"We must draft a strategy of Ukrainian road development. We should stop building roads that lead nowhere, we need roads that are necessary for the Ukrainian citizens, Ukrainian economy and for promoting of our transit and logistics potential", urged the Prime Minister.
Energy efficiency. The Government proposes to attract UAH 800 million of budget funds and about EUR 100 million from international donors to create an Energy Efficiency Fund. "In fact, we can count on UAH 3.5 - 4 billion to be directed to the Energy Efficiency Fund, as an open tool of use of resources to ensure implementation of energy efficiency measures, noted Volodymyr Groysman.
He stressed that the Government had set an ambitious goal of restoring national gas production, thereby enhancing energy security and competitiveness in foreign markets. Hence, throughout 4-5 years Ukraine will become a completely energy independent country.
Support for agrarian industry. The Government has plans to budget UAH 5.5 billion to support agricultural producers, for example, for the modernization, purchase of machinery, Ukrainian tractors and trailed equipment to improve productivity and competitiveness of agrarians, announced the Prime Minister.
“We must take care of small and medium-sized farms providing them with opportunities to produce more products, to do processing, to generate and utilize technologies”, he accentuated.
Decentralization. Volodymyr Groysman noted: “Our position is as follows, and, basically, that’s why I came to the central government - to launch decentralization so that each Ukrainian community could get sufficient financial resource, sufficient opportunities and full responsibility for the state of affairs in their locations", said the Head of Government.
Now we need to reinforce the responsibility of local authorities, in particular in energy efficiency sector. The Government considers it necessary to devolve authorities for maintenance of the housing and communal services domain, including educational institutions and healthcare facilities. The sum worth UAH 15 billion is envisaged in the budget "for those communities that need assistance here."
A size of state support in the framework of the State Regional Development Fund is to be raised up to UAH 9 billion, at that, UAH 1 billion out of this amount will be spent to support the united territorial communities and UAH 8 billion - on the socio-economic development of territories.
Here are three important tools aimed to become a real investment in the development of the local economy", said Volodymyr Groysman.
A reform of coal industry. There is planned UAH 1.8 billion along two lines of expenditure, not just one as before: the restructuring of mines and support for miners. The Head of Government accentuated that retrofitting of the industry would raise competitiveness of it in the coal market.
Education. The Government intends to raise education funding by UAH 21.1 billion.
Moreover, the salary of teachers in secondary schools will up by an average of over UAH 1400.
The total expenditure on scholarships is to increase by UAH 576 million: UAH 5.816 billion in 2017 against UAH 5.24 billion in 2016.
Healthcare. The government plans to increase the funding by UAH 8.2 billion in comparison with indicators of 2016.
The Prime Minister pledged the Government would ensure the supply of drugs. In this context, the Government offers to allot UAH 5.9 billion for the centralized procurement of medicines through international organizations and to apply for a Global Fund resource, enabling the country to approach close to 100%-implementation of programmes for the procurement of medicines for Ukrainians."
In addition, an average growth of 20% in salaries of health workers was planned in the draft budget.
Culture. In the draft budget the Government provided for the increase in spending by UAH 1 billion.
The sum worth UAH 500 million is intended for the development of film industry in Ukraine.
A separate line amount was planned for the gearing up and hosting of the Eurovision Song Contest.
"We will do everything we should and next year our unique opportunity to present the country at such a difficult time will be demonstrated and high organizational level of the contest ensured", said Volodymyr Groysman.
There are also included funds for repair and restoration activities in National Historical Memorial Preserve "Babyn Yar", the arrangement of the National memorial complex to the Heroes of the Heavenly Hundred in the Museum of the Revolution of Dignity, as well as the construction of the second phase of the National Museum “The Memorial in Commemoration of Famines' Victims".
Enhance image of Ukraine abroad. The Government provides in 2017 by UAH 1 billion to raise funding for the diplomatic missions.
Apart from the frontline of struggle against the Russian aggressor, Ukraine has another frontline - Ukrainian diplomacy who should feel government support. We should improve the performance of our diplomatic service, as the frontline is where Ukraine’s interests in the global world are defended", summed up the Prime Minister.
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