Thursday, 27 December 2012

Government Denies Budget Tampering Charge

KIEV, Ukraine -- A senior government official dismissed allegations from opposition groups that the 2013 budget had been illegally tampered with and changed before it was signed by President Viktor Yanukovych. The opposition groups charged the government had increased spending on police by 1 billion hryvnias ($0.12 billion) next year among other changes after the budget had been approved by Parliament. But Serhiy Tyhypko, an acting deputy prime minister in charge of social policy, dismissed the allegations and defended the budget, suggesting the issue may continue to dominate upcoming sessions of Parliament. “As for changes to the budget, I think that this can not be that it has been approved by Parliament in one edit to be later changed at the presidential administration and signed by the president,” Tyhypko said. “I think whatever was submitted by Parliament, was signed by the president.” Tyhypko, who was elected to Parliament at the October 28 elections, has made it clear that he will not stay in the government and will rather join Parliament. Arseniy Yatseniuk, the leader of the opposition Batkivshchyna party, charged on Thursday that main parameters of the 2013 budget – including budget deficit - were changed after it was approved by Parliament and before it was signed by Yanukovych. The budget was approved without debate by the outgoing Parliament at its last-day session on December 6 and was signed into law by Yanukovych on December 17. The budget deficit increased by 100 million hryvnias ($12.4 million) to 50.5 billion hryvnias ($6.3 billion) in from 50.4 billion hryvnias before Yanukovych had signed the bill, Yatseniuk said. Other major changes include increasing spending on police by 1 billion hryvnias ($0.12 billion), a measure that Yatseniuk said was a sign the government was protecting itself from the people. Other major winners of the alleged tampering are the Cabinet of Ministers, which increased spending on itself by 60 million hryvnias ($7.4 million), or by more than 20%, to 334.5 million hryvnias ($41.5 million), Yatseniuk said. Yatseniuk said the increases in spending came after social programs had been reduced or eliminated. For example, the Social Policy Ministry’s budget was cut by 20 million hryvnias, while hospitals handling rehabilitation of cerebral palsy patients had their budget reduced by 7 million hryvnias ($0.9 million). Spending on water supply infrastructure across Ukraine was reduced by 160 million hryvnias ($20 million) in 2013, Yatseniuk said. Tyhypko defended the social spending and said it was adjusted to the worsening economic environment. “The social budget was not reduced, but the rate of increase in wages for the public sector has slowed down,” Tyhypko said. “The budget is difficult.” “The situation in the economy is very strained,” Tyhypko said. “We are not talking about it, but the situation is simply crisis-like.” Ukraine’s projected budget deficit at 3.2% of the gross domestic product – twice as much as in 2012 - is one of the main macroeconomic problems to be faced by the government next year, according to analysts said. Other concerns include overly optimistic economic growth forecast of 3.4% on the year in 2013, which may de-facto further widen budget deficit if the government collects less in budget revenue, analysts said.

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