As a result, starting April 1, 2005, Ukrainian pensioners will be receiving a minimum of 332 hryvnias in pensions and will be compensated the difference between 332 and 294 hryvnias for January, February and March.

All mothers will be paid 3, 384 hryvnias, or nine times the minimum wages, at childbirth and 5113.60 hryvnias more (13.6 minimum wages) in the next 12 months. Disabled people of the first group will be paid an additional 406 hryvnias. The allowance for children aged up to six years in custody will be 362 hrvnias, and for children aged between six and eighteen, 460 hryvnias. (The allowance will be once again increased on October 1).

Minimum wages will be significantly increased each quarter: up to 290 hryvnias per month from April 1, 310 hryvnias from July 1, 332 hryvnias from September 1. Experts, however, have already calculated that to provide for such a large-scale increase local budgets lack 2.173 billion hryvnias. At the same time, at the local level, the salary ratio in the expenses section makes up 82% of the average as compared to 73% in previous year and the standard of up to 60%. That is why there will be a complete degradation with no money for repairs, construction or procurement.

Naturally, it is impossible to break pre-election promises. This is a cross that Tymoshenko’s Cabinet will have to bear.

The revised budget gives priority to increased social expenditures, which, however, are to be covered not only at the cost of shadow costs.

The allotments to capital construction have been drastically cut back. While the Kyiv - Odessa highway “survived” this cut, the construction of a bridge in Zaporizhzhia is said to be without funding.

The new budget sweeps away breaks for VAT, income tax, excise-duty, payment for land and tax breaks for the free trade zones and several industries (shipbuilding, automobile construction, production of armored equipment). The prices of licenses for production of alcohol and tobacco have been increased from five to sixty-two and a half times; there has been a twofold increase in the price for an annual license for tobacco importation and a fivefold increase for the cost of wholesale trade in alcohol and tobacco.

Superficially, the Cabinet has shown wisdom and understanding, having re-established privileges for payers of single and fixed taxes. They will not have to pay 84 hryvnias to the Pension Fund, although their employees will still be unable to earn pensions. But the amendments to the law on the tax on personal incomes provides that payers of single or fixed taxes who provide services to another person for more than one month are regarded as hired employees, and must pay tax on their salary.

But it is unclear what tax will they have to pay: the single or fixed tax, the amount of which is set by local government, or the 13% income tax, or both? Can a person paying the single tax return to the general taxation system? Now they can’t, since they will have to pay significant amounts to the salary fund. So to minimize this, part of their salaries will be brought back into the shadow. Did the Cabinet do anything to ease this social burden? No, it did not. Moreover, it increased the employer’s payments to the Pension Fund by 0.3%. It explains this move as following: the total amount of charges to the salary fund will remain the same - a little over 38%, whereas the increase in pension charges will be compensated with a 0.3% decrease in charges for an unemployment fund.

This is only a temporary measure, says the Minister of Labor and Social Policy, Viacheslav Kirilenko. However, we believe that the very fact of such a decision testifies to a lack of strategic vision by the government and its neglect of the country’s image. Experts say that in 2005, Ukraine may become the only country which dared to take such an odious step as to increase pension charges.

The wave of the Orange Revolution has turned the budget from the main financial estimate into a major political document. This means that everybody who is against it is against higher salaries, pensions, stipends and other payments. Nobody wants to be the “enemy”. How the country will make two ends meet is the problem of the Cabinet, and the deputies should probably take its proposals on trust.

We counted about twenty references to various rules and resolutions approved by the Cabinet in the new budget, and then lost count. This means that the government is taking the budget into “manual operation”, while the People’s Deputies, who have always protested against any attempts by the Cabinet to gain control, are about to agree to this.

The whole budgeting process has been manually operated. Of course the Finance Ministry has done a big job to be ready for April 1. But a situation when every day there are new corrections and then there are corrections to corrections cannot be called normal. That is why on voting day even the members of the parliamentary budget committee, to say nothing of other deputies and observers, did not have even a vague idea of what remained in these documents and what had been crossed out…

Neglect of procedure has always led to mistakes. The first one was discovered last Monday, when it turned out that changes in taxation did not correlate with the text of the budget law. This immediately gave room to rumors that the document was seriously amended but not all officials were informed about this. Be this as it may, the Finance Ministry had to make public apologies “for a technical mistake in analytical materials.”

The Deputies got the newest edition of the budget only at eight o’clock on Friday morning, while its discussion in the session hall began at 11 o’clock that morning. Oleksandr Moroz proved right when he said that his faction was ready to vote on March 25 and on March 29, because it would be a political decision all the same.

The good new is that there is no conflict in this situation. The bad news is that the budget was drafted in haste and adopted without careful revision. Unfortunately, revolutionary expediency was the top priority…