OREANDA-NEWS. December 10, 2012. The 2013 budget is based on realistic national measures subject to global economy developments and outlook, and outside factors impacting Ukraine’s economy.

Next year’s state budget is supported by primary figures as set out below:

 
GDP growth – 3.4%;
- nominal GDP – UAH 1.576 billion;
- Consumer Price Index – 4.8%;
- Producer Price Index – 5.5%.

To this effect, Consolidated Budget revenue will be UAH 464.4 billion amounting 29.5% of GDP including UAH 362.8 billion of the State Budget’s Revenue (from interbudget transfers).

When making up the revenues, they have duly considered for:

- extending the revenue by implementing the non-land real estate tax since January 1, 2013 (local budgets’ special fund);
- recategorizing the license, certificate and state registration fees to local revenues disregarded in assessing interbudget transfers (2nd basket);
- providing governmental social benefit;
- providing personal income tax credit;
- reducing the corporate income tax from 21% down to 19%, and down to 5% for software industry entities.

To relieve outside markets dependence in debt policy, they have drawn up relevant action plan so that foreign debt instruments be replaced domestic ones. In such a case, these borrowing will cost as low as possible.

State budget deficit is supposed to be 3.2% of GDP (UAH 50.4 billion).

The Consolidated Budget is supposed to have expenditure and allocate credits of UAH 525.8 billion including UAH 425.5 billion of the State Budget’s expenditure.

In the area of the 2013 pubic expenditure, the Government will keep absolutely keep the principles of rationality, priority and efficiency.

A priority of the 2013 Budget is still the step-by-step policy of raising social standards and increasing social expenditure.

It is expected to raise the first grade official salary of the unified tariff net subject to reducing money gap of this figure and minimum salary in relation to this year, and fix it as follows: UAH 852 since January 1 and UAH 928 since December 1 (December 2013 growth, in relation to December 2012, will be 10.6 percent, and December money gap will go from UAH 295 down to 290).

The 2013 budget’s living wage per person for a month is as follows: since January 1, 2013 UAH 1108, since December 1, 2013 – UAH 1176 (December 2013 growth, in relation to December 2012, is 7.4%) and, as concerns major social and demographic population groups:

• for children under six years old: since January 1, 2013 - UAH 972, since December 1, 2013 - UAH 1032;
• for children between 6 and 18 years old: since January 1, 2013 - UAH 1210, since December 1, 2013 – UAH 1286;
• for able-bodied persons: since January 1, 2013 - UAH 1147, since December 1, 2013 - UAH 1218;
• for disabled persons: since January 1, 2013 - UAH 894, since December 1, 2013 - UAH 949.

That living wage grows, publicly guaranteed revenues will also grow for needy young families and pensioners.

In relation to 2012 amounts, the 2013 birth grants are about to be raised by 6.7 percent and paid as follows: for the first child - up to UAH 29,310, for the second child – up to UAH 58,620, and for the third child and more - up to UAH 117,240.

Birth grant’s one-time portion is expected to be paid for 576.4 thousand children next year, and the portion of monthly birth grants will be paid to 1120.9 thousand children.

State social assistance amount (including the highest one) will increase throughout 2013 to each child of 3 to 13 by UAH 180, and by UAH 360 for each child of 13 to 18. Next year, state social assistance will be provided to about 150 needy families having over 270 thousand children.

The 2013 budget accounts for UAH 486.8 million of state social assistance for orphaned children and parental care deprived children, money cover for breeding and adopting parents for their social services in family-type children’s homes and foster families under the "money follows child" principles. The above figure exceeds the 2012 one by UAH 105 million, or by 27.5 percent. This will create family environment for over 11 thousand orphaned children and parental care deprived children.

To provide for the single one-time annual monetary aid, the 2013 State Budget’s expenditure is extended by UAH 60.6 million in relation to this year, making UAH 821.3 million.

2013 will retain gradual housing for disabled servicemen, peacekeeping soldiers and people affected by the Chornobyl disaster.

In order to gradually house disabled servicemen, peacekeeping soldiers and people affected by the Chornobyl disaster, the State Budget for 2013 accounts for UAH 328,4 million made up of: UAH 75.3 million for housing disabled servicemen, UAH 95.6 million for peacekeeping soldiers, and UAH 157.5 million for those affected by Chornobyl disaster

In 2013, it is supposed to cover implementation of state target programs and programmatic efforts in health care of UAH 23 billion in areas as follows: (i)immunological prophylaxis of the people; (ii)drug treatment; (iii)enforcement of National Program of HIV Prophylaxis, HIV and AIDS affected people’s treatment, care and support; (iv)National Program for combating cancerous diseases, implementing series of measures to treat oncology children, medical efforts to prevent and treat cardiovascular and cerebro-vascular diseases, under National Program "National Action Plan to Implement the UN Convention on the Rights of the Child"; and (v) the state monthly aid to HIV Children (more than 10 thousand children under 18 years old).

To provide the ambulance with medical and health care products, and provide health care institutions with consumables and general narcosis drugs for adults and children in hospital and outpatient surgeries, UAH 0.5 billion is allocated.

To implement a pilot project introducing public pricing of medicines for treating people with primary hypertension, costs have budgeted at UAH 0.2 billion totally.

To support health care reform in pilot regions (such as Vinnytsia, Dnipropetrovsk, Donetsk region, and Kyiv), health care expenditure regarded in assessing interbudget transfers include the expenditure of about UAH 0.7 billion inclining UAH 0.3 billion to appreciate health workers rendering first aid (over 14 thousand people) for their work volume and quality.

Target flows extended for people with diabetes mellitus and diabetes insipidus (regarded in assessing interbudget transfers) by UAH 53.4 million, or by 10 percent related to 2012, with the total of UAH 0.6 billion. This expenditure will fully provide the 238.7 thousand people affected by diabetes mellitus and diabetes insipidus with insulin and desmopressin preparations.

UAH 0.5 billion has been added to scholarships, thus enabling to pay 37.5 percent-raised minimal ordinary (normal) academic scholarship under Resolution No. 703 of the Cabinet of Ministers of Ukraine dated July 25, 2012.

Both this and next year, scholarships will be indexed. By late 2013, scholarships will be indexed by 7.4 percent.

Also, in the context of changed remuneration condition, scholarships will be raised for postgraduates and PhD students.

To publish, purchase, store and deliver books and manuals for university students, and students of comprehensive and vocational schools, and foster children of preschool education establishments, UAH 243.2 million has been accounted for, including UAH 10 million to implement the protocol of Meeting of the Public Humanitarian Council chaired by the President of Ukraine, to provide for books and manuals including enlarged font and Braille script lettering.

Next year’s local budget resources is UAH 220.1 billion (UAH 28.1 billion, or 14.7% more than in 2012).


Provinces are going to be publicly supported via:

- State Regional Development Fund (UAH 1.3 billion)
- subvention for selected territories’ social and economic development (UAH 1.3 billion)

One should say that, for 2013, in parallel with traditional capital expenditure financing, there is suggestion of their new passing approaches, namely by sovereign attraction of extra resources through banking sector to contribute to solving regional development issues.
 
Thus, the 2013 budget is supported by a value system definitely directed to securing social and economic development of Ukraine, growth of living standards, aiming financial and tax policy to build an efficient and feasible state.