The Main directions of budget policy for 2019-2021

The main directions of budget policy for 2019-2021 are developed according to the norms of the Budget Code of Ukraine, normative and strategic documents of the Government. However, the document does not take into account the priorities of the budget policy of the annual message of the President of Ukraine to the Verkhovna Rada on the internal and external situation of Ukraine, which directly breaches Part 1 of Art. 33 BCU.

This document contains the necessary data, including digital ones, which are defined by the Code. The text of the document can be described as formal. It lacks the initiatives of the Ministry of Finance, which were scheduled for implementation in 2017 and in January-April 2018 – the so-called ceilings of expenditures.

The Ministry of Finance developed the draft document in January 2018 and it was identical to the one developed in the previous year. The Ministry of Finance planned to include spending ceilings for 2019-2021 and the strategic goals of the central bodies of executive power (CBEPs) to be achieved during the implementation of budget programs. However, due to the catastrophically poor quality of central government budget planning and overpriced figures in anticipation of budget financing for 2019-2021, the Ministry of Finance was not able to determine the ceiling for expenditures for central bodies of executive power.

The stated need for financing of the CBEPs for 2019 (the secret costs are not included) exceeds the figures of the State Budget in 2018 by 306 billion UAH. The largest increase is observed in the Ministry of Defense – 83 billion UAH; Ministry of Health – 69 billion UAH; Ministry of social policy – 53 billion UAH (including Pension Fund – 30 billion UAH); Ministry of Internal Affairs – 20 billion UAH; State agency of Automobile Roads of Ukraine – 7 billion UAH; Ministry of Agrarian Policy of Ukraine – 13 billion UAH; Ministry of energy – 12 billion UAH; Minregion – 10 billion UAH; Ministry of Environmental Protection – 6,1 billion UAH, CEC – 4,2 billion UAH.

Logic, which was originally laid down by the Ministry of Finance in the process of development of the Main directions of budget policy, is correct and well-balanced, because the main point is the establishment of communication of expenditures of the CBEP with the strategic goals and priorities of the state.The submission of the Main directions of budget policy project was made with the breaching of Part 3 of Art. 33 BCU in the part of the document filing terms to the VRU and its registration – before the 1st of April the CMU accepts the document and passes it to the VRU within three days. The actual date of submission of the Main directions of budget policy to the Verkhovna Rada is May 16, 2018, although the Cabinet of Ministers passed it on April 18, 2018.

Differences of Main directions of budget policy in 2019-2021 compared to 2018-2020:

  • lack of strategic goals;
  • reduction of the number of macroeconomic indicators;
  • lack of key revenue indicators of the general fund of the state budget;
  • the absence of the ceiling of the general fund expenditures of the CBEP;
  • Uncertainty in the formulation of tax and budget policy priorities, which may lead to problems when assessing the effectiveness of their implementation.

Основні напрями бюджетної політики

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