The Chairperson of the Verkhovna Rada of Ukraine Andriy Parubiy opened the morning meeting.

A.Parubiy informed the House that today, during the “Ask the Government" hour, there would take place a presentation of the draft 2018 Ukraine’s state budget  law.

The meeting is attended by the Cabinet with the Prime Minister of Ukraine Volodymyr Hroisman in the lead, according to the presiding officer.

The floor was then given to the Minister of Finance of Ukraine Oleksandr Danyliuk, who was delivering the above draft budget law.

The minister presented the key budget figures and gave an overview of that state value paper. “This year we have made yet another important step towards clear, predictable and productive budget process. It has been for the first time throughout the Ukraine’s budget history that we launched a real medium-term budget planning calendar. The kingpin of the last is the three-year budget resolution, which was approved this summer”. The minister called that shift to be revolutionary as “the switch from a one- to a three-year vision of the budget planning seems to be a holistic change in the budget policy at its fundamentals, which assures a strategic approach to setting priorities and effective allocation of resources”.

The minister then shared the main macro-indices of the 2018 budget and the priorities defined by the Government.

Budget revenues. Revenue of the consolidated budget is expected at the level of UAH 877 billion (rise by 13.8% against 2017).

On-budget expenditures. The 2018 draft state budget expenditures total up to UAH 948 billion (rise by 12.7% vs 2017).

Debt. The overall public debt ceiling is set at UAH 2.747 trillion, or 84.6% of GDP. According to calculations, the total amount of national debt in the national currency by the end of 2018 will be UAH 1.999 trillion, or 61.5% of GDP. The guaranteed debt in the national currency will amount to UAH 747.551 billion. The state and the guaranteed debts will both total the above 84.6% of GDP.

The repayment of the state debt next year is estimated at UAH 175.725 billion, including UAH 61.701 billion for external debt. The debt service payments are projected at UAH 130.200 billion, including UAH 50.86 billion for external one. Given the structure of government borrowings in 2017 and the projected borrowings at the end of 2018, the share of internal debt will be 37.6% of the national debt, and the share of the external debt - 62.4%.

Borrowings. The Cabinet of Ministers of Ukraine seeks to borrow UAH 214.9 billion in 2018 to finance the general fund of the national budget, including UAH 91.2 billion on the foreign market. The government projects an average rate for domestic borrowings at 12% per annum, and external - about 9% per annum. In 2018, it is also planned to have UAH 17 billion from international organizations for the special fund to finance the budget and economy projects.

Defence, security, law enforcement. The government-elaborated draft 2018 state budget sees expenditures at least 3% of GDP to be immediately directed to the army, while the general defense and security budget will amount to 5% of GDP. Spending on security and defense makes up over UAH 164 billion. The Ministry of Defense is to receive UAH 83.3 billion (currently UAH 61.7 billion in 2017); the SBU (Security Service of Ukraine) will receive UAH 7.6 billion as opposed to UAH 5.7 billion in 2017. The Prosecutor General’s Office will acquire UAH 6.7 billion (UAH 4.6 billion in 2017), the Ministry of Internal Affairs UAH 63.9 billion (UAH 41.3 billion in 2017), the National Guard of Ukraine will be granted UAH 9.7 billion (as opposed to UAH 8.5 billion in 2017). The National Police will have UAH 23.7 billion (UAH 15.4 billion in 2017), and the State Fiscal Service will be allocated UAH 11.5 billion (as opposed to UAH 5.6 billion presently). The Cabinet of Ministers of Ukraine has proposed the Verkhovna Rada to allocate UAH 857 million for the activities of the National Anti-Corruption Bureau of Ukraine (NABU), UAH 683.5 million for the National Agency on Corruption Prevention (NACP) and UAH 116 million for the Specialized Anti-Corruption Prosecutor's Office (SAPO) in 2018.

Deficit of budget. A draft 2018 budget foresees a deficit of 2.4 percent of gross domestic product. The budget deficit is in line with the fiscal targets of Ukraine’s $17.5 billion aid-for-reforms programme from the International Monetary Fund, but it still needs to be backed by lawmakers in parliament. The document also provides for the reduction of the national budget deficit to 2.4% of GDP from 2.7% of GDP in 2017, with the rating value of UAH 78 billion.

Economy growth. The 2018 budget is based on expectations the economy would grow 3 percent in 2018 (vs a projected 1.8 percent this year), with the total growth 11% until 2020.

Farmers. Ukraine's draft national budget for 2018 announces the allocation of UAH 7.3 billion of state assistance to farmers (compared to UAH 6.3 billion in 2017), including UAH 2 billion to reduce the cost of loans to open new dairy complexes.

Inflation is seen slowing to 7 percent from 11.2 percent in 2017.

Health. The draft national budget for 2018 announces the increase in expenses on healthcare by some UAH 11 billion. In 2016, expenses on healthcare totalled UAH 70 billion, in 2017 – UAH 101.3 billion and UAH 112.5 billion is planned for 2018. UAH 13.2 billion will be sent to finance primary healthcare and around UAH 52 billion to finance secondary and tertiary healthcare. Some UAH 1 billion will be sent to the medicine cost reimbursement program (Affordable Medicines).  It is planned to send UAH 1 billion to support rural medicine under an initiative of Ukrainian President Petro Poroshenko.

Education and science. The government proposes to increase spending on education to UAH 217.5 billion and science - up to UAH 7.9 billion.

Pension. In 2018 the Pension Fund will get UAH 156 billion (versus UAH 141.3 billion in 2017).

Regions. In the draft state budget for 2018, UAH 10 billion   are laid for regional development.

Exchange rate. Ukraine's draft state budget for 2018 was calculated on the basis of the projected exchange rate of the national currency at a level of UAH 30.1 per U.S. dollar.

Minimum wage. The government proposes to raise the minimum wage by 16.3% - up to UAH 3,723 from January 1, 2018. It is at the same time emphasized that the increase in costs is compensated solely by the results of economic growth, rather than additional taxes and fees.

Increasing the funding of the State Emergency Service of Ukraine (SESU) is one of the priorities of the draft national budget for 2018. In 2018 it is also planned to direct from the state budget UAH 400 million to the Energy Efficiency Fund (EEF).

The questions hour finished at that point.

MPs accomplished viewing the section III amendments, and took on to the section IV of the draft bill No.6232, amending a series of Ukrainian codes.

Iryna Herashchenko, chairing the meeting, closed the plenary session.

Since September 25 till 29, there will be voter education.

The next plenary meeting of the Parliament is to take place on October the 3rd.

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