Deputy head of the Verkhovna Rada budget committee believes that financial cataclysms can be avoided by approving the new 2004 budget \nIt so happened that the widely praised and adopted by the "Bolsheviks" "earliest in the history of independence" 2004 budget is becoming the most destructive for Ukraine's economy. As "UM" has repeatedly warned, the tax changes it envisages are capable of completely destroying such sectors as agriculture, the food industry, book printing, pharmacy, "driving up" housing prices and much more — all against the backdrop of a paltry increase in pensions and salaries for public sector workers. While hundreds of thousands of accountants, going out of their minds, are figuring out what to do with VAT and how to now reconcile debit with credit, the government is "shifting the arrows" onto the Verkhovna Rada and waiting for Tuesday — the opening of the new, 4th, session, to correct its economic mistakes retroactively. \nAt the same time, Viktor Yanukovych and his team, it seems, have not drawn conclusions from the current situation. Judging from a conversation with the deputy head of the parliamentary Committee on Budget Issues, Valeriy Asadchev, during the holidays there was no professional work by government officials with the deputies. So most likely, the government will again resolve the main economic issue in the best Donetsk traditions — by brute force, without thorough financial justifications and calculations. The consequences will not be long in coming. \n \n"if we do not vote for the new budget, we will finally entrench complete anarchy in tax legislation" \n \n— The most important economic issue for the Cabinet of Ministers at the 4th session is draft law No. 4000-1, which is supposed to introduce changes to this year's budget. In your view, how necessary is this document and how ready is it for consideration? \n— Personally, I am categorically opposed to this draft law. Especially after the budget norms came into force. If we now vote for draft No. 4000-1, we will finally entrench complete anarchy in tax legislation. \n— But we need to get out of the situation that has arisen, to correct the "flaws" destructive to the economy at least retroactively... \n— In my view, there is currently only one way out of the situation — to urgently and very seriously revise the 2004 budget. We have repeatedly had cases when the budget was adopted already in the current year but introduced into effect from January 1, because the Constitution defines the budget period from January 1. So the budget today is the only document that can be put into effect from the beginning of the year within the legal field, despite the fact that the session begins in February. \n— The government blames precisely the opposition for the fact that the budget is "not right" and changes to it have not been adopted. Why not make concessions? \n— Let the Cabinet not shift its guilt onto the opposition, because these are the creations of First Deputy Prime Minister Mykola Azarov — meddling in the tax field of the budget. The opposition, on the contrary, constantly reminded at budget committee meetings that the budget cannot be adopted by force. This is a serious financial document that must be carefully studied. Instead, Azarov initiated the practice of brazen, forceful pushing of the law "On the Budget" through parliament and the committee, without economic justification of the document. Today we are reaping the consequences, for which the current government and personally Mr. Azarov bear full responsibility. \n— In your view, what needs to be changed in the 2004 budget? \n— It is necessary to abolish, for example, VAT on privatization objects, real estate, printed products, book publishing, medicines, the non-refund of VAT on exports of agricultural products and foodstuffs (which makes our products 20 percent more expensive abroad and makes them uncompetitive), and so on. \n— All of this is in draft law 4000-1... \n— Not all of it. It does not address the expenditure side of the budget, social issues are not taken into account. What, for example, should be done with pensioners? What should be done with the salaries of public sector workers who receive 205 hryvnias instead of the minimum 237? Do we leave this? \nMoreover, I repeat, draft law 4000-1 cannot be adopted "retroactively." In general, there must be a fundamental adjustment of the budget, its balancing, rather than the introduction of isolated, unsystematic changes. \n"Today tax officials demand that government bodies register... as business entities" \n— As a member of the budget committee with experience, tell me: is it realistic to reach an agreement on revising this year's budget? \n— If the government abandons forceful methods of resolving economic issues, then yes. Provided that the Verkhovna Rada works productively and all political issues are removed, we could work out a new budget draft in the first week of February and, although we have committee work scheduled for the second week, there is a Government Day on Tuesday, when a decision can be made and changes to the budget voted on in the morning. Then the economic situation would change seriously and we would not be shaken all year. If this does not happen, if the President's political machinations with his "majority" continue, then the Verkhovna Rada will be blocked for a long time, and we will not introduce changes to the budget in February, and the situation in the economy will simply get out of control. \n— Are these political assessments or a real threat to ordinary citizens and entrepreneurs? \n— The entire absurdity of the new tax policy will surface already in the first tax period, in the first quarter. Today, for example, it has reached the point where tax officials demand that... government bodies register as business entities. Because budgetary institutions and local government bodies have become VAT payers upon the privatization of land (it is they who dispose of it). Thus a budgetary institution, as a commercial structure, becomes a taxpayer. This is nonsense, of which there are countless in the budget. \n— Actually, government officials themselves admit that not everything is well. The Cabinet has already taken the path of adopting resolutions that abolished VAT on medicines and diapers and returned VAT to exporters of agricultural products. Why is this not a way out? \n— Acting in a non-legal field and grossly violating laws can never lead to anything positive, only to negative. There is a law that has higher force than any resolutions of the Cabinet of Ministers. So tomorrow a tax official, that is, a specific official, must either comply with the law or refuse to comply with it and implement some government resolutions that contradict this law. He faces a dilemma. Because six months will pass, the political situation will change, another government will come and say: "On what grounds did you not comply with the law?" The tax official faces criminal liability for all these machinations in which Azarov and his entire system, rightly called "Azarovism," operate today. \nThis "Azarovism" has already destroyed the tax service, and now it is destroying the entire economic foundation of Ukraine in general. Where has it ever been seen that a first deputy prime minister made such a mess in the budget that he is now forced to write resolutions himself on how not to implement what he has done?! \n— How will the situation with the central budget affect the regions? \n— Today local budgets have effectively turned into cash desks for paying wages. Because in them all expenditures (about 70 percent) consist of wages. If you add utilities and other mandatory payments, there is simply no money left for maneuvering. For local budgets, a new budget code needs to be adopted, the draft of which we recently submitted. In my view, local budgets should be freed from the tutelage of the state budget. Everyone should mind their own business. Local budgets — local problems, and the state budget — state ones. And not reach into each other's pockets. \n \n"During the holidays the government did not make a single attempt to professionally balance revenues and expenditures" \n \n— During the holidays, did government officials try to professionally discuss problematic economic issues in the budget committee, or is everything still being decided on Hrushevsky Street, behind closed doors?— After the deputies rejected draft law 4000-1 (by the way, remember, even the "Bolsheviks" did not support it), all subsequent attempts to return to a professional discussion of this issue fell into the political field. During this time, I repeat, the situation has significantly worsened, because the norms of the feeble budget came into force on January 1 and have been in effect for almost a month. However, during the time that has passed, the government has effectively made no efforts to introduce changes to the budget. They have only publicly "fixated" on draft law 4000-1 and see nothing besides it. There were no attempts to professionally change the budget or balance it. \n— In your view, did this happen because the budget committee is headed by an opposition representative, or are there some other reasons?— The current government is the first government in the entire history of the Ukrainian state in which there is not a single economist. I am not talking about the new minister of economy, because he was just appointed and I do not know him. But, for example, his predecessor Valeriy Khoroshkovsky never managed to prove himself or form a team... If previously there were governments with more professional economists, with less professional ones; there were economists who merely came to the committee and listened, there were those who debated and objected, now there simply are none. There you have all the reasons. \n— I understand that the session meeting on February 3 may not take place? A common language regarding constitutional reform has not yet been found? \n— The opposition found a common language long ago. For us, the common language of work in parliament is the Constitution and the rules of procedure. If neither the Constitution nor the rules of procedure are observed, then there is no parliament, and we cannot agree to what the majority says: "We made a mess there as we wanted, voted with hands, feet, raised two hands each, with some signatures at night, and now let's turn this page, let everything remain in force, because now we need to resolve some practical issues"... That won't work. Either we return to the mark that began on December 22 and will do everything in accordance with the Constitution and the rules of procedure, or, if the majority deprives us of the opportunity to work in the legislative field, then the opposition has all the moral rights to deprive the majority of the opportunity to work. Thus we establish absolutely equal conditions. And responsibility for everything, of course, lies entirely with the "majority." They are in charge: all the ministers, the Prime Minister, the President, the Chairman of the Verkhovna Rada — they are their people. \nReference: Valeriy Asadchev, 50 years old. People's Deputy of Ukraine of the III and IV convocations. During 1998–2002 he was chairman of the subcommittee on local budgets of the parliamentary Committee on Budget Issues. Now he is deputy head of the budget committee of the Verkhovna Rada. \nMember of the "Our Ukraine" faction, heads the Kyiv city branch of the Ukrainian People's Party. \n