The Government has approved the draft state budget for 2018 and submitted it to the Parliament

9/15/17

Today, the Government has approved the draft state budget for 2018 prepared by the Ministry of Finance and submitted it to the Parliament.

The draft budget 2018 is based on the mid-term budget resolution. Thus, the Ministry of Finance has introduced a new model of budget policy – mid-term budget planning. It means that Ukraine will have predictable budget policy, continuity and consistency of the budget process as well as the effective distribution of the state budget funds.

According to the Minister of Finance, the budget for 2018 lays ground for the future economic development of the country which sets the focus on the future and paves the way for systemic comprehensive reforms.

“The Ministry of Finance has never treated the state budget as a merely accounting document. The state budget must pose a tool for development and growth. This is exactly what the state budget for 2018 is about”, Minister of Finance Oleksandr Danyliuk said.

The Ministry of Finance elaborated the budget for 2018 on the basis of the following principles: realistic, transparent, balanced, timely. Its main feature – it helps effectively use taxpayers’ money.

When preparing the budget for 2018, the Ministry of Finance shifted the focus of the budget planning from funding public institutions and empty offices to paying for concrete services. In this way, some of the healthcare and education services are already financed.

The budget 2018 provides funding for all key reforms.

For instance, as a part of the healthcare reform the Ministry of Finance has increased healthcare spending for 2018 by 11%.

Also, the pilot project shall be continued which is aimed to change the funding model for the leading hospitals of the National Academy of Medical Sciences – instead of their facilities, funding shall be provided to pay for concrete healthcare services. Under this project, it is proposed to extend the list of services to be financed from the state budget (approx. 9.000 services).

Also, the Ministry of Finance proposes to introduce funding to research works crucial for the state instead of funding scientific institutions starting from 2018. It is planned to provide 500 million hryvnas for this purpose.

Under the education reform, budget spending for this area in 2018 is to be increased by 18% which is almost UAH 34b higher compared to 2017. For instance, the project “New Ukrainian School” should receive UAH 1.8b which are to be spent to improve the quality of secondary education. It is planned for 2018 to increase the salary for teachers by 25% - almost UAH 6.7b are allotted for this step.

The state budget for 2018 also contains resources for the implementation of the pension reform. Funding for the Pension Fund remains at the level of 2017 amounting UAH 141.3b.

Also, the budget for 2018 stipulates funding for the comprehensive reform of the State Fiscal Service. It is planned to modernize the equipment of the SFS, to increase salaries for its employees etc.

“I am grateful to everyone for the fruitful cooperation and participation in preparing the draft state budget for 2018. Now, we are looking forward to cooperate with the Parliament. We are ready for a productive dialogue and hope that the draft state budget will be supported by the Parliament”, the Minister of Finance said.

Key figures of the state budget for 2018:

• GDP +3%;
• Inflation +7%;
• Budget deficit 2.4% of the GDP (UAH 77.9b);
• Total revenues of the state budget are expected to grow by 15% and exceed 1 trillion hryvnas for the first time;
• The Government won’t increase taxes, budget revenues are expected to grow through economic growth.

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