Archive for December 2nd, 2015


Drafting national budgets without rallying the troops – Chicken Little

December 2, 2015

The Ukrainian Ministry of Finance, who thus far has done very well under the stewardship of Natalie Jaresko, has published its draft law for the national 2016 budget.

It makes several (arguable) assumptions within its foundations – as it must.  There has to be a peg (or pegs) planted firmly in the ground from whence to work.  That one or all of these pegs may prove to be misplaced only time will tell – and tell it will very soon with regards to one of those pegs – the 2016 budget working upon the presumption of the new and pending tax laws being passed.

Undoubtedly the 2016 budget it will not be popular – particularly with the populist politicians.  Less popular however, are the proposed new tax laws around which this budget is based – once again particularly amongst the populists (and certain vested interests).

That said, in which nation on earth are taxes and budgets not bemoaned and lamented?

2016 is a year that swift and sweeping reform has to be delivered by the political class of Ukraine if it is to survive, lest society and civil society simply leave it behind, the external “friends of Ukraine” dramatically reduce their support for and work within the political class, instead working with a civil society and society that is for the most part a far, far more willing and far less obstructive partner to work with.

For some, the proposed new tax laws don’t go far enough.  For others they go too far.  Some some they are not nuanced enough, for others the much sought simplicity it offers is well worth the shortcomings elsewhere.  Time will again tell.

The biggest and most immediate problem facing the new proposed tax laws – and thus the 2016 budget by extension -is that the government of Ukraine has done a spectacularly bad job (again) of selling it to their party members to support.


With only a few weeks in which to adopt these tax and budgetary laws, time to win over the many parliamentarians in all parties that are less than keen, is short – but then Ukraine always does things at the last minute (often literally – which is at least a source of entertainment within social media as the usual cyber “Chicken Little’s” frantically type that the sky is (again) falling in).

With the New Year holidays swiftly approaching and the parliamentarians wishfully looking at their calendars and the approaching last day of school/Verkhovna Rada session (rather than carefully looking at the legal text upon which they vote), there is perhaps some hope for a more timely adoption of these two critical bills – for the budget by law must be passed before 2016 begins and it may well be that the parliamentary session will be extended to accommodate the law.

But are the parliamentary holidays, and the threat of being kept behind, enough to force a vote through the Verkhovna Rada?  Maybe.

However, the much respected (at least in Ukraine if not in necessarily in the USA) visit of VP Joe Biden in the very near term is likely to see the Verkhovna Rada on something close to its best behaviour – or at least trying to hide its dysfunctionality.  Indeed Prime Minsiter Yatseniuk has jettisoned his scandal surrounded chum Mykola Martynenko prior to VP Biden’s visit having done nothing but defend him until yesterday.  (Be assured that Yatseniuk’s People’s Front Party will vote to agree to Martynenko’s resignation , and thus with others, the 226 votes required to accept his resignation (jettisoning) will be met.)

Ergo, a clever Speaker may be inclined to insure that the Verkhovna Rada programme tackles some (necessarily) difficult votes whilst Mr Biden is in Ukraine, rather than descend into (perhaps ugly) dysfunctionality.  Budget, tax laws and reforming public administration laws being of the uppermost priority – not withstanding decentralisation laws and judicial reform being somewhat urgent too.

There is perhaps a little more chance of passing these two laws (and hopefully a few more prickly laws as well) with the combined weight of the VP Biden visit and a pressing holiday calendar a little earlier than the last day of parliament.

Then again, perhaps not.  Ready the “Chicken Little’s”!

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