Minister of Finance calls for focusing on creation of financial conditions to change tide of military campaign
Recovery and capital investment projects for local budgets should be postponed to meet the needs of the military campaign as much as possible, Ukrainian Minister of Finance Serhiy Marchenko urged at a webinar organized by the Centre for Economic Strategy on Tuesday devoted to the transfer of the "military" personal income tax from local budgets to the central one.
"For some reason, it seems that some are now undergoing a rapid recovery from the war, while others are dealing with the banal issue of survival for the medium term – without the lack of clear and understandable prospects about how we will maintain the military machine and the entire military campaign," the minister said.
He admitted that a lack of understanding of the current situation in Ukraine is a problem and stated that in such conditions compromises are difficult to achieve.
Marchenko called on everyone to remember the beginning of the full-scale war – March-April 2022, when "there was no politics, no politicization of these issues."
"I don't know what has changed. In my opinion, only the situation has become worse from the point of view of our prospects, it is definitely not better," the minister of finance said.
He said that the government in the 2024 state budget proposes to liquidate the Road Fund of UAH 95 billion and removes all capital expenditures that the central government has to focus on financing the military campaign, although it also understands that this raises the problem of economic survival.
"But that's not what we're talking about now. We now need to create conditions so that we can turn the tide of the military campaign. If this is not clear to anyone, I see no point in talking about it again. And looking for additional arguments for compromise," Marchenko said.
He said that the military campaign requires UAH 5 billion from the budget every day and called for "a return to reality – to the situation in March-April 2022."
The draft state budget 2024 for the second reading assumes receipts of UAH 1.769 trillion, including the general fund of UAH 1.597 trillion, and expenditure of UAH 3.355 trillion, including the general fund of UAH 3.121 trillion.
The upper limit for the deficit is UAH 1.572 trillion. At the same time, according to Marchenko, out of $41 billion in external financing (the average annual rate is expected to be UAH 40.70/$1), there is currently no confirmation of the receipt of $29 billion.
The redirection of the "military" personal income tax will allow the 2024 state budget, according to Marchchenko, to receive about UAH 96 billion.