What’s it about?
For the first time, mid-term budget planning will be implemented in Ukraine.
The adopted Budget Resolution is a strategic document which determines the use of public funds for priority reforms. This will lay ground for the future-oriented plan of economic development and systemic comprehensive reforms.
The new Budget Resolution stipulates an enhanced approach in the budget planning “from top to the bottom”. Thus, the total resources shall be assessed and distributed between the priority policy areas taking into account the necessary changes.
The Resolution also sets overall spending limits as well as spending limits for the main entities entitled to manage public funds for each year of the respective mid-term period.
Also, this Budget Resolution allows to involve the Parliament into the budget planning process at an earlier stage which can improve the quality of the document and help avoid unfounded last-minute decisions.
Also, the Budget Resolution takes into account strategic objectives set by the Government for the period till 2020. They include tax and debt policy, implementation of the healthcare reform, pension and land reform, development of agriculture, stable funding of the road network, defense and security, decentralization and further upgrade of the social standards.
Why is it important?
Transition from one- to three-year budget planning is not just a technical change in the development of the state budget by adding two more budget periods.
This is a systemic change of the budget policy which shall deliver a strategic approach to determining priority measures as well as ensure effective distribution of resources.
What are the advantages?
• Consistent and predictable budget policy contributing to financial stability;
• Predictable and efficient budget spending aimed to improve the quality of public services;
• Enhanced budget discipline and setting clear rules of the games which will be followed by all participants of the budget process;
• Control and effective management of the state debt;
• Possibility to secure the necessary expenses for the implementation of the Mid-Term Action Plan of the Government for the period till 2020.
What comes next?
• The draft of the Budget Resolution will be submitted to the Parliament.
• The Ministry of Finance expects a constructive and appropriate dialogue with the Parliament.
Based on the adopted Budget Resolution, the draft state budget shall be elaborated.