Draft Budget 2025: New restrictions for parties and changes for hospitals
19 November 2024 14:58
The Verkhovna Rada Budget Committee has approved the draft state budget for 2025 for the second reading and made final amendments, reports
Among the important changes, the draft takes into account the use of credit funds and tax issues. Thus, the $2 billion provided by the UK will be used to cover military spending, including the purchase of weapons.
Also, MPs decided to leave 4% of personal income tax (excluding military tax) at the local level to support communities.
“This means that communities will have a total of 64% to pay for utilities and energy. Accordingly, we are canceling the subvention to regional budgets to cover the difference in tariffs by UAH 12.2 billion,” said Roksolana Pidlasa, chair of the committee.
An additional UAH 128 million was provided in the budget to co-finance the European railway infrastructure development project for Ukrzaliznytsia. In addition, UAH 277.1 million was added for defense research for the National Academy of Sciences.
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Importantly, the budget excluded the possibility for political parties to buy military bonds and canceled the obligation for hospitals to keep funds on their accounts with the Treasury. What are the reasons for this and what exactly will it mean for Ukraine?
Why the ban on political parties buying government bonds is an important necessity
Chairman of the Committee of Economists of Ukraine Andriy Novak in an exclusive commentary for
According to Novak, such a step was due to the actions of a certain political party during the previous government, which used budget funds to finance the party to purchase government bonds.
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“These bonds have quite attractive interest rates, and thus the party’s resource, which should be used to develop the party’s structure and promote ideology, is actually used to make a profit,” Novak said.
According to him, based on this precedent, it was decided to amend the budget to prevent similar situations in the future.
“If this issue is not resolved now, all parliamentary parties financed from the budget, according to the current legislation, can also use these funds to buy financial instruments, in particular bonds, in order to make a profit,” explained the committee chairman.
Cancellation of the obligation to keep funds in the State Treasury is a necessary step for hospitals during the war
In addition, the budget provides for the abolition of the obligation for hospitals to keep funds in accounts with the State Treasury. Novak believes this decision is justified:
“In times of war, all Ukrainian hospitals are overworked. They provide emergency medical care for both military personnel and civilians suffering from shelling,” said Novak.
The expert emphasized that hospitals should be able to quickly address their financial needs. That is why it is a right decision that hospitals can now keep funds on their own accounts instead of in the State Treasury. This will allow them to have more financial flexibility to address their immediate needs in the war.
Thus, the amendments to the 2025 budget are aimed at more efficient use of public funds and at supporting critical infrastructure in times of war.
Thus, according to economists, the budget for 2025 embodies important steps to ensure national security and the development of critical infrastructure. The amendments not only reduce the risks of financial abuse, such as the purchase of bonds by political parties, but also contribute to a more efficient use of funds in sensitive areas such as healthcare and rail transport. The introduced financial flexibility for hospitals will allow them to respond more quickly to needs in times of war, which is an important condition for maintaining national defense capabilities.
Author: Daryna Glushchenko
