Ukraine continues to go on the European track. The population of the country has already experienced the advantages of European utility tariffs, now it’s hospitals, schools and kindergartens. Next year, they are encouraged to learn the Western system of funding – to pay for utility services themselves. This is the order of the IMF, and the consequences will be extremely ambitious.
Ukraine has decided to refuse payment of utility bills of hospitals, schools and kindergartens from the state budget from 2017. The money will be allocated only for salaries of doctors and teachers.
“If we build Europe, it is necessary to live on-European. Medicine – only paid education is only for smart people”
“For more effective asset management of medical and educational institutions related to utility property, the utility costs in 2017 will be passed to the funding of these institutions”, – stated in the Ministry of Finance of Ukraine.
Who will pay for utility services in such important social institutions? The centre has shifted the responsibility to the local budgets, and if they can not cope with the task, the output of the two. Or for heat, light and water will pay out of their pockets parents and patients, either of the schools and hospitals just closed.
In the regions assured the local budgets can not cope with this load, and save more than. Such measures will lead to catastrophic consequences – the reduction of schools and hospitals and quality of medical care and education.
“The supply of doctors low, where they further reduce? If earlier we had 60 beds per 10 thousand population, now – 31. What is there to save? We lose doctors and to reduce them is not necessary, do run at a salary of 2 thousand UAH. We will not survive,” – told reporters the Kiev newspaper “Vesti” the head physician of the Volnyansk district hospital Oleg Ivashchenko.
“Not just shock therapy, and we break through the knee. Children will sit in cold classrooms, hospitals do not have enough money neither light nor heat. I don’t know how we will survive the winter with such plans. Maybe kids just need to send them home. But what to do with the kindergartens?” – said the publication of one of the regional officials on condition of anonymity.
Ukraine also can reduce the cost of providing medical services, leaving funding for only the most important ones, says Sergey Zvenigorodsky from UK SOLID Management. “This means that some services now paid by the government can be paid with the aim of attracting medical institutions funds directly from the public. Apparently, due to these means hospitals and clinics will have to pay for utilities. As for schools, it is clear that to pay the “communal” will the parents of the students,” says the source.
Why the Ukrainian government decided to shift the responsibility for the provision of heat and light important social facilities to the local budgets? Because it wants the international monetary Fund.
“This is a purely European approach, and this issue was raised long ago, – says the newspaper VIEW CEO of the Ukrainian analytical center Alexander Okhrimenko. – When I first entered into the agreement with the IMF, it turned out that we have a wrong system of Finance. In European and American countries, schools and hospitals are sitting on the local budget, and we have the nation’s budget. According to the Memorandum, Ukraine has committed itself to carry out reforms and pass funding for schools, hospitals and kindergartens within local budgets.
Technically it’s already been done, continues the Ukrainian expert. However, local governments are in a stalemate – money on utility bills hospitals and schools. So last year in the truest sense of the word “snatched” money from the state budget for heating and light for social facilities, says Okhrimenko. “But this year, Groisman said that this will be no more, and he even has a strict financial policy. Local budgets must find the money to heat schools and hospitals”, – the interlocutor continues.
As planned by the IMF, at the expense of this measure should decrease the burden on the state budget, and the regions need to make more money and have the ability to Finance new social obligations.
The problem is that money from the Ukrainian regions why it has not increased. And it’s not just that during these two years, Ukraine’s economy was severely damaged, including due to the belief of the Ukrainian politicians in the IMF. The problem is that no one looked and did not offer Ukraine to adopt then, too, and experience the replenishment of the budgets of European regions. After all, the United States and in the EU local governments do not only contain their own schools, hospitals and kindergartens, but they also have the opportunity to considerable profits.
“In European countries there is a strict distinction. To the Central budget are only such taxes as VAT (or sales tax) and excise taxes. All other taxes – on income, on dividends, on individuals, on real estate, etc. – go to local budgets”, – said Okhrimenko. In Ukraine (as in Russia) distribution of taxes is quite different.
“The bread taxes – income tax, VAT, excise taxes and income for individuals – go to the state budget. The local budgets are part of the tax on income of physical persons, property tax, land tax, revenue from small and medium-sized businesses. But there is a small amount. If at least all the taxes on income of individuals transferred to the regions, it would have been a good help,” – says Okhrimenko. Now, according to him, half of the revenues from this tax goes to the state budget, the second half is divided between different levels of local budgets, to the city comes only 13-15%.
In Europe a high proportion of small and medium businesses that their tax deductions actually feeds local budgets. And those, in turn, have the opportunity to fulfill their social obligations.
In Ukraine the situation is far from this European idyll. The share of small and medium enterprises small, and those that are, prefer not to pay taxes. The Ukrainian authorities point to such steps trying to make the country European, but first would cost to raise the incomes of the economy and the standard of living of the population at least to the level of Eastern Europe.
“Today we have a budget allocation is wrong, I agree Okhrimenko. – But in Ukraine, to make such distribution, in Europe, it is difficult from a practical point of view. If you do, then the power of the President will be at the level of the English Queen. Of course, Poroshenko will form the bones, but will not allow it. If he does, it will fall into dependence on governors and he will have to ask the governors to help him. And now the governors to his knees crawling”.
Interestingly, the expenditure in the state budget for financing of utility bills medical and educational institutions is actually not so large, experts say. According to Zvenigorod, but this expenditure may not exceed 6-7% of GDP. For comparison, the expenditure on the army in the budget of Ukraine, and they are extremely low, now account for nearly 5% of GDP in 2017, according to experts, will be maintained at the same level (despite Poroshenko’s statement about their decline).
Finally, another reason why the IMF puts Ukraine such a task. The Fund has decided that Ukraine is too much of hospitals, schools and kindergartens in relation to the population. “It’s a method of economic coercion to reduce the number of schools and hospitals. And I think that this all will come. There were two city hospitals, will remain one. Plus constantly claim that it is necessary to reduce the number of schools in rural areas. There are few children, so we need to leave one school district and carry up children from the entire district,” – says Alexander Okhrimenko.
However, the Ukrainian economist in General, quite agree with the need to close some schools and hospitals. “If we build Europe, we must live as Europeans, we have enough of a scoop. Medicine – only paid education is only for smart people. Who’s not pulling, please, there are plenty of opportunities to work work. That’s enough for eight years of education,” – says Okhrimenko.