Ukraine's leading English-language newspaper since 1995

The Party of Regions led by ex-premier Victor Yanukovych proposed financing increases in minimum wages using funds allocated by the national budget for bank recapitalization, Verkhovna Rada Deputy Mykola Azarov said at a press conference on July 3.

Bringing social spending to the level proposed by the Party of Regions in 2009 will cost about Hr 20 billion, he said.

“Pensions will take about Hr 8 billion, and wages Hr 12 billion, which is about Hr 20 billion in total,” he said.

As regards possible sources of financing greater state budget spending to these ends, he called among them reduction of costs on recapitalization of non-system banks by Hr 10 billion.

“It is planned to allocate from the budget Hr 44 billion for recapitalization of banks... We will see if it is necessary to set aside those sums. Maybe it will be possible to extend Hr 10 billion less. I would do so,” he added.

Azarov also believes that it is possible to channel for financing social benefits Hr 3 billion from overfulfillment of budget revenues, Hr 4.8 billion from the remains of the stabilization fund assets set free due to the decision to finance preparations for the 2012 European Football Championship in 2012 at the cost of domestic loan bonds.

Another possible source, the MP says, is Hr 11.5 billion of the International Monetary Fund loan transferred to the settlement account of the Cabinet of Ministers.

In addition, he says, about Hr 1.5 billion may be economized from cutting the spending on the management stuff, representative costs, and financing the broadcasting of TV programs for government needs.

“To spread out TV programs for the needs of the state, the government envisaged 500 million. Can we refuse from canvassing Tymoshenko in conditions of the election campaign?” he inquired.

Azarov added that raising wages by Hr 10 billion will automatically mean raising revenues of the pension fund by Hr 3.5 billion, because 35% of the wage fund is allocated to the pension fund, and the suggested increase in public spending will provide about Hr 3.5 billion of income tax.

As Ukrainian News reported, on July 2 Party of Regions leader Victor Yanukovych called realistic a rise in the living wage from the current Hr 626 to Hr 808 a month (by Hr 182) starting on July 1, and to Hr 848 a month (by Hr 222) starting on October 1.