The discussion “Rake 2: Wage populism for the public sector” – the main theses of the speakers
[ad_1]
On May 4, Ukrainian SOE Weekly in partnership with Economic Truth held discussion “Rake 2: Wage populism for the state sector” with the participation of the Ukrainian SOE Weekly team, namely Andriy Boitsun, Oleksandr Lysenko, and Dmytro Yablonovskyi, and People’s Deputy of Ukraine Volodymyr Tsabal (Secretary of the Budget Committee, the “Voice” faction).
The discussion was devoted to the draft law No. 8312, which the Verkhovna Rada adopted on April 10, 2023. First of all, the draft law was directed on “improvement of the legal regulation of issues related to the implementation of measures of the legal regime of martial law”, in particular regarding the implementation of forced alienation of property and its management. Along with this, the draft law also proposes to set limits on the salaries of civil servants and employees of state-owned enterprises during wartime in the amount of 10 minimum salaries (i.e. UAH 67,000).
The amendment, which provides for the establishment of restrictions, was introduced by Dmytro Razumkov and other deputies. Razumkov noted that it is aimed at “reimbursing payments to 30,000 military, civil protection service, and police officers due to salary limitations for top officials.”
We have collected the main theses of the speakers regarding the adopted draft law.
Volodymyr Tsabal emphasized:
“Actually, the amendment doesn’t return anything because it doesn’t provide funding. By not foreseeing the changes in the budget and the sources from which these additional payments will be returned, we have put our military command in a situation where, if this amendment is adopted, they will have to are required, either not to comply with this law or to take these funds from those funds that have already been allocated to the army. Accordingly, these are funds that are used, including for additional payments to the military on the front lines.”
According to him, the sources that are provided for by the amendment from the savings on the salaries of civil servants will finance approximately 2%, which is conditionally 600 hryvnias of additional payments [на одну людину]. That is, where to get 29,400 hryvnias, the amendment does not provide, emphasized the people’s deputy.
Oleksandr Lysenko drew attention to the fact that the draft law was primarily supposed to settle issues related to management of companies that were withdrawn for the needs of the state during the war. From this point of view, it seemed completely illogical that the amendments to this draft law tried to solve the issue of financial support for military personnel in general, and even more so to provide for salary restrictions for civil servants and employees of oil companies.
In addition, he emphasized that according to the text of the law, these salary restrictions do not apply to members of the supervisory boards of state-owned companies.
Lysenko also called on society to understand how the consequences of the outflow of qualified human resources from the state sector can affect everyone personally, giving the example of the NBU and how it dealt with financial stability during serious crises before the reform in 2014 and after the reform – at the beginning of a full-scale invasion in February 2022 .
Andrii Boitsun recalled that 3 years ago there was a very similar attempt to limit the remuneration of members of supervisory boards and top management of state-owned enterprises.
“Then, according to ours calculationsthe effect of savings was one and a half hryvnias, and the effect of bad management was about 700 hryvnias, i.e. hundreds of times more,” he said.
“Moreover, we predicted at the time – and these predictions came true – that the restrictions would create incentives for the manipulation of payouts,” Boitsun emphasized.
He also noted that this amendment could lead to an outflow of labor and, as a long-term consequence, the reluctance of professionals to work in the public sector due to unpredictability.
Volodymyr Tsabal also noted potential threats from the point of view of Ukraine’s international obligations:
“International partners conditionally finance 100% of expenses that do not relate to defense, which is 60% of the total budget. There is an agreement that we will agree with them on any changes to the budget. Accordingly, disagreement with the changes will lead to the fact that the amount of funding from on their part in the next 3-6 months could be significantly reduced. If it is significantly reduced, the funds that we can spend on the military, will significantly decrease after 3-6 months.
Accordingly, the amendment, aiming to increase the funding of the military, may actually decrease it, in the event of its adoption, because no one has canceled international obligations,” Tsabal believes.
According to Volodymyr Tsabal, a working group has already been created in the Verkhovna Rada, which should develop changes based on realistic estimates by the end of May.
The recording of the discussion in Ukrainian is available at link.
[ad_2]
Original Source Link
