Rada Amends 2007 Budget to Increase Social Spending

Yesterday, the Verkhovna Rada adopted a bill to increase state budget income by USD 0.91 bln (+3.1%) and expenditures by USD 1.5 bln (+4.6%) to account for increases in wages and pensions. Specifically, the legislation provided for a boost in the minimum subsistence level to USD 105 (+8%) and the minimum wage to USD 83 (+15%) per month. The bill, which was introduced by the Cabinet of Ministers, was passed by 248 deputies (22 more votes than needed). President Yushchenko has been pushing for these amendments to raise the minimum wage and social spending. To finance the social increases, the government will increase planned revenue for income taxes by USD 0.24 bln and for VAT by USD 0.63 bln. The amendments left the state budget deficit unchanged at USD 3.1 bln. The government also has at its disposal USD 0.59 bln remaining from last year to finance the increased social spending.