Tax and accounting insights for Ukraine
26.05.24
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Halyna Tretyakova: Ukraine needs a social contract in the social sphere

In the context of Russia's large-scale invasion of Ukraine, there is an urgent need to create the latest transparent legislation in the social sphere, which would focus on creating an infrastructure of opportunities for every citizen to become economically independent, and targeted social protection for those who find themselves in difficult life circumstances.

This was emphasized by Halyna Tretyakova, Chairperson of the Verkhovna Rada Committee on Social Policy and Veterans' Rights, MP from the Servant of the People faction, during a roundtable discussion on the implementation of ECHR judgments in the Zhovner/Yuriy Ivanov/Burmich and Others v. Ukraine case group.

Galyna Tretiakova focused on the issue of the state's compliance with the minimum standards set forth in the Constitution of Ukraine, in particular, Articles 48 and 49.

On the one hand, according to her, the Constitution guarantees a person an adequate standard of living for himself or herself and his or her family, including adequate food, clothing, and housing. At the same time, the Law of Ukraine "On State Social Standards and State Social Guarantees" provides for much more than the minimum guarantees defined by the Constitution.

The parliamentarian expressed reservations about the interpretation of Article 22 of the Constitution of Ukraine "narrowing the content and scope of existing rights and freedoms" by the Constitutional Court of Ukraine, which may threaten national security.

"The pressure on the expenditure side of the state budget, which is exerted by the CCU decisions without changes to the state budget of the respective year, requires/forces to consider scenarios of tax increases and/or to revise the state budget in terms of reallocation of funds from the military campaign to social security and to implement the decisions of the CCU, national and international courts. Currently, the amount of such arrears reaches the level where every 6-10 hryvnia of social welfare payments is used to pay off court decisions. None of the 43 decisions of the Constitutional Court concerning the amount of social payments mentions Article 95 of the Constitution of Ukraine," stated the head of the committee.

According to Halyna Tretiakova, such decisions of the CCU do not comply with the principle of balance, according to which the authority to make budget expenditures should correspond to the amount of budget revenues for the relevant budget period and the principle of reasonableness, and also impede the ability of the competent authorities to reform the social security system or amend legislation, which in turn threatens the existence of Ukraine as a state.

"Such decisions throw Ukraine back into the socialist past, tearing us away from the European future," the MP believes.

She reminded that social expenditures in Ukraine in 2023-2024 are carried out under a 48-month Extended Program under the Extended Fund Facility (EFF) for Ukraine as part of the IMF's overall support package aimed at preserving fiscal, external, price and financial stability, as well as supporting economic recovery to promote long-term growth in the context of post-war reconstruction and Ukraine's path to EU membership.

One of the conditions for donor countries is to ensure the rational, targeted use of funds, in particular by implementing a targeted approach to allocating aid to people in difficult life circumstances.

"We have a set of problems. We have an opportunity to change the social paradigm during the war," said the MP.

Halyna Tretiakova believes that the social model can be rebooted with the adoption of the Social Code of Ukraine, created in accordance with the provisions of the European Social Charter (the draft Code is being developed with the assistance of the Council of Europe Office in Ukraine). The Council of Europe Office in Ukraine supports the need to change the philosophy of social relations in the field of social policy in Ukraine - a transition from the mechanism of social payments to the development of a system of social services that will help people gain economic independence.

"This is a change in the social contract. We need to do it together," summarized the MP.

Servant of the people

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