OREANDA-NEWS. November 18, 2010. Dear members of the Government! I want to introduce Mr. Baloga, who by Decree of the President of Ukraine is appointed as the Minister on Emergency Situations, member of the Government. I want to hand him flowers. Good luck!

Today we celebrate the Day of agricultural workers. I heartily congratulate our farmers on the holiday! With their selfless work they are, even in such extreme conditions, prevailing current year, achieving good result. At all times, the hard farming work remains a defining part of our country development and guarantees its prosperity and development. Your hardworking hands, natural wisdom, experience are feeding today Ukrainian crop field.

Obviously, our fertile soil is the great competitive advantage of Ukraine in today's world, and that is why the intensive development of agricultural sector is the national priority in the program of fundamental changes that we implement.

Thus, welcoming the agricultural workers on the occasion of the holyday, I wish them both the will and the inspiration for large-scale reforms ahead. We are aware that the full revival of the village still needs a lot to do: first of all to implement the reforms planned to create a modern, functioning infrastructure of agriculture, to provide appropriate conditions for decent life of village inhabitants. The government promotes and will promote domestic agricultural products on world markets and protect domestic manufacturers from unfair competition.

Yesterday the Parliament of Ukraine has begun the consideration of the draft Tax Code in the second reading. The most important factor of attractive investment climate in Ukraine certainly is the tax reform. Yesterday, the Parliament approved the 5 main sections, including the section "General Provisions". Thus, the legislature adopted the Concept of tax reform.

This is the remarkable event.

Tax reform is extremely difficult, extensive, and responsible. Transformations to take place in the country due to tax reform, will determine the life of future generations. Tax Code affects the interests of millions of our citizens. In it, as I said repeatedly, there are pros for ones and contras for others.

We have a free democratic country, so yesterday, those who saw disadvantages in the Code, were on the streets and expressed their disagreement.

The government respects all the citizens, all the legal interests, but I emphasize that the decisions we take are in the interests of the overwhelming majority of our society. Therefore, many entrepreneurs would have to realign their activities in accordance with European, civilized norms. Nevertheless, it is done to make society profit, to make the economy, received a powerful stimulus for accelerated development, give us the opportunity to come to a fundamentally new quality of life.

With pleasure I can note that the majority in Verkhovna Rada of Ukraine takes exactly this position - supports tax reform and goes to the approval, without exaggeration, of momentous for Ukraine Tax Code. That is why I ask the Ministry of Finance, State Tax Administration and other ministries and departments concerned to start immediately development of documents to be approved after the enactment of the Tax Code.

I ask everyone to prepare for large-scale study of the main provisions of that systemic law and their explanation to taxpayers. We must do everything so that the introduction of new regulations passes with minimal complications. Of course, we should also carefully analyze the practice of implementing the tax reform and react immediately if there are any errors or mistakes. They always occur during the implementation of such ambitious projects, and most important - make adjustments just in time.

The government concluded the regular talks with International Monetary Fund mission in the revision of the program of cooperation. In general, I am satisfied with this stage of cooperation with the Fund. As always, as it passes with our very exact and at the same time responsible lenders, the negotiations were difficult. However, I can attest that we have reached a new level of understanding and mutual trust. The IMF is persuaded that the Ukrainian government executes in good faith its obligations. We equally appreciate that the main achievements of the Government is to achieve the macroeconomic and financial stability.

As I mentioned, Ukraine's economy recovers. Recent data from the State Statistics Committee confirm this. Industrial production during 10 months increased by 10.7%. During January-October gross domestic product grew by 4.6%, while GDP increased to 5,7% since October.

A significant increasing of machinery production - 33%, chemical and petrochemical industry - by 20%, steel production, manufacture of fabricated metal products should be noted. During October the growth of these products was 12%. During 9 months in Ukraine 1,6 times more houses are put into operation than the same period of the last year.

But, unfortunately, we have not yet come to pre-crisis level in construction. Developers expect higher prices and have been reluctant to sell houses at prices that was significantly decreased in recent times. MRDC is to find incentives for these developers. That level of profitability, which the developers had in 2006-2007, will be gone. They must understand that if we will return to normal profitability, it will be very good for all.

Accordingly, the high demand for cargo transport is generated. Only the railway during 10 months of this year carried cargo on 12% more than last year. Investment into the country from foreign investors for the first 9 months increased by 6.4%. The volume of retail sales in comparable terms grew by 5.8% over the same period of 2009.

Levels of citizens is steadily increasing, their savings are increasing, in October they made more than 3 billion UAH. The average salary against the last year one has increased in nominal amount of almost 20%. This stability will be continued next year.

The Head of the Mission Mr. Arvanitis said yesterday that the mission has reached the agreement at expert level with the authorities on the question of completing the first review. Thus, the IMF Board of Directors by the end of the year may consider completion of the review program. The result will be a tranche in about 1.6 billion USD.

I recall that till now we did not spend a single cent out of first tranche of the IMF. First of all, we do not need that money as a resource for current needs, but as a reserve, which covers risks of the first stage of reforms, as well as a signal to international investors that Ukraine could be trusted again and relied on as absolutely reliable partner.

This signal is heard in the world, all system investors, international financial organizations believe that Ukraine is successfully returned to the capital market, the world is interested in the new economic policy. In general, unlike the previous government, we spend all the credits, I emphasize, all the credits, exclusively on development, on infrastructure projects.

Dear colleagues, the Government constantly controls the issue of social protection, defining social standards. Salaries in the public sector this year has been revised 4 times. In May 2010 we decided to increase the salaries of the first grade tariff of the unified tariff from January 1, by the way. Also increasing had place April 1, July 1, October 1. According the salaries of other public employees were proportionally increased.

Today, the government is to consider a decision about the next increase of that indicator from December 1. How the government decision will affect the level of employees in this category salaries? For example, the salary of a librarian, compared with the beginning of the year will increase on almost 100 UAH per month. Teacher's highest category - on 117 UAH, highest category therapist – on 125 UAH. Noteworthy is that this is just the salary.

In fact, the increase will be even higher since almost all public employees have the allowances and bonuses to base salary, for example, for years of work - from 10 to 30%, for the complexity and tension in the workplace – to 50%, for the duties of absent employees, for jobs, positions combining - up to 50% for the scientific degree - from 15 to 25, for the classroom management  - to 20%, for the prestige of work - 20%, for librarians for outstanding work environment - 50% and so on. In general, we will increase the salary of almost 3.5 million public employees.

Work continues on improving and harmonizing Ukrainian legislation with European standards. We now consider the draft Presidential Order which contains an action plan to implement the duties and obligations arising from membership of the Council of Europe. These measures, aimed at ensuring the rights and freedoms, rule of law and democratic institutions functioning.

Government is working to reduce the number of permits. Today we will consider amendments to the Law "On Veterinary Medicine", which propose to eliminate the rules on obligatory permission obtaining.

As part of reducing the number of supervisory authorities, we will consider draft amendments to the legislation under which the function of monitoring compliance with standards of jobs for the disabled will be transferred to Derzhnahlyadpratsi.

We will consider a legal document - an act that determines the frequency of compliance audits of labour legislation based on risk-oriented system according to criteria: number of employees, salary status, the observance of labour legislation, etc.

We also plan to consider a bill that would establish a basis for state support of small and medium business in Ukraine. Unlike the Law "on State Support of Small Business" dated 2000, it is proposed to extend measures of government support not only for small but also medium-sized businesses. The draft will support entrepreneurial initiative of citizens, promote employment and increase GDP share of products manufactured by small and medium enterprises.

I want to underline that tax tools to stimulate small business defined in the draft framework draft law, are implemented by the Government in the draft Tax Code.

Draft regulation on ratification of Agreement between Ukraine and Russian Federation on cooperation in construction of reactors of 3rd and 4th EB for Khmelnitsky NPP will also be considered.

We intend to pay much attention during this session to enhancing the human potential of the State. The draft strategy of personnel policy till 2020 and draft Concept on Forming and Developing the Senior Staff for 2011-2015 will be considered.

Also we will consider draft regulation, which stipulates improvement of professional training of civil servants. The main purpose of these documents is to create the high-quality public administration, provide quality services to citizens, rapid adaptation to changes and reaching the priorities determined by the political leadership of the state.

Today we will consider several documents on international cooperation. The bill "On ratification of eight additional protocol to the Constitution of the Universal Postal Union" will also be considered.

In order to implement international agreements reached, today we will consider a draft Protocol to the Memorandum of Understanding between Ukraine and the United States Governments, which provides for Ukraine additional technical assistance on the non-repayment basis. The funds will be used to introduce best international practices and strengthen the analytical component of its functions implementation by the State Border Service.

Dear colleagues, one of the last Government sessions I have instructed to urgently deal with the situation when the general director of SE "Dniprostandartmetrolohiya" Turchin violated the explicit prohibition of the Government, bought using the extrabudgetary funds an expensive car “Lexus”. I also instructed to return the car to the seller, to credit the funds to the budget, to conduct an official investigation concerning the director.

I would like to announce that by order of Derzhspozhyvstandard the official is dismissed. I emphasize that such harsh reaction of the Government will be in all the cases when officials try to spend such expensive for us people’s money for their fancies, and not for that is absolutely of urgent need for stabilization and development.