OREANDA-NEWS. March 04, 2011. I want to congratulate the taxpayers on that the principal innovation of the Tax Code came into force. March 1, value added tax is refunded automatically - for those taxpayers that meet the criteria set by the law. And, from April 1, by the way, tax holiday for small business starts - also in accordance with the standards prescribed in the Tax Code. For taxpayers it is a huge event which allows a new, more effective, and sustainable development of the business plan. And, for the authority that is a very responsible step. So within a month the State Tax Service should carefully explain the new rights to their taxpayers, to uncover new opportunities, "rules" and how to use them.

I emphasize that the government consistently fulfils its election promises. But, information accompanying the reforms, which are aimed to improve living standards in Ukraine, apparently is insufficient. Therefore, we have to organize a broad campaign on the tax rules that take effect, especially as they are related to millions of entrepreneurs.

Prudent policy of the Government can provide a stable economic recovery. Only those results of the national economy can create successful implementation of budget indicators, and facts prove that.

On Monday, the State Statistics Committee announced the first estimate of nominal GDP in 2010. Compared to 2009 it increased by 4.2% and for the first time we went abroad the GDP landmark - one trillion 60 million UAH.

We have set that task in 2007, planning the budget for 2008. However, 2008 and 2009 were lost for economic development and have formed all the problems that government solves today.

What problems make only the debt problem! In March, we have to pay 10.5 billion UAH. You understand that it is a huge resource - more than annual expenditures from the State budget for health care, greater than the funding of Euro 2012.

Peak payments on public debt falls on July when the Government must return to creditors 19 billion UAH (this is more than the annual cost of the whole educational system in the country). Never in our state was in dept of such astronomical sum, and the lion's share of it is the mindless borrowing during 2009 at nearly 30% per annum. When the government had the only goal - to win in any way the presidential election.

Thus, only two months - March and July - the Government should pay a resource using which we could double annual spending on education and health care! These funds would be enough to 60% salary increase to the public employees.

I wish the society to realize the depth and scale of the problem, which the Government overcomes, and the estimated devastating results of "activities" of those who created this problem and now criticize the government and try to put a spoke in the wheel.

Yet, consistent work in the first two months of the year gives the result.

Targets of state budget revenues in January-February 2011 are exceeded - the budget received around 50 billion – what makes 1.5 times more than last year.

For the first two months more than 5 billion UAH were reimbursed, which is 1.5 more than in 2010.

All this is the signs of recovery of our economy, and this enables the filling of the budget provided a full and uninterrupted funding of its expenditure.

Dear members of the Government!

Weather meteorologists said that after March 20 spring field work in southern Ukraine can be started. Key tasks of the Government is to ensure conditions for the optimal structure of crops and fodder base required for the revival of livestock. And, for that we are to ensure the forward purchase of crop according to the domestic market requirements, the financing of fertilizers and fuel, crediting agricultural farms.

Yesterday I got acquainted with the work of scientific institutes of the National Academy of Agricultural Sciences. Specialists, who have devoted almost all their life to farming, recognize that this year the country is best prepared for the spring field works for the last ten years. They clearly see the potential of domestic agricultural production and its possible use.

Agrarian Fund accumulated 1.5 billion UAH that can be used to forward purchases. Therefore, only on a competent and efficient use of this resource depends which funds will be in the hands of farmers to work stably for a good harvest.

Government sets the task to increase the volume of agricultural output covering about 5 years. This task primarily is for the agricultural science. Because we can perform this task only by means of advanced agricultural technologies adapted to climate change, with new varieties of plants resistant to sudden changes in weather conditions, by increasing land fertility, improving intensive technologies. Investments will come to successful technology, controlled fertility, and we are confident to be strong enough to meet that challenge.

However, the starting conditions for the ambitious modernization plan of agricultural production are, let us say, not shiny. Crop productivity is 3 times lower than in developed countries. And, the losses during harvesting because of outdated equipment are 2 times higher. Organic fertilizers are 15 times less than in 1990, chemical ones - three times less. Energy capacity per hectare of arable land is 5 times lower than in developed countries.

Productivity is at least two times lower than in Europe. Can we tolerate this situation? Obviously, we cannot.

Why do we need a massive increase in agricultural production volumes? First, to completely, even by a comfortable margin, to ensure the domestic market, i.e., to provide the scientifically based standards of consumption of basic foodstuffs at affordable prices for people. Because everything that we have, for example, some fruits and vegetables are more expensive than in London – that is nonsense.

The opening by the previous administration of agricultural borders to foreign competition consequences are reduced government support and industry decline in plant and animal breeding. An exception is unless the growing export of raw materials (grain, sunflower seeds, rape).

Unfortunately, our citizens have become accustomed to Polish apples, Turkish tomatoes, Egyptian potatoes, American and Polish meat.

However, import dependence opens the door for price fluctuations, which become the global market trend.

Therefore, we are positive to restore agricultural production potential and have already begun this work.

The Government approved the orders of the budget funds use on twenty-three budget support programs in agriculture.

Today we will approve the state order to stimulate construction of new systems for greenhouse, vegetables grown in greenhouses, and seedlings of vegetable crops - through partial reimbursement of their costs.

In addition, a mechanism of partial compensation of agricultural enterprises costs associated with the protection, restoration and improvement of soil fertility (for chemical reclamation, such as liming of acid soils) to be determined.

This year we changed the indirect support of livestock production, which was carried out by processors and had an opaque mechanism for distribution of direct budget subsidies to increase livestock as well as supporting livestock production.

Thus, for one unit of pedigree cattle, the state will pay extra 1900 UAH to farms; reproductive breeding cattle - up to 1 000 per unit; commercial cattle - up to 600 UAH per unit; the government will carry at up to 7 UAH per 1 kg of live weight purchase of cows at the population.

For milk sold, population will be paid 30 cents per kilogram, and the farms - 35 cents.

For young cattle of increased weight condition sold for processing – 1.5 UAH per kilogram of live weight will be paid extra; for pig - 1 UAH per kilogram of live weight.

In addition, the state will reimburse to citizens the costs of purchase of individual milking installations (up to 5000 UAH per unit).

In general, the Government will allocate for such support more than 2 billion UAH.

Moreover, according to the Law of Ukraine "On state regulation of sugar production and sales", we set the maximum amount of quotas to supply sugar to the domestic market in the next marketing year and approve the minimum prices for beet and sugar. This will allow on the one hand - to keep potential of the field and on the other - to ensure the correct amount of sugar in the country.

Second, increase of agricultural productivity and increase of production this are our export resources. Record growth in world prices for agricultural products (grain, for example - more than twice) and shortage of food in the world that will only increase, give Ukraine a unique chance to use its agricultural potential in full volume.

Today the export of animal products makes only 1.5% of total exports from Ukraine, and crop production makes only 7.7%.

Therefore, we are blocked to foreign markets. But, we have already realized this and set the priority - to overcome this situation.

Today in Brussels another round of negotiations with the EU on agreement on free trade area started. From Ukraine negotiations are lead by the First Vice Prime Minister - Minister of Economic Development and Trade Andriy Klyuyev.

Several previous rounds were very close and constructive to bring us closer to the deal. As I indicated, nine-tenths of the agreements on free trade are approved. However, those remained in discussion are of fundamental importance for Ukraine.

EU actually exposes "quota curtain" for our Agriculture products and services such as trucking. We do not agree with such asymmetric restriction of access to markets.

Our products and services should not be - "in reserve". Ukraine does not require an Agreement at any price.

We are aware that an FTA with the EU can be created this year already, but we need a constructive dialogue.

Dear Colleagues,
Monday, a long-awaited breakthrough in the domestic aircraft building had place - medium-distance Ukrainian aircraft Antonov-158 received a certificate of type.

How significant is this event? It opens the way for mass production of the aircraft, and hence, the revival of the domestic aviation industry, the return to capacities existed in 1990. Indeed, the AN-158 has already formed, even fixed by contract demand for the next decade. Excellent development of the Ukrainian designers ahead of time and today has obvious advantages: the construction quality, cost, efficiency, which is 7.5% higher, than the nearest competitor - Brazilian "Embraer". You know, when I boarded the plane, I felt joy and pride for our country. It is our perspective.

What tasks the Government faces in connection with "open sky" for the domestic aviation industry? Full support to the technological leadership of the industry. By the way, they are exempt of income tax under the new Tax Code.

Yes, aircraft builders set questions about procedures imperfection: the technological cycle is slowed almost for a year.

We must solve this problem, because it is not about the procurement at budget funds, but at own funds of enterprises, and of those that have a unique market position.

Further, sectoral science needs much more funding than it is now. We will solve that problem, as investment in the science industry, providing competitive advantages of Ukraine in foreign markets, of course, is our top priority.

Aviation industry is the only sector where the consistent work gives results. According to the State Statistics Committee of Ukraine for 2010, exports of pharmaceutical products in local currency increased by 34% compared to 2009.

It should be noted that exports to countries that are members of the European Union has increased significantly. So, we supplied pharmaceutical products to Germany, Poland, Slovakia, Latvia, Lithuania, Netherlands, Estonia, Bulgaria, United Kingdom, and the Czech Republic.

So good prospects for export in another high-tech industry open up. They became possible, because since 2003 we (albeit with breaks for internal crisis) had consistently trailed the preconditions for release of pharmaceutical products to foreign markets - primarily logistical and scientific base for development, testing and certification of products according to European standards.

I cited two examples where innovation and consistent investment policy gives result. Not very quick but it gives. So, if you put the economy back on track of such development, there is no doubt that Ukraine will succeed.

On the agenda.
Today, in response to numerous requests from our national veterinary medicine, we consider the Cabinet of Ministers resolution, which delays the restrictions on use (as a psychotropic substance) of the "ketamine".

Therefore, the veterinarians may continue using this drug to anesthetize animals during operations. For individual entrepreneurs engaged in veterinary medicine, the restrictions on the use of Ketamine is postponed for 6 months, and for legal entities - for 3 months.

This time is quite enough to get special permission to use Ketamine in their work. Moreover, permitting authorities will be willing to issue appropriate decisions throughout the day – that is the direct order to them.

Ukraine gradually introduces the European quality standards.

Today, we will approve the order of State financing of independent examination of goods, raw materials, finished products and components.

In addition, we will consider the allocation of funds for the operation of quality control laboratories and security of petroleum products.

Implementation of these measures will increase the level of consumer protection, strengthen control over prevention in the domestic market of Ukraine dangerous and defective product. And last, but not least, we will eliminate the unfair competition in this market.

As for the issues in the humanitarian sphere.

Today the Government will decide on the issue of payment of one-time assistance to orphans and children deprived of parental care.

We will set the financing from state budget of activities on rehabilitation of sports and sports of disabled.

Also today, we will define the mechanisms of state financial support for veterans' public organizations, public organizations of invalids, as well as the use of funds for commemoration of victims of war and political repression.

March 9, 2014, Ukraine will celebrate the 200th anniversary of the Ukrainian poet T. Shevchenko, 22 May, this year, the 150 anniversary of his reburial. The Government constantly works to perpetuate and preserve the creative legacy of the poet. We have created an organizing committee to prepare to the anniversaries. Today we will approve the plan to celebrate these holidays.

2011, under the Decree of the President of Ukraine, is declared as Year of Education and Information Society. Members of the Government are submitted an action plan for its holding.

It includes a wide range of activities - from introduction of interactive software products for teaching computer literacy of the population - to use of new technologies in educational process.
Government continues policy to support the state of social infrastructure in the region.

Today, we will approve the procedure and terms of the 2011 subvention to local budgets for financing of socio-economic compensation risk for population living on the territories of nuclear power plants monitoring.

There will also be considered a draft resolution, which establishes the procedure for state support of social infrastructure Slavutych.

In the area of international relations – we will consider a bill on ratification of Agreement between Ukraine and the Republic of France for mutual assistance and cooperation in the field of civil protection.

Thank you, let us proceed to the consideration of agenda items.