Comment of the experts of the Agency for Legislative Initiatives concerning Resolution 5000-П dated 20.10.2016 “On Conclusions and Proposals as to the Draft Law of Ukraine on the State Budget of Ukraine 2017” (regarding the increase of MPs’ salaries)
I Problem Description
On October 20, 2016, the Verkhovna Rada of Ukraine adopted the resolution “On Conclusions and Proposals as to the Draft Law of Ukraine on the State Budget of Ukraine 2017” (hereinafter – the Resolution).
Paragraph 4 of the Resolution approved Annex 2 on the increase of salaries of MPs of Ukraine: from 25 minimum wages for members of parliamentary committees to 30 minimum wages for the Chairman of the Verkhovna Rada. Currently the minimum wage is UAH 1450.
Draft Resolution No. 5000-П “On Conclusions and Proposals as to the Draft Law of Ukraine on the State Budget of Ukraine for 2017” was submitted on 20.10.2016. Main Committee: Budget Committee.
• V. Amelchenko (RPL),
• V. Shkvaryliuk (NF),
• O. Horbunov (NF),
• I. Krulko (Batkivshchyna),
• I. Kulichenko (BPP),
• O. Mushak (BPP).
According to Section V of the Rules of Procedure of the Verkhovna Rada of Ukraine (hereinafter referred to as the Rules), the approval of the State Budget is a matter considered under a special procedure.
However, according to Section 1 of Article 153 of the Rules, “Draft Law on the State Budget of Ukraine for the next year shall be considered taking into account the provisions of the Budget Code of Ukraine and these Rules”. Thus, if no special procedure is established for a specific stage of the budget process, the relevant general rule applies.
II Violation of the Resolution Adoption Procedure
The Draft Resolution was submitted and considered with the following violations of the laws of Ukraine:
1. The initiators submitted the draft law without accompanying documents specified in Section 1 of Art. 91 of the Rules, specifically without an explanatory note.
2. The initiators submitted the draft law without a financial feasibility study (including relevant calculations) specified in Section 3 of Art. 91 of the Rules.
3. The Secretariat of the Verkhovna Rada registered the draft law without proper supporting documents, contrary to the requirements of Sections 1 and 2 of Art. 92 of the Rules.
4. There were violations of the terms for consideration of the Resolution specified in the special procedure, namely: in accordance with the requirements of Section 1, Art. 156 of the Rules, the draft resolution was to be distributed among “MPs at least two days before the consideration of the Draft State Budget of Ukraine for the next year in the first reading by the Verkhovna Rada.” Meanwhile, it was distributed on the day of consideration, which made it impossible to properly analyze and discuss it both in Parliament and outside it.
5. The Resolution contains provisions that are incompatible with the requirements for the resolution on the conclusions and proposals for the Draft Law of Ukraine on the State Budget contained in Art. 156 of the Rules.
Given the foregoing, the following violations can be pointed out:
A) Resolution 5000-П was considered without the opinion of the main committee.
According to the requirements of Section 2, Art. 138 of the Rules, “Resolutions of the Verkhovna Rada shall be adopted on specific issues with a view to implementing its constituent, organizational, control and other functions”. Whereas, the Resolution relates to several diverse issues rather than to a specific one. Some of them concern the adoption of the State Budget 2017 and some do not.
Moreover, certain issues even belong to the jurisdiction of different parliamentary committees. Thus, paragraphs 1 and 2 refer to the State Budget 2017, which falls within the jurisdiction of the Budget Committee, while paragraphs 3 and 4 concern the support for MPs’ work, which is within the jurisdiction of the Committee on the Rules of Procedure and the Support to Work of the Verkhovna Rada of Ukraine.
B) The Resolution violates the principle of budget periodization
The resolution violates the principle of budget periodization described in Art. 3 of the Budget Code, which stipulates that under normal conditions the budget period coincides with the calendar year. The Resolution – which is part of the budget process 2017 as specified in its title – goes beyond the stated budget period at both ends because it includes provisions that were put into effect in 2016 and have an indefinite validity term.
B) Extralegal nature of the Resolution
The Resolution on the adoption of the draft law in the first reading also contains regulatory provisions that have a completely different legal nature. This is a gross violation of rule-making techniques and goes beyond the legal culture.
С) Violation of the Constitution
From the submission of the Resolution to its signing, the subjects of the process – the Verkhovna Rada of Ukraine as a state authority, MPs of Ukraine, and the relevant employees of the Secretariat of the Verkhovna Rada as officials of the state authority – repeatedly (see previous paragraphs) acted in a manner inconsistent with the Constitution and laws of Ukraine. Thereby they violated the requirements of Section 2. Art. 19 of the Constitution. In addition, gross systemic legal violations run contrary to the provisions of Section 1. Art. 1 of the Constitution – “Ukraine is a sovereign and independent, democratic, social, law-governed state” – with regard to a law-governed state.
The illegal expediting of the Resolution adoption procedure is unlikely to be in line with this provision. While the scope of MPs’ salaries set by the Resolution (this is not even taking into account the multi-thousand additional payments) is hardly in line with the principle of a social state.
1) The Resolution does not violate the legislation in terms of sources of funding.
The Resolution does not provide for amendments to the State Budget 2016. An increase in MPs’ salaries is possible due to the redistribution of expenditures within the current estimates of the Verkhovna Rada.
The funds necessary to increase MPs’ salaries by 2017 are set out in paragraph 1.17.2. Annex 1 to the Resolution, while funds for the subsequent budget periods, in accordance with the budget law, should be budgeted for when drawing up budgets for the relevant periods. In our opinion, paragraphs 3 and 4 of the Resolution should be completely abolished, and paragraph 5 should be abolished as regards points which concern paragraphs 3 and 4.
According to estimates, the draft budget provides for an increase of nearly 107 million on labor remuneration for the Verkhovna Rada, which completely covers the increase of MPs’ official salaries.
2) The main drawback of the adopted Annex to Resolution No. 5000-П is that these changes were proposed after July 15 when the budget was adopted. The provision of the Rules is the subject of disputes. Moreover, it has been repeatedly violated during the adoption of budgets in different years.
Over the last 10-15 years, there have been numerous cases when Parliament violated this rule, and the number of these violations amounted to dozens. Consequently, almost every such case resulted in the submission of an appeal to the Constitutional Court of Ukraine. Given the history and practice of this Court, only the violation mentioned above may be the subject of consideration by the Supreme Court.
Author: Svitlana Matviienko