President's address at Verkhovna Rada 10th session opening

Dear Members of Parliament!

Dear guests!

I believe that each person present in this hall is well aware of their share of joint responsibility for the fate of the state, for the success and effectiveness of further changes, for the health and welfare of every Ukrainian family.

Ukraine, just like the whole world, is in a difficult economic situation. Although hard, sometimes with delays and errors, we have started moving towards a modernized and successful state. Our joint efforts have left no one indifferent.

Of course, Ukraine is special in its own way. The policy of modernization has its supporters and critics, active leaders and fierce rivals. But I am convinced that truth is on the side of those doing real work and changing life for the better.

Despite the challenges and trials of global crisis the whole world is experiencing, in the year 2011 that has passed we have provided the rate of GDP growth of 5.2%. This is a very good figure indicating gradual recovery of the country’s potential.

Power trains of economic growth last year were the sectors of real economy: industry, agriculture, transportation.

The inflation rate reached its lowest since 2002 of 4.6%. Credit activity of banks is recovering. We have stable national currency. Budget revenues have grown 31% compared to last year. Citizens’ incomes, wages, social benefits have been gradually growing too.

The most important thing is that in 2011, the national economy has demonstrated its ability to develop, and the state – its ability to provide for such a development.

The first annual National Reforms Plan played an important positive role, allowing better coordination and collaboration between the Parliament, the President, the Government, and local authorities.

This is a good response to the accusations of those, who in the heat of political battle continue to grumble and create distrust in the future, government’s potential, viability of the country, our own abilities.

However, the positive results of 2011 are only a foundation for hard and responsible work of all branches of power in the current year.

It is true that we pin high hopes in the year 2012. But I would like to declare openly and honestly from this rostrum that this year will be extremely difficult in economic terms.

It is necessary to minimize the impacts and risks of the global crisis, strengthen our own national economic foundation.

Last two years have clearly shown that for us to move forward, we need to focus on our own abilities and opportunities. Therefore, internal transformations are a strategic priority for 2012.

In the center of attention should be citizens, their freedoms and opportunities, jobs and social security.

The global crisis has certified once more that there are no those better or those worse in the world. Instead, there are those strong and those weak in spirit, the confident and the confused. And I am sure that it is in 2012, that we must finally overcome our inferiority complex. This is our common task. It can be achieved only through a broad understanding and consolidation around the idea of modernization of Ukraine.

In economic terms, the priorities for 2012 I consider the following:

First, significantly strengthening energy security through implementing energy saving technologies and diversifying energy supplies.

A whole range of such measures is now being taken. It is also necessary to finalize and submit to the Parliament the bills on reforming "Naftogaz Ukraine", attracting investors to the coal industry, transition to a new energy model.

It requires passing bills providing for a modernization of the coal industry, and oil and gas industry.

Second, developing the national production through an effective policy of import substitution and increasing the export potential.

It is important to pass the bill "On Public Funding of Export Activity," which will ensure the transparency of decision-making by export-credit agencies, clear procedure of designating creditor banks eligible to state guarantees, criteria for determining the list of Ukrainian goods subject to financial support.

Third, developing transportation. It is necessary to introduce a new mechanism of rail transport functioning, an independent regulator in the transportation sector, create a legislative base for the maritime ports’ activity.

To address these issues, I propose the Parliament to consider the bills regulating the activity of rail transport and seaports.

Fourth, implementing a new agricultural policy based on land reform and the revival of rural areas.

I have repeatedly stressed the importance of forming legal framework for agricultural land market properly.

We have made the first steps in this area – the Law of Ukraine "On State Land Cadastre" was adopted.

Its implementation into practice for the first time in the history of our country’s independence will allow launching a single information system containing data on all land within the state border of Ukraine.

We are left to make a final and perhaps the most difficult step – to pass a bill on the land market. And we have no right of error here.

This law must uphold rights of ordinary farmers – the owners of land plots.

I would like you to keep in mind that the Ukrainian land is not only our country’s most precious resource, but has the fate of the present and future generations closely linked with it.

I hope you will approach this matter responsibly, consider our experience and the experience of other countries that have been through that process, and draw the right conclusions. I would like to repeat: we will not hurry. It is most important to approach this matter very carefully, taking into account the interests of farmers. This is our top priority.

Fifth, reforming the housing and communal services. The Government has prepared a number of bills that create more transparent and civilized rules for condominiums and apartment buildings.

In its final preparation stage is the draft law on commercial accounting of heating energy, which will soon be submitted to the Parliament.

I consider it necessary to pass bills regulating the designation of building-adjacent area and rent of municipal facilities.

The steps we have made to implement budget reform regarding the legal introduction of transparent and predictable budgetary policy foundations must see their practical implementation.

This year’s work on the budget demonstrated the use of outdated and non-transparent approaches to the formation of the main economic document.

It primarily concerns the practice of manually controlled distribution of funds aimed for public support of the regions.

I would like to emphasize again that these state budget funds must be distributed among the regions based on fair criteria, considering objectively the state of development of each region.

In this connection, according to my instructions the Government is preparing amendments to the 2012 State Budget of Ukraine to redistribute regional investment subsidies in accordance with the above-mentioned principles.

I count on MPs’ understanding and support during the performance of this task.

Stability of public finances is closely tied to the stability of the tax system. However, the adoption of the Tax Code has not, unfortunately, stopped the continuous practice of making changes to the tax law.

Together with changes aimed at improving some articles of the Code, we can see constant lobbying for particular interests through the extension of tax benefits.

I emphasize that tax rules must be the same for all, and this must be stopped.

In the area of fiscal policy, I believe, the primary task is to improve tax administration.

In particular, it is necessary to simplify the procedures of tax administration for taxpayers, and reform the approaches and principles applied by the State Tax Service so that they were aimed at preventing tax law violations.

I demand that tax officers and other regulatory authorities cease pressure on business.

I expect the Government and Parliament to work together to define such provisions in the Code this year.

Dear MPs, Cabinet members, guests!

Among the priority tasks I put for 2012 is achieving a new quality of the state and of public services. Humaneness, honesty, and fairness are the foundation of this new quality.

First of all, the obsolete Soviet-era repressive rules of law governing the state-citizen and state-business relations must be finally cancelled.

Together, we have passed a revolutionary law on the decriminalization of economic crimes. I expect the legislators to urgently consider the new Criminal Procedure Code.

In 2012, we will continue shaping the national space of economic freedom based on mutual responsibility, honesty, and partnership between the government and business.

Deregulation of business will continue.

We will be gradually, but steadily, bringing the economy out of the "shadows". A new Customs Code should play an important role in this regard. I hope the Parliament will consider my comments to it, and approve the Customs Code in the near future.

At the same time, I am well aware of the numerous complains business has about the government actions, administrative pressure, inspections.

In January, I signed an instruction prohibiting such actions. Obviously, it is time to limit the powers of controlling authorities. The power of an official to decide to suspend a business must be taken away.

I believe only the court must be allowed to make such a decision, and only on the sufficient and proven grounds.

Also, we will soon start working together with you to ensure that police changed their attitude to entrepreneurs.

Separate issue is the quality of the civil service, officials’ honesty and humaneness when dealing with citizens. Last year, we adopted new legislation to combat corruption in the administrative system.

At the beginning of this year, I approved a new strategy of staffing policy until 2020 and new civil service hiring rules.

Administrative reform will continue in 2012.

Its main objective is to significantly reduce the bureaucracy representing central authorities on the ground, improve discipline and the quality of services at the regional level.

We will resolve these issues at the legislative level. I have made a legislative initiative submitting for your consideration the Law "On the Administrative Services." Its consideration by the committees is nearing completion, and I look forward to your support.

Deep changes are needed in the existing system of social protection. Albeit painful, modernization is a necessary process of change. Our common task with you is to prove to the people that changes really make life easier and bring real welfare.

I understand that the public is watching the government closely in its approaches to and decisions on the matter.

Therefore, when making changes, we have no right to worsen people's lives. At the same time, we have no right for "leveling", which is unfair to an individual.

This is why we should work out and begin implementing an effective and fair system of targeted social assistance this year. The country is no “barracks,” where all get a little of something evenly. Each citizen must feel that they and their families are cared for, and this care must be fair and well calculated.

In the area of pension reform, a basic law to reform the pension system was adopted.

It defined measures to stabilize the Pension Fund and the mechanism of transfer to the funded pension system.

However, in order to make Pension Fund’s budget deficit-free, introduce the funded pension system, increase pension benefits significantly to most retirees, it is necessary to pass laws this year concerning the:

• gradual redistribution of pension benefit contribution between the employer and the employee;

• improvement of the procedure of assignation and indexation of pensions, making the indexation conditions equal regardless of the law under which it was assigned;

• release of the PAYG pension system from unusual expenditures (including the financing of early and preferential pensions).

However, the main factor for stabilizing the Pension Fund and increasing general population incomes would be the Parliament adopting the laws on legalizing employment and income.

Elaboration of these laws depends on the adoption of the Labour Code. It is envisaged in the draft 2012 National Action Plan to implement the Program of Economic Reforms.

The 2012 State Budget increases the subsistence minimum for persons with disabilities from 820 UAH in January, to 884 UAH in December.

Also, the minimum pension will increase. We understand that this increase is far from being able to provide comfortable life to pensioners. However, as soon as economic growth allows us, we will raise social standards, and hence pensions.

Another important area is healthcare reform. It has started in 4 pilot regions.

However, lack of legal base slows down the pace of the reform.

Two laws were supposed to be adopted last year to develop a new edition of the foundations of healthcare legislation, which are the basis for emergency medical care and public healthcare facilities network development.

One of them is the draft Law on the National Emergency Care System. Some improvement of this system has already been made. Funding of medicine procurement for emergency medical care was increased.

Ambulances are bought for the pilot projects; the "Timely Assistance" national project was launched.

But this is not enough for citizens to feel radical change for the better. All the main positions regarding the establishment, financing, and management of such a system must be consolidated by the law. Only then will the changes become systematic.

Another important bill is the one on the activity of healthcare facilities, which will outline the format and financing principles for a modernized network of healthcare institutions.

Besides, the Committee of Economic Reforms and the Government are now developing strong social programs. I hope legislators will support these initiatives.

Reforms in the humanitarian sphere require special attention.

We cannot start reforms in certain sectors of the sphere without a clear general concept of these reforms and their legislative embodiment.

Higher education reform can serve as an anti example here. I repeat – an anti example. The Government has started reorganizing higher education before it determined with a new law, what should be its new principles of functioning, thus causing various problems.

Therefore, the Law on Higher Education is a priority. But it should not conserve the existing status quo. Radical transition to the autonomy of universities should happen, based on administrative and economic self-government, and the combination of education with scientific and practical activities.

Through the mechanism of government demand the education system should respond flexibly to the needs of the economy, so the universities and the employers should be in constant interaction.

Dear participants of the meeting!

2012 is the year of elections to the Verkhovna Rada of Ukraine. I understand that for each parliamentarian, every political party represented in the Parliament, it is a serious test.

For the first time in the last decade, we have a broad consensus on the electoral legislation approved in the fall of 2011. Therefore we have the opportunity to prepare for the elections peacefully, without upheavals and conflicts.

I would like to address the opposition factions – please, return to the Parliament. You cannot save the country on the streets – we all know that. Therefore, it is necessary to work on developing the state, on increasing the living standards – it is a duty of all the MPs, regardless of political colors or affiliation. I sincerely wish you that.

A halt in the state development, the prevalence of political shows and empty populist promises has become a bad tradition in the years of election.

So I think that we all need to take into account the features of year 2012, regardless of parties or flag colors, and make sure that the state does not end up in a “recess” during the elections. We should all work together.

It is this year, when our fellow citizens should feel that reforms bring change for the better, bring new conditions and new opportunities.

The parliamentary race should help the process. I expect the elections to bring a new quality of deputies, political tolerance, serious and productive discussions about the future of our country, hard and fruitful work.

In this context I would like to draw your attention to the President's decision to establish a Constitutional Assembly. I believe that the constitutional process is an extremely responsible task for us all.

For how long will the country’s fate continue to be determined at nighttime meetings? For how long this issue will be entrusted to individual political leaders?

I believe that the work on constitutional amendments should be done primarily by experts, scientists, civil society, and, of course, representatives of the people in the Parliament.

Constitutional process is not a one-time job for a year and it should be done openly and publicly. In addition, this work has a great educational function. Citizens should know, what kind of a state they are building.

Therefore, I call on you from this podium: do not allow the politicization of the process, trust science and civil society. We all need a new social contract, not banal new rules of political game.

In 2012, Ukraine will host the European football championship. This is an important and symbolic event that will open Ukraine for Europe and for the world in a new way.

At the same time, this event will again convince us of the inseparability of Ukraine and the European space. Our path to the EU has no alternatives. I count on lawmakers’ serious and productive legislative work to support the process of our integration.

In 2012, we will finally define the legal conditions of economic cooperation with our international partners, the foundations of creating free trade areas with the European Union and the CIS countries. I hope these matters will also find support of the Parliament.

Being up to date and moving ahead with the times, protecting the dignity and respect for each citizen – these are the guidelines that will allow us to successfully move in the planned direction.

I am convinced that we will become even stronger in 2012.

Thank you for your attention.

Official Website of President of Ukraine