The final discussion of the draft “On the State Budget of the Republic of Armenia for 2018” launched at the National Assembly.
The main rapporteur, the RA Minister of Finance Vardan Aramyan informed that one parliamentary faction and several deputies had submitted 111 proposals, as well as the RA Government had presented a proposal based on the new information and circumstances which occurred after the first reading.
Minister Vardan Aramyan presented the proposals and noted that most of them are related to the socio-economic situation of the country and the issues of community significance which would be referred to according to priorities taking into account the existing budgetary restrictions.
The other part of proposals, according to Aramyan, is on increasing the financing of different spheres, whereas program directions are not outlined. He stated that the budget is formed with clear program provisions.
The other direction is the group of various proposals regarding the economic policy. There were also some suggestions directed to the increase of financing of this or that program without dimensionality. Aramyan mentioned that there should be strictly measurable amounts for each program.
“What about numbers, we have received one suggestion to increase the taxes by 4.6 billion which refers to royalties”, - said the Minister and added that according to him AMD 23 billion programed in 2018 budget is strictly realistic.
The proposals in terms of expenditures amounted to AMD 16.4 billion.
After presenting the proposals of the NA deputies and the parliamentary faction, the RA Minister of Finance introduced the suggestions of the RA Government which comprised AMD 15 billion of total volume.
- The first part of amendments is related to the exchange rate: about AMD 5 billion from 15 billion is conditioned by the issue on exchange rate changes. According to the RA Law “On the Budgetary System”, during the first reading the draft budget was presented with the exchange rates as of September 1. During the second reading, according to the same law, certain adjustments were made on the basis of the current exchange rates as of November 1. AMD/USD and AMD/EUR exchange rates increased by respectively AMD 5 and AMD 12 which resulted in the demand of AMD 1.5 billion.
- The second group of amendments refers to “Armenia” detachment. The financing of the detachment was increased by AMD 1 billion which derives from both the issue on border security and Armenia's obligations under international treaties.
- The third major component is the increase of expenditures of the State Committee of Water Economy by AMD 1 billion 289 million conditioned by the raise of water tariff by AMD 11: “We will go on step by step: in 2018 the subsidy will be provided so that the AMD 11 increase will not be a problem, and in 2019 we have homework to do and our activities will be more targeted. Special order and mechanisms will be defined for socially insecure people in order to give the subsidy particularly to that class”, - said Aramyan.
- The next component is the financing of AMD 7 billion provided to the Government Staff. Minister Aramyan noted that as a result of constitutional reforms the newly occurred changes should be taken into consideration as well.
- The fifth and one of the largest changes is in the sphere of healthcare. The NA deputies presented 19 suggestions in this respect, 10 of which were adopted in full, 6 in part, and clarifications were given for 3 of them. Financing of AMD 4 billion was added: about AMD 9 billion is intended for outpatient services, of which AMD 1.5 billion is meant for medical services of a general nature (polyclinic services expenses). Minister Aramyan clarified that during the first and second readings the funding sources were visible, which enabled them to make these changes. He added that by the decision of the Government, the process of introduction and development of electronic healthcare is taking place which gives the opportunity to more accurately identify the services provided to the population, to make them more targeted and efficient, to avoid possible qualitative and other shortcomings.
About AMD 179 million was allocated to professional medical services, most of which are intended for hemodialysis funding. AMD 1 billion was provided to the provision of medical services in socially insecure and special groups.
Vardan Aramyan also informed that the reserve fund was increased by AMD 4 billion since additional costs may incurre in the end of constitutional reforms as well as a number of important events are envisaged to take place in 2018.
Summarizing the draft report, the RA Minister of Finance informed that the budget for 2018 is based on 6 pillars. The first pillar is macroeconomic stability, the basis of which is the stability of public debt. The second one, according to the Minister, is security. “You won’t find a country in the world where there are security risks and the private sector makes investment, creates jobs. Therefore, an important pillar is the increase in security costs that the Government has implemented”, - he mentioned. The third pillar is investments in infrastructures; the fourth - balanced revenue collection. According to Aramyan, if we want to improve the cumulative tax rate/GDP by 1 percentage point in two years, we must do it on a strictly balanced basis. The fifth pillar is the solution of social issues through economic activity and the sixth one, according to Aramyan, is a more purposeful implementation of expenditures.