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Транспорт стане, а комунальники не отримають зарплат? Хто довів бюджет до катастрофи

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News and Commentary

Ukraine’s Budget Shortfall and Local Service Disruptions

Ukraine’s budget shortfall has led the government to suspend some non-priority spending. However, Treasury restrictions are affecting more than capital projects: municipalities say they are disrupting essential services. The report argues that the crisis has been worsened by delayed parliamentary votes.

Why the Budget Is Under Pressure

The report cites two main factors:

  • Damage to tax revenue: Russian attacks have damaged major sources of tax revenue, including metallurgy, grain exports and retail. Tax receipts were nearly UAH 50 billion below expectations over nine months, with about UAH 32 billion of the shortfall occurring in August and September.
  • Slower international support: The Finance Ministry had budgeted for an average of $4.5 billion in support per month but received around $1.5 billion. The report links delays in aid to Parliament’s failure to pass required legislation.

Parliamentary Delays

MPs took a 26-day break while key measures needed to unlock assistance remained unapproved. Several votes failed or were delayed, including measures tied to EU funding and the selection process for members of the Accounting Chamber.

The report argues that these delays were avoidable and criticizes MPs for putting political interests ahead of urgent budget decisions.

Effects on Municipalities

Although the government announced a pause on non-priority capital spending, local authorities say Treasury payment restrictions are also holding up payments from community accounts. The report says UAH 971 million across roughly 2,300 payment orders had been blocked.

Affected payments include municipal sanitation and transport services, putting some utility workers’ wages at risk. Cities have reported cutting public transport trips, suspending rubbish collection, struggling to buy fuel and being unable to pay contractors.

The restrictions are also complicating preparations for winter:

  • In Ternopil, a heating utility had reportedly gone weeks without payments and was struggling to pay staff and suppliers.
  • In Lviv, contractors were reportedly continuing work using their own funds.
  • Local officials warned that late-payment penalties or interruptions to electricity and gas supplies could add to the problems.

Payment Rules and Calls for Action

Treasury payments are governed by rules that set spending priorities. The report argues that the restrictions have been applied so broadly that they are affecting essential municipal services and some externally financed projects.

The Association of Ukrainian Cities has called for the restrictions to be lifted and for Parliament to pass the measures needed to release international funds. According to the report, approval of four outstanding items could unlock a delayed EU macro-financial tranche of $4.26 billion, helping cover spending through the end of the year.

Conclusion

Russia’s invasion is the underlying cause of the economic strain. However, the report concludes that parliamentary inaction, weak communication and unclear or overly broad payment rules have intensified the consequences for residents and local services.

Presenter and Contributors

  • Valeriia Pavlenko — presenter and reporter
  • Roksolana Pidlas — chair of the parliamentary budget committee
  • Oksana Prodan — adviser to the head of the Association of Ukrainian Cities
  • Vladyslav Stemkovskyi — Ternopil deputy mayor
  • Serhiy Marchenko — Finance Minister, cited from an interview
  • Andriy Sadovyi — Lviv mayor, cited via a public post

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