De-mining and business can wait: why special funds are being cut for the sake of "Zelensky's thousand."

The Cabinet of Ministers of Ukraine has decided to reallocate the state budget expenditures for 2024 to fund the National Cashback and make a one-time payment of 1,000 hryvnias under the "Winter eSupport" program. An additional 3.8 billion hryvnias will be allocated for these initiatives.

It is noteworthy that the funds will be taken from programs supporting Ukrainian businesses and demining efforts. According to information published by Yaroslav Zheleznyak, a member of parliament from the "Golos" party, the government will reduce the expenditures in the special fund as follows:

• 99 million hryvnias will be withdrawn from the program "Partial reimbursement of the cost of agricultural machinery and equipment produced domestically";
• more than 1.76 billion hryvnias — from the program "Providing state support for the implementation of investment projects with significant investments";
• 2 billion hryvnias — from the program "Compensation for expenses for humanitarian demining of agricultural land".

The 1,000 hryvnias will be paid to the "National Cashback" card. Those who possess this card need to select the "receive 1,000 hryvnias" function in the "Diia" app. According to Denys Shmyhal, the winter support program for Ukrainians has three goals: to support Ukrainian families, boost domestic demand for Ukrainian goods, and unite society for victory over the Russian forces.

The state aid "Winter eSupport" is a one-time assistance aimed at residents of Ukraine. The program will operate from December 2024 to February 2025. The "Winter eSupport" funds can be spent until the end of 2025 on utility payments, purchasing medicines and books, medical services, education, transportation, mobile communication, and insurance.

Funds can also be used for charity, donations to the Armed Forces of Ukraine, or to purchase military bonds. Cash withdrawals from the "National Cashback" card are not permitted.

"Help IDPs": where to better allocate Ukraine's budget surplus

"The Cabinet acted out of populism rather than rationality and an understanding of the current situation. Why are funds being taken specifically from business support and demining programs? Perhaps there are no opportunities or desire to draw from other sources. Another reason is the presence of lobbying interests. Since there were no major players in the fields of demining and business support, they are emptying less interesting expenditure items," explains the economist.

"It would be better to prepare a program to assist low-income Ukrainians and help internally displaced persons. It is not advisable to take funds for such projects from more effective programs, such as business support and demining initiatives. Most likely, internal matters at the Ministry of Economy influenced this: they see which programs did not select contractors based on annual performance," the economist believes.

According to Hetman, the budget surplus could be spent on more important programs. Among them is "eRecovery," under which the state compensates for the costs of housing damaged or destroyed as a result of Russian aggression.

It is worth noting that in 2025, 4 billion hryvnias will be allocated for "eRecovery." Of the allocated funds, 3 billion hryvnias will go towards housing certificates for those who have lost their homes, while another 1 billion hryvnias will be directed to compensations for damaged property. Members of parliament have repeatedly acknowledged that this amount is catastrophically low.

"In terms of the operation of "eRecovery," we have extremely long queues for years ahead, and there is constantly a shortage of funds. Demining is also crucial for civilians, as it ensures the safety of the population living in areas liberated from Russians," added the expert.

Let us remind you that Ukrainians should prepare for an increase in military tax from 1.5% to 5%. The overall tax burden on income from bank deposits will increase to 23%.