Date:2010 February 24, 12:05
9. (U) Below is Pynzenyk's paper on priority reform for the
new government.
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Pensions:
1. Pension age increase (currently pension age is 55 for
women; 60 for men).
2. Abolish special pensions
3. Limit pensions to working pensioners
4. Set pension age for military to age 60.
5. Abolish norm of retirement prior to pension age.
Energy Sector:
1. Imminent increase of gas prices for households 2 times;
additional 50% increase on July 1. Cancel Government
Resolution requiring Trade Unions' consent for gas price
increase.
2. Immediate increase of gas price for heating entities
50%; additional 30% by July 1.
3. Electricity tariff increase by 40%.
4. Privatization of all coal mines and cancelling of all
subsidies to coal mining sector.
Benefits:
1. Elimination of benefits for communal services,
transportation, etc.
2. Elimination of government support for birth assistance,
free meals and school books. (Families should pay.)
Communal Services:
1. No new tax benefits.
2. Limit Single Tax Payers (STP) status.
3. Cancel special VAT regimes for rural areas.
4. Cancel VAT exemptions for pharmaceuticals.
5. Increase Excise tax for gasoline; increase auto-owners
tax by 50%; unify excise tax.
6. Cancel double taxation treaty with Cyprus (today it is
zero.)
Rural Issues:
1. Cancel moratorium on land sales.
2. Ban subsidies for pork and chicken meat.
Public Administration:
1. Reduce size of government to 14 ministries. One deputy
prime minister. Abolish Minister of the Cabinet of Ministries
position. Eliminate 6 ministries.
2. Subordinate all government entities to ministries (for
instance, the Tax Administration, Customs Service, State
Property Fund -- to MinFin.)
3. Limit extra payments to government officials.
Other Social Funds
1. Temporary subordination to the government.
2. Cancel free tours for vacations.
3. Cancel any subsidies to businesses.
4. Unemployment subsidy payable only after minimum of 6
months of employment.
5. Introduce sick leave payment at 70% of income, but not
less than subsistence level.
6. Sick leave payment starting only from 3rd day of leave.
7. Money saved from above should go to the Pension Fund.
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