Yesterday the National Assembly was discussing the bill on the peculiarities of the formation of the 2010 budget draft presented by the government. By that bill the government suggests that there should be no agenda on mid-term expenditures for 2010-2012. They suggest that the state doesn’t plan in advance how much money will be collected for the coming three years and it shouldn’t be planned how much money should be given to each sector. This suggestion is connected with the continuity of the global financial crisis. “Now many countries of the world are correcting their budgets for half a year. And even now they don’t know what the influence of this correction will be due to the crisis. How can we plan anything for 2012? It doesn’t make sense to plan anything at this because you never know what the impact of the crisis will be for the coming three years,” said the deputy-minister of finances Pavel Safaryan. “Any state budget allows for sequester. If we fail to realize the tax revenue targets this year we do not rule out sequester. The question is whether there will be sequester or not,” Safaryan told reporters. Safaryan said budget sequester is possible in case of problems with tax revenues to prevent additional debts. He stressed that the present carry-forward is not budget sequester, but redistribution of the budget. Safaryan also pointed out that the Government is now thinking of compensating for the arrears of revenues due to other funds, for example, the Russian credit. This is the second major change in the budgetary policy of our country, which has been undertaken by the government. The first change related to moving 131 billion AMD of the budgetary expenditures to the 4th quarter. It is already known that as of the first half of the year the budget filling failed by 30%. In these conditions it seems that the government will sequester the budget instead of redistributing expenditures. Does the government actually implement sequester of the budget and simply avoids to use that word audibly? “I just want to understand whether people enjoy it when they use the word sequester. They sequester when they have a problem for the part of revenues in order not to accumulate debts. The easiest thing is sequester. They just say enough revenues were not collected and so expenditures should be cut. But in the aspect of financial management we should measure it in the reality and try to understand its expediency. In order you to enjoy the word sequester let me say that it is possible in any case. I have worked in the ministry of fiancés for 12 years and it was possible to sequester any budget,” disagreed Safaryan. Nevertheless, is the government sure that it will comply with these expenditures by the end of the year if those are pushed forward for the year? “If we were sure that we’d comply with those expenditures we wouldn’t delay. We have delayed because the government thinks in two directions. The first option is that the revenues, which were not received, may be substituted by other funds, such as international loans, credits. Perhaps you know about the Russian loan. If the tax service doesn’t levy taxes there is opportunity for sequester. Sequester is a “scissors” solution but at present we are trying to take more flexible steps,” says Safaryan.
