FEDERATION OF TRADE UNIONS OF UKRAINE
To the Verkhovna Rada of Ukraine
To the Cabinet of Ministers of Ukraine
To the associations of employers
To the business associations
On social protection of the population in face of rising prices and tariffs
On 04/27/2016, the Cabinet of Ministers of Ukraine adopted the Decree No. 315 ‘On Amendments to the Decree of the Cabinet of Ministers of Ukraine No. 758 of 1 October 2015’ which increased gas price for population almost twice since 05/01/2016, installed it on the market level and lifted the rate of consumption of natural gas at discounted price.
The increase of natural gas prices has triggered the NCSRESU’s decisions to increase projected tariffs for heating and hot water in 1,8-2,2 times and will cause further rise in prices and tariffs on other goods and services, and therefore rising inflation over 12% foreseen by the State budget of Ukraine for 2016.
According to the FPU’s calculations, increase in gas prices and tariffs for housing and municipal services in the current year will increase spending on essential goods and services at least 1.4 times, while the cost of utility services will increase by 1.8 times.
Adopting the decision to raise gas prices, the Government said that the current system of subsidies was protecting the households from sharp drop in living standards.
However, the FPU says that the measure of effectiveness of social protection should not be how many millions of households the Government will provide with subsidies and social benefits, and how many people will not need it, because they have sufficient income to ensure their constitutional right to the decent life through their work.
However, due to inadequate growth of the households’ income with the large-scale growth of prices and tariffs, nearly three-quarters of the working population will fall officially to the category of recipients of subsidies.
The present country’s social security system does not provide adequate support to the population, since it is based on the artificially low living wage, and therefore minimum wages and pensions are too low. The official value of the living wage on average per capita set in April 2016 by Article 7 of the Law of Ukraine ‘On the State Budget of Ukraine 2016’ is understated compared to the actual living wage per capita calculated by the Ministry of Social Policy under the law in force by 1,166 UAH or by 87.7%, and to 1,182 UAH or by 85.8% for the able-bodied persons.
The FPU is receiving many letters from trade unions, trade union associations and trade unions of all levels about inadmissibility of making such reckless anti-social decisions that will lead to mass poverty, to increase social protests and to transform the state into a social bankrupt because of inability to finance growing social obligations.
The FPU urges the Verkhovna Rada of Ukraine to hold parliamentary hearings in order to discuss feasibility and validity of sharp rise in gas prices for the population, adequacy of the Government’s measures of social protection in order to prevent decline in living standards of citizens.
Instead, primarily the trade unions suggest to make an immediate adjustment of the State budget of Ukraine 2016 in order to establish since 01/10/2016 (before heating season) the minimum wage and minimum pension at the level no lower than the actual living wage in prices of September that is 3,861 UAH and 2864 UAH accordingly.
The FPU urges the employers of Ukraine to support the workers financially by the highest possible wage increase given resulting savings in real payroll of reducing rates of single social contribution and income from economic activity.
If the Parliament and the Government reject trade union proposals, the FPU, along with other trade unions members of the JRB of trade unions, will take all possible measures not prohibited by law, to ensure the citizens’ legal rights of Ukraine on decent work and decent standard of living for themselves and their families.
- The FPU proposals on priority actions of the Government in order to ensure the citizens’ constitutional rights.
- The draft Law of Ukraine ‘On Amendments to Certain Legislative Acts of Ukraine Regarding Procedure for Establishing Minimum Pay Guarantees’.
FPU President Grygorii Osovyi
25/05/2016 No. 05/01-15/592