During a debate on the Bill on The State Budget for 2020 on November 15, Prime Minister Nikol Pashinyan accused the Bright Armenia Party of “choking them with terms” and opposing the raising of salaries and pensions.
“From January 1, 2020, as a result of tax amendments, the wages of 230,000 people will rise. Considering how many people’s salaries, pensions and benefits have increased in the Republic of Armenia since July 1, 2018… A huge number… But what does our opposition say to us today? It says “What a shame! You are breaking the fiscal rules.” Come translate what you say. What do you say? Don’t raise wages, don’t raise pensions, don’t raise benefits? So stand up straight and say that. Why are you using scientific, academic… You use certain words so that no one understands what you say. Bright Armenia Party, stand up and say that you are against raising salaries and pensions”, Pashinyan said.
Following the prime minister’s speech, MPs from the Bright Armenia faction insisted that the draft budget was presented in violation of the law, and the prime minister was trying to divert public attention from the violation of the law through manipulations.
The Fact Investigation Platform has tried to figure out whether the draft budget plan is really problematic, and if so, what kind of violations we are talking about.
What does the NA Bright Armenia faction accuse the government of?
During the discussions of the 2020 draft budget in the National Assembly, Chairman of the NA Standing Committee on Financial-Credit and Budgetary Affairs Mane Tandilyan stated that she could not but speak about violations of the budget system law.
“Mr. Janjughazyan, I have spoken in various formats. Article 18 provided a unique guarantee that environmental projects will be implemented to the degree that Armenia, which I consider to be in an environmental disaster, and is the 14th worst country with dependence on mining, following some African and Asian countries, you have no plans that would provide for the provision of the budget system law. And by doing just a couple of projects worth 16 billion instead of 54 billion, we simply do not solve the problem of environmental protection”, the MP told Atom Janjughazyan in the National Assembly on November 14.
According to Mane Tandilyan, there is inconsistency between the 2020 State Budget Program of the Ministry of Environment and the Law on the Budget System. Less money has been allocated to environmental projects.
Mane Tandilyan, Head of the Committee on Financial-Credit and Budgetary Affairs, also raised the issue of breaking the law during the discussion of the 2020 state budget in the NA committees and questioned the further tenure of Minister of Environment Eric Grigoryan.
Minister of Environment Eric Grigoryan countered that there is a need to clarify this provision on the budget system. In response, Tandilyan stated: “If you are not ready to implement these projects, I am sorry but the expediency of your tenure raises questions for me.”
Was there a violation of the law?
Article 21 of the Law on the Budgetary System sets out the requirements for preparing the Draft of the State Budget.
Paragraph 4 of Article 18 of the same Law (State Budget Expenditure Directions) states that “The expenditure foreseen in the state budget for environmental projects for each year shall not be less than the sum of environmental and utilization payments of the second budget year preceding that year, and from 2020 onwards, the sum of actual budgetary revenues from environmental tax and utilization fee payments.”
In 2018, the amount of environmental taxes and utilization fees paid to the budget was 54.2 billion AMD, and, in fact, no less than 54.2 billion AMD should have been allocated for environmental projects by 2020 state budget. Meanwhile, the state budget program for 2020 has allocated only 16 billion AMD for environmental programs. 1.9 billion AMD was allocated for forestry and 13.7 billion AMD for environmental protection.
It means that about $ 39 billion less was allocated for environmental programs, which is a violation of the fiscal rules set by the law.
It should be noted that according to the Law on Budgetary System, this rule related to environmental programs is one of the fiscal rules established by law.
The violation of the law has nothing to do with raising salaries and pensions
And what the violation of such a law has to do with the rise in salaries and pensions, as Prime Minister Nikol Pashinyan declares, is not clear. The prime minister may mean that the 40 billion cut in environmental protection spending is actually directed to raising salaries and pensions in violation of the law, and in other words, he says, the goal justifies the violation.
Thus, it is obvious that the Prime Minister has distorted the question of the opposition Bright Armenia faction, which did not in any way relate to raising salaries and pensions. And Mane Tandilyan’s statement that the provision of the Law on Budgetary System has been violated is true.