15 November, 2012

Interview with Nodar Khaduri, Finance Minister


Five residences, three airplanes, motorcade of plenty of cars – from the next year the President may not be able to use all this because according to 2013 budget bill, the financing will be reduced from 50 to 10 million. Financiers’ team of the new authorities is planning to introduce the policy of ‘tightening the belts’.

Nodar Khaduri: On September 30, 2012, one day before the elections, old government of Georgia presented to the Parliament for

consideration a draft budget of 2013, in which social programs are not foreseen; there is no mention that the social  programs financed by Tbilisi Mayor’s office must be financed by the state budget. Accordingly, on September 30, former government members didn’t think about it. Now I’ll tell you the most interesting story: on October12, 7 days prior to the Premiere’s order, deputy Tbilisi Mayor sends a letter to the city council requesting to withdraw the sums assigned for the social programs from the city budget. After this the Premiere Merabishvili with his illegal order made this decision of Mayor’s office ‘legitimate’. The Mayor’s office will have to fulfill its obligations. To this end, every year we give them GEL 450 million from the budget. It would be better if they used this sum according to intended purposes.

Q. – That is, the Mayor’s office spent the money not for specific purposes?

A. – Tbilisi Mayor’s office punished inhabitants of Tbilisi for supporting the ‘Georgian Dream’.

Q. – According to the draft budget, financing of President’s fund is considerably cut, although it’s a fact that the President’s administration has already started saving of money; for more than a week the fa?ade lighting of the President’s palace is off.

A. –President of Georgia has five residences, three planes and a motorcade consisting of several dozens of cars. President has lots of expanses; five different organizations finance them from the budget. Electric current expanses of only one building of President’s administration cost GEL 800.000 a month.

We are not such a rich country as to have this type of expanses. But we haven’t decreased this year’s financing of the President - his administration is financed as usual, as before. As for the decrease of the President’s fund next year, there is one explanation and one argument: there are two reserve funds – one of the government, not the Prime Minister and the other – of President. The fund for government is managed by the government as a collegiate body and the other – by one person, the President. There are a lot of misused expenditures of this fund. For instance, the musical ‘Keto and Kote’ cost the state budget GEL 2 million 125 thousand, for Andrea Botticelli’s concert in Batumi the President’s fund spent GEL 2.4 million. Unfortunately there is a rather long list of such expenditures.

We think that all the expenses, from the President’s as well as government’s fund should be transparent and every instruction must be published in order to let the people know how much is paid and for what purposes.

According to very rough calculations, for the last three years about GEL one billion was sent down the drain. The Mayor’s office is whining that they cannot cover bus passes of dwellers of Tbilisi, neither social privileges but they squandered GEL 1 billion.

Q. – Will concrete people be made responsible for this?

A. – Of course.

Q. – Who do you mean?

A. – I’m not a prosecutor. It’s the Chief Prosecutor of Georgia’s prerogative.

Q. – Financial inspection that’s underway at the Public Broadcaster is a rather topical issue. ‘PalitraMedia’ has been through it during the previous authorities when very soon after the May 26 events the revenue service simultaneously entered 6 different entities for inspection and it continued for almost 6 months. International and local NGOs, diplomatic corps, media were watching closely that the financial inspection was carried out in accordance to legislation. Hopefully the same attention will be displayed to Public Broadcaster as well.

A. – Today when the President declares that he won’t forgive anybody who oppresses media I think for myself - was it somebody else who arrested ‘Maestro’ and ‘Global TV’ antennae and not Bezhashvili, currently MP and by that time head of Control Chamber? Or maybe it wasn’t Sakvarelidze, currently MP and then – Deputy General Prosecutor?

During two years Public Broadcaster accrued budget debt of GEL 3.8 million. Just like this, very stubbornly they weren’t paying taxes. When the Revenue Service absolutely groundlessly was inspecting ‘PalitraMedia’, when ‘Kavkasia’ TV Company was arrested for GEL 2.50, Public Broadcaster has debt of GEL 3.8 million so shall not we inspect it? Gia Chanturia, Head of Public Broadcaster declared that there may be some shortage of main funds. It’s a very important issue. Every year about GEL 30 million is allocated by state budget for Public Broadcaster, they have income from Ads, they pay no taxes, buy equipment and then they ask why we take into account the equipment that might not be there. So what shall we do, not take into account the equipment? Shall we make a present?

Q. – It was said that they’d pay the budget debt.

A. -  If they had money, they could pay but it doesn’t mean that inspection will stop. We won’t make any hindrance in their work. It’s on the contrary -they are following our employees everywhere obstructing them. For our employees to work in presence of TV cameras is working under pressure; but we asked them to take it with understanding because they were inspecting Public Broadcaster, a very significant organization, where freedom of speech must be observed.

The program of risk-management displayed that this organization was to be inspected and when heads of the Revenue Service came to me to agree the details I told them in this regard not to come to me again. If there is a risk of not paying taxes, it doesn’t matter whether it is Public Broadcaster or not, financial inspection must begin.

I understand that this became an issue of political speculations. By the way, very soon after the elections, on October 5, three other TV companies were pardoned of rather solid sums. According to Merabishvili’s and Khetaguri’s decision, ‘Rustavi 2’, ‘Imedi’ and ‘Real TV’ were granted financial amnesty.

Q. – I’d like to ask you about 2013 budget, besides the President whose financing will be decreased and whose – increased?

A. – We are cutting administrative expenses; Finance Ministry is the first to undergo this and not because we are busy with self-flagellation but in order to increase financing of those areas that enjoy more priority. Cutting won’t touch upon the Ministry of refugees and resettlement; on the contrary, we are doubling the sum. Former government allotted for this Ministry GEL 24 million and we are increasing it to GEL 48 million. We’ll increase financing of Ministry of Healthcare and Social Protection in order to help them implement the two programs that is our pre-election promise. This is general insurance and increase of pensions. Education and agriculture will see the budget increase but the latter won’t get additional GEL 1 billion as many people think. In pre-election program of ‘Georgian Dream’ it’s written that there will be GEL 1 billion inflow from private investments. Through state means financing of agriculture will be increased by GEL 100 million.

Believe me, after several years agricultural lands will have the price of gold and I guarantee you that in several years Georgian agriculture will flourish. Nobody will ask or wish to plough and sow without paying; but at the beginning we’ll provide help from the fund of agriculture development. These are the areas where financing won’t be cut, as for the others – we have to tighten our belts. We won’t build Parliament in Kutaisi; it will continue functioning in #8, Rustaveli Ave. This property is returned to the state.

We won’t build new House of Justice in Lazika for the frogs but by all means, we will reinforce ports, roads and other infrastructural projects throughout Georgia.

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