Vice Prime Minister Pavlo Rozenko: If You Have a “Grey” Salary, Fear God — Don’t Apply for a Subsidy

Vice Prime Minister Pavlo Rozenko: If You Have a “Grey” Salary, Fear God — Don’t Apply for a Subsidy

“Stop Scaring People with Coal and Firewood”

Pavlo Rozenko is one of the few government officials who managed to carry over from Yatsenyuk’s government to Hroisman’s government. From December 2014 to April 2016 Rozenko headed the Ministry of Social Policy. His tenure coincided with the increase in utility tariffs and the introduction of the subsidy system. Even before the new Cabinet was announced, the official told Glavcom in an interview that he wanted to remain at the ministry and finish the reforms he had started. But events turned out differently.

Now (already as a vice prime minister) Rozenko has to oversee not only social policy but also health care and culture. In his new position Pavlo Valeriyovych sees himself, he says, as a coordinator and arbiter. He promises to support the ministers he supervises and considers them responsible for the activities of their agencies.

Share your first impressions of working in the renewed Cabinet. Have you already felt the difference between Yatsenyuk and Hroisman?

I’m not trying to look for differences between the two prime ministers or the two Cabinets. Every person has their own management approaches...

We already learned in your reception office that Volodymyr Borysovych likes to hold meetings at half past eight or nine in the evening. Arseniy Petrovych didn’t do that.

I wouldn’t put it that way. When I joined the government in 2014, we happened to be in the middle of the budget process: we sat on Saturdays and Sundays until midnight, until one in the morning. When a person gets into the work, such a rhythm is normal.

Hroisman wants to quickly get into the current activities of each ministry, work out strategic common tasks for each area with the team. We promised to do this when we approved the government’s action program. All of this must be ready by the end of May. So I welcome the intensity of work of the new prime minister.

“Ministers Are Responsible for the Activities of Their Agencies”

Have you already delved into the areas you now have to oversee?

I don’t need to particularly delve into social policy. We have a fairly constructive dialogue with the new minister (Andriy Reva, — Glavcom). We worked with him on the same problems for the last year and a half; we know each other well. We don’t need time to “get used” to each other.

Undoubtedly, the health care system is one of the most difficult topics. The situation is complicated by the absence of a minister. Meetings with the deputies showed that despite their fairly high level, there is a lack of shared understanding and a clear reform plan. It’s good that an acting minister was appointed, but that’s a temporary solution.

Therefore I call on the Verkhovna Rada to promptly resolve the appointment of a new minister of health at the next plenary week.

Explain why there was such a delay in appointing the head of the Ministry of Health.

I was involved in the negotiation process at some stages of forming the government. The candidate for minister of health had actually been agreed upon. I won’t name the surname — that wouldn’t be proper, although it was repeatedly mentioned in the media. Chronologically it was like this: as of Tuesday evening the candidate existed, but on Wednesday, at the coalition meeting where the personal composition of the Cabinet was determined, there was no candidate. Because that person, weighing the pros and cons, decided to remain a doctor. This person’s refusal of the post was a surprise to everyone: the government, the coalition, and even the president. Looking for a new candidate overnight from Wednesday to Thursday would have been wrong. Appointing just anyone to this post would have been irresponsible. So, so as not to delay the formation of the entire government, the decision was made to vote on the Cabinet’s composition without a minister of health.

What candidates are being discussed for this post now?

As of today there is no formal submission to the Verkhovna Rada of a candidate for minister of health either from the coalition or from the prime minister. I can confirm that the candidacy of Andriy Verba, who heads the military medical department of the Ministry of Defense, was discussed. I personally had several meetings with him. He is a professional in his field. But officially that candidacy has not been submitted to the Verkhovna Rada. Whether it will be submitted depends on the position of the coalition and the prime minister.

How do you see your work in the government? After all, in your vice prime ministerial “portfolio” you oversee three very different ministries.

Regarding the Ministry of Social Policy and the Ministry of Health, the situation is clear. As for the Ministry of Culture, there is an experienced minister whom I know well, and we are building normal relations.

I will have the same approach to all ministers who will work under my supervision. In me they will have support, a reliable shoulder. The main task of a vice prime minister is to ensure coordination of the activities of these ministries in terms of agreeing directions of reforms and certain disputed positions. Undoubtedly, ministers are responsible for the direct activities of their ministries. I understand and accept that. But when questions and differing positions arise during the process of work and implementing reforms, the vice prime minister steps in.

I myself was a minister, and back then I lacked the help of vice prime ministers to resolve issues that constantly arose with the Ministry of Finance, the Ministry of Economy, the Ministry of Justice, the State Migration Service, and so on. The government had only two vice prime ministers — Hennadiy Zubko and Vyacheslav Kyrylenko. They had a huge workload: they were both ministers and vice prime ministers, and they didn’t have enough capacity for my problems. So I tried to solve all my issues myself.

So, in your view, aren’t six vice prime ministers too many?

Look, our first vice prime minister is the minister of economy (Stepan Kubiv, — Glavcom). A vice prime minister is the minister of regional development (Hennadiy Zubko, — Glavcom). A vice prime minister for European integration (Ivanna Klympush-Tsintsadze, — Glavcom). To carry out intersectoral coordination, there aren’t that many people left — three vice prime ministers: Kistion, Kyrylenko, Rozenko. Whether that’s many or few is a philosophical question. The real question is: will this government be effective as a whole? If the government is effective, everyone will say the six vice prime ministers justified themselves; if it is ineffective, they will say they did not. I fully support Volodymyr Hroisman, who before his appointment said he does not intend to work in a government of losers. I will do everything to make this government effective so that all Ukrainians see and feel real positive changes.

There is an opinion that the post of vice prime minister is somewhat decorative...

Don’t distort this function like that. In all countries with governments there are posts of vice prime ministers — from 2-3 to 11-12. That’s normal. And in my position as vice prime minister I guarantee that I will be effective...

“Sometimes Even Papers Flew Over Heads”

How did the Ministry of Culture come to you? Initially the cultural portfolio was supposed to go to Vyacheslav Kyrylenko, who in Yatsenyuk’s government headed the ministry. Was the reshuffle caused by his obvious conflict with the head of the ministry, Yevhen Nyshchuk?

I wouldn’t say there was a conflict. But when dividing powers it was decided to allocate responsibilities that way. Perhaps that was a way to avoid unnecessary discussions and prevent tension in relationships.

Vyacheslav Kyrylenko’s coordination includes the Ministry of Education, the Ministry of Youth and Sports, and the Ministry of Information Policy. Although I am convinced everyone understands that Kyrylenko, as a person who has long worked in the humanitarian sphere, will still be involved in cultural issues — maybe not formally as a vice prime minister by the distribution of duties in the government, but certainly as a public and political figure.

I am convinced there will be no global conflicts or confrontations in the government.

But confrontations have already begun. We all saw how at the first government meeting Kyrylenko expressed dissatisfaction with Nyshchuk’s staffing initiatives at the Ministry of Culture. Glavcom also has information that Vice Prime Minister Volodymyr Kistion is involved in placing his people in ministries. And ministers are not thrilled with such insistence.

Indeed, there were some tensions at the first government meetings. But what do we have today? Totally calm and constructive work of the entire Cabinet. And ministers publicly and openly expressing their views is a normal democratic process. Believe me, earlier when Cabinet meetings were completely closed (and I’ve attended government meetings under more than one prime minister), even greater passions raged there. Sometimes papers even flew over heads. That doesn’t mean ministers become enemies after such discussions. On the contrary, we start to understand each other better. There can be different viewpoints and approaches; we need to argue and discuss them.

How far can vice prime ministers go in influencing ministers’ staffing policies?

A minister has the full right to form his own team. But I think it’s correct that when agreeing appointments, all candidates should be reviewed by the relevant vice prime ministers, because this is a responsibility we share with each minister. At least we should know the people we work with. After all, we vote to appoint these people at government meetings. There will now be competitions for posts of civil servants in central executive bodies. But there are posts, for example deputy ministers, where competitions are not envisaged, and the team will continue to be formed by the ministers.

What role is assigned to the Strategic Group of Advisors to the Cabinet, headed by Leszek Balcerowicz and Ivan Miklos?

These are people who can advise us, steer us, act as arbiters, and also become active providers in Ukrainian society of the ideas that will be developed in the Cabinet with their help.

“Stop Scaring People with Coal and Firewood”

Your proposal that rural residents give up using natural gas and look for alternatives provoked a flurry of criticism.

That phrase was ripped out of context as a standalone sentence and out of the whole program that lasted almost an hour. I was talking about energy independence. We now have a great chance to finally get off Russia’s gas needle — the country-occupier, the aggressor — on which we’ve been sitting for the last 26 years. Yes, de jure we were independent. But de facto our economy and all of us were dependent on the Russian Federation because of the linkage to their energy carriers, first and foremost gas.

What alternatives? Are you proposing that villagers who finally got gas cut down forests? Because we have problems with coal too.

There are always alternatives. I didn’t say that tomorrow gas will be cut off for everyone. Everyone understands that’s unrealistic. There must be a conscious choice by people and real help from the state. This should be a nationwide ideology that Ukraine builds its future as an independent state. But without a sharp reduction in gas consumption by everyone — both ordinary consumers and enterprises — it will be virtually impossible to move toward this goal. So our fixed idea — for both citizens and authorities — should be a sharp reduction in gas consumption and a full future transition to consumption of domestically produced gas.

The idea of introducing a market price for gas is one step. A person must think: do I need such an expensive energy carrier? We protect the poorest today through the subsidy system. But for people of average means, gas replacement should be a priority.

This must be a joint project of the individual and the state, which must assist them in this.

And stop scaring people with coal and firewood. Yes, there is firewood and coal. But there are pellets, briquettes, wood chips, peat, use of geothermal energy, wind, solar, hydro, and modern technologies that are much cheaper and more efficient than gas. Returning to wood stoves and mass logging are deliberate manipulations by the gas lobby and opponents of Ukraine’s energy independence. On the contrary, we must show people the way and help them with resources so they invest in modern energy-saving technologies.

I’ll give a characteristic example. People who use gas without receiving subsidies use it one and a half times less than those who have subsidies. That’s an indicator. We see that the subsidy system must be improved, and those who received subsidies must be stimulated to save energy. Within the volumes of gas consumed for heating individual houses, there is potential to reduce consumption at least by half by switching to alternative fuels. In addition to all these measures, we need to increase domestic gas production. If we achieve this, then by 2020 Ukraine will be fully energy independent.

“Commissions Will Not Go Door to Door and Inventory Your Property”

You recently said there were no queues for subsidies and that everyone who applied received one. Yet readers have complained to the editorial office that during the year they cannot get the subsidy itself or even an answer whether they will receive it.

Certainly there are isolated cases, I agree. Responsibility for this lies with specific local authorities that poorly conducted informational work. If someone is truly waiting a year for a subsidy — that is not normal. It means only one thing: the person was actually denied the subsidy for some reason, but for some reason they were not informed and were deprived of the opportunity to appeal this decision.

As is known, last heating season subsidies were received by 5,4 million families. After the single gas price was set from 1 May, experts estimate this figure will be about 8 million. So the 35 billion hryvnias budgeted for this will not be enough. Where will you get the funds?

Indeed, we forecast the number of families will grow to 7,5-8 million. But we clearly distinguish two categories of families. The first are those who already received subsidies, these 5,4 million. Starting from 1 May they will receive recalculation automatically. They no longer need to go to social protection offices, write applications, submit certificates, or stand in queues. This is a huge step forward in reforming the social protection system. Therefore we will not have the massive burden on local authorities as we did last year. There remain approximately 2-2,5 million families whom we expect to apply for assistance.

So will there be enough money for everyone?

The budget had planned 35 billion. According to the latest government decisions, amendments to the state budget have already been submitted to the Verkhovna Rada, adding 5,3 billion. That means this year more than 40 billion hryvnias will be allocated for subsidies.

By our calculations, these resources are sufficient to cover needs for 2016 year. But if we lack anything, we will immediately find resources to add.

Will inspections of living conditions be carried out for people who have received or will receive subsidies? Rumor has it that local officials will search for items worth more than 50 thousand hryvnias...

Such inspections are already happening. This is provided for in the subsidy appointment system.

But they don’t visit everyone. They only go to those who applied for additional, above-standard assistance. What does that mean? Subsidies are calculated for a certain housing area and social norms. But people usually live not according to norms but in the households where they have lived for a long time. To calculate a subsidy for the entire housing area, we must understand that this person is really needy. Yes, their apartment or house area exceeds the norms for which we give subsidies, but that person really needs help. Local authorities have the right, by commission decision, to grant a subsidy for a larger housing area in such cases. But they must be convinced that this is truly a poor person, a person with a disability, or a pensioner. That’s why commissions visit.

A second variant also occurs. Our regulations state that a subsidy is not granted to people who in the previous period made purchases totaling more than 50 thousand hryvnias. But, for example, a family had a large three-room apartment and parents and children moved into different apartments. They sell the large apartment and buy a smaller one, possibly moving into worse conditions. But still there’s a purchase for an amount greater than 50 thousand. The subsidy system is flexible in such cases. We don’t follow a blunt principle: well, you bought housing for more than 50 thousand, so you’re not entitled. Local administration commissions investigate: if the family is really poor, they may be granted a subsidy.

So commissions formed by local authorities go, check such cases, and decide on subsidy appointments. That’s a normal situation. Everyone must understand that subsidies are provided only to those who truly need assistance.

Imagine this situation: I bought a camera I need for work for 50 thousand hryvnias and applied for a subsidy. Will such purchases be checked? And how?

You understand yourself that proving such purchases is impossible. Proving that you bought the camera this year and not last year or earlier is impossible. Proving it cost more than 50 thousand is also practically impossible. You can say you bought it at a flea market or secondhand. They will not go through apartments, overturn everything, search and inventory property values. We check purchase information only by data from the State Fiscal Service. And the function of social services is to help people, not to run around peeking through the keyhole.

But every person must be responsible on their side. If you have significant undeclared salary or substantial shadow income, fear God — don’t apply for a subsidy, pay the full cost of services. Let state support go to the truly needy.

How many inspections were conducted last season? And how many service workers were involved?

We don’t set inspection plans, we don’t check and systematize such information. It is not our task to chase people and limit their rights.

“Creation of a Unified Database of ‘Subsidy Recipients’ Will Be Implemented”

Do you see a problem in the absence of a single register of subsidy recipients?

We do not have centralized management in the field of social policy. The Ministry of Social Policy has no “vertical,” no territorial bodies. Subsidies are processed by local authorities — the respective departments of city councils and district state administrations. At the same time we have a mechanism that allows us to perform constant verification of the subsidy system, when databases from the base level are lifted up to the ministry and the information is processed. This is done monthly. Also, historically local authorities have used 4 or 5 different programs to calculate subsidies. Despite this variety, our information systems still “play” with each other. Although the creation of a single database is the right idea and will definitely be implemented.

A certain number of years ago the World Bank already allocated a very large sum of money to create such a system. What was that spent on?

The World Bank project was “successfully completed” back in 2012. “Successfully completed” in the sense that the funds were spent, but the system was not completed.

The main reason previous officials — ministers of the previous criminal regime who worked on this issue — gave in reports was that in 2011-12 the Ministry of Finance did not include in the state budget the expenditures needed to complete the work, in the amount of, if I’m not mistaken, 70 million hryvnias. Those funds from the state should also have been intended for putting the system into operation. Whether that is true or not — appropriate law enforcement agencies must work on this. I know the Security Service and the Prosecutor General’s Office handled this issue and numerous audits were conducted.

But the amounts were not small. It seems the sum was 300 million dollars.

That amount was allocated not only to create the information system. It was a multi-component program. Through that program social protection offices were re-equipped by creating a unified technology for receiving citizens. Funds were invested in technologies to make social service offices accessible for people with disabilities. We had cases where social protection offices were located on the 2-3 floor, which a wheelchair user physically could not reach.

Likewise, the new World Bank project launched in 2014 aims to refine or create a new unified information system for social protection. Of the 200 million dollars allocated to Ukraine by the World Bank, 100 million after meeting certain social reform indicators will go directly to the state budget. And about 40 million will be allocated to improving the old or creating a new information system. The project is at the launch stage. When I was still minister, a technical task for the information system was being written. The new minister is now handling the process. I am convinced this World Bank project will end with the creation of a unified information system that will combine all the registers held by social protection offices, the Pension Fund, and so on.

Does the absence of such a register really allow “active” citizens to receive multiple subsidies on one passport? Have such cases been recorded?

There is no basis to say that. We have an established clear mechanism for checking these payments. Now many talk about verification of social payments carried out by the Ministry of Finance. There was great distrust that we could not track pension payments ourselves or that we were interested in people receiving double or triple payments. We already have the first results of the Ministry of Finance’s verification. After analyzing 13 million pension files, double payments were found — zero; “dead souls” (pension payments to deceased people) were found in about 80 (!!!) cases. I emphasize: 80 cases per 13 million pension files. But even that information was not confirmed. As it turned out after checking such cases, no payments were made — i.e., zero. The Pension Fund also does not have a centralized single register; it has regional ones. But that doesn’t mean we sat and did nothing, closing our eyes to double payments. No — over a year and a half together with the new team of Pension Fund leaders we did colossal work and independently verified social payments and Pension Fund payments. And now, after the Ministry of Finance’s conclusions, I want to look in the eye those “experts” and “analysts” who for the last six months smeared our team with dirt and spun tales about 15-30 billion hryvnias of pension funds supposedly paid to “duplicates” and “dead souls” in Ukraine.

How is the problem being solved when Kyiv monopolists “Kyivenergo” and “Kyivgaz” arbitrarily deprive Kyiv residents of subsidies for their services? These companies sometimes ignore social protection decisions on providing assistance, and people receive bills where zeros are listed instead of the subsidies assigned to them. Meanwhile, these monopolists receive state subventions to compensate for subsidies to their consumers.

These are manipulations carried out not by social protection but by energy companies. It is illegal activity and an attempt to extract more cash from people. We try to respond quickly and promptly to such facts. In general, these are functions of the National Commission for State Regulation of Energy and Utilities, and we forward such facts to them.

Moreover, these are not isolated incidents. For example, there were mass cases when representatives of these companies went door-to-door in houses with individual heating and scared people that their subsidies would be taken away if they didn’t burn the full norm of consumption assigned to them. They were simply mocking people. People believed them, opened windows and doors, and used gas they didn’t actually need. Only after we intervened, when I repeatedly addressed people through the media, saying they should not burn anything and that no one would take away their subsidy, did the situation stabilize.

glavcom.ua