Budget 2026 and Government Composition: How the Political Crisis Affects the Work of the Verkhovna Rada

On December 3, the Verkhovna Rada is considering the draft budget for 2026. It was formulated under the former Head of the Office of the President, Andriy Yermak, and several factions and groups have raised questions regarding the draft.

Due to the political crisis, the state—which is currently defending its sovereignty in the Russo-Ukrainian war—lacks a consensus budget. As a result, the Ministry of Finance is conducting consultations with various political forces. Even today, People’s Deputies are uncertain whether the draft budget will even reach the floor for consideration.

Currently, discussions revolve around teacher salaries, the 64% PIT (Personal Income Tax) allocation to communities, and whether funds should be allocated to the “United Marathon” (state-backed TV broadcast) and new railway cars. There is also a dispute over who should receive more funding: the Bureau of Economic Security (BEB) or the State Bureau of Investigation (DBR).

Furthermore, following Operation “Midas” conducted by anti-corruption authorities, the issue of government composition has become acute. Deputies are discussing who will lead the Ministry of Justice and the Ministry of Energy following the dismissals of Herman Halushchenko and Svitlana Hrynchuk.

Government Turbulence: Why the Instability?

Regarding the government situation, Yulia Sirko, Deputy Chair of the “Holos” (Voice) parliamentary faction (formerly Klymenko), notes that Ukraine is currently facing a political crisis:

Yulia Sirko

Deputy Chair of the "Holos" Faction

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It is possible and necessary to exit this crisis, but it will take time and the political will of the Office of the President and the 'Servant of the People' party.

Oleg Kulinich, head of the “Dovira” (Trust) deputy group, emphasized in a comment to the “Holka” civic initiative that personnel issues will not be easy:

Oleg Kulinich

Head of the "Dovira" Deputy Group

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We will not support anyone until we meet with the candidates intending to head either the Ministry of Justice or the Ministry of Energy. Without a meeting with us, we will not vote for anyone. These are serious personnel matters, and these individuals must be prepared for a Q&A format. What will happen with the energy sector? What is the vision? The same applies to the Ministry of Justice.

Lyudmyla Buimister, a People’s Deputy who was elected as a majoritarian candidate from the “Servant of the People” in the capital but is currently a member of the “Batkivshchyna” (Fatherland) faction, highlights that government appointments under current conditions are a major challenge:

Lyudmyla Buimister

People's Deputy

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As a Honored Power Engineer of Ukraine, I can say that no professional wants to take the position of Minister of Energy. Since 2019, so-called reforms have stripped the ministry of all powers—'Energoatom,' nuclear safety, the ability to control the forecast balance, etc. Additionally, this and other ministries have been repeatedly merged only to be separated later. This isn't just about changing a sign on the door. The staffing structure, headcount, and schedules change. During such upheavals, we lose the best personnel because people join the state apparatus expecting stability, but instead, they face constant volatility. So, there is a crisis with personnel in the ministry as well. With infrastructure completely destroyed by Russian attacks, and without real powers or the political will of the state's top leadership, no rational person will take such a position. Therefore, only the ignorant and populists are in line—a perfect cocktail for a corrupt official.

It is worth noting that the government merges and separates ministries quite frequently. For instance, at the start of the term in 2019, the Ministry of Culture was merged with the Ministry of Youth and Sports and the Ministry of Information Policy. Less than a year later, they decided to separate them. This summer, despite expert warnings, three ministries were merged into one: the Ministry of Economy, the Ministry of Agrarian Policy, and the Ministry of Ecology. In the fall, over 130 signatories petitioned deputies to restore the independent operation of the Ministry of Ecology, which helped block laws with corruption risks. However, this issue is not currently under discussion.

It is the Verkhovna Rada that approves not only the ministers but also the number of ministries and the Cabinet’s operational format. Yet, the parliamentary majority often lacks the agency (subjectivity) to resist directives from Bankova (the Presidential Office).

What’s Wrong with the 2026 Budget Project?

Deputy Buimister notes that besides personnel issues, there is another matter where consensus is lacking and votes are being sought: the national budget for next year.

Even deputies from the “Servant of the People” faction have questions about the draft budget. Deputy Oleksandr Aliksiichuk says the budget discussion is a priority:

Oleksandr Aliksiichuk

People's Deputy ("Servant of the People")

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There are three key items that will unite the faction and the entire hall during the consideration of next year’s budget: military salaries and frontline needs, teacher salaries, and the 64% PIT for communities. Politicians who want to be stakeholders in decision-making must understand the importance of including these parameters. Otherwise, it is difficult to demand anything else from the Government without understanding the main priorities for the country's survival.

The “Dovira” group agrees that these are key issues. Oleg Kulinich stated that amendments to the state budget have already been drafted alongside the Ministry of Finance to provide for the 64% PIT in local budgets:

Oleg Kulinich

Head of the "Dovira" Deputy Group

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There should be a committee meeting, and we hope they adopt the version we prepared. The additional 4% of PIT directed to local budgets can be used to pay for electricity used in centralized water supply and sewage services. Currently, several regions, including my Poltava region, face serious problems that have gone unresolved for years. Thanks to our amendment, a local budget receiving PIT funds will be obligated to transfer a subvention to another local budget if the founder of the communal enterprise is a different local government body. For example, in our Poltava region, the Regional Council is the founder of 'Poltavavodokanal,' but the compensation funds go to the Poltava City Council budget. Nothing obligates the city to transfer those funds to save the communal enterprise and its consumers. This is wrong, and it will be fixed.

“Holka” inquired with the Secretary of the Budget Committee, Volodymyr Tsabal (“Holos”), about the progress of the draft budget. The politician noted that dialogue with the Ministry of Finance is improving:

Volodymyr Tsabal

People's Deputy ("Holos")

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We heard manipulative arguments from the mono-majority about why we must vote: allegedly because these are IMF requirements. Of course, the IMF has requirements, but they only concern two parameters: the total planned expenditures and the deficit. How we spend the funds is our responsibility. Whether we allocate money to the 'United Marathon' or railway cars is up to us. After Andriy Yermak was dismissed, the situation changed somewhat, as this budget had been approved, in part, by the Office of the President. Now, the government has the opportunity to review the budget within the IMF-agreed parameters, and on December 2, such a dialogue with factions began. For instance, my faction, 'Holos,' is negotiating to reduce capital expenditures while increasing spending on the defense sector. Another requirement of 'Holos' is increased funding for the Bureau of Economic Security, where a new head—a former NABU detective—was recently elected through a transparent competition. This can be done at the expense of funds planned for a 23% funding increase for the still-unreformed DBR. Our partners demand that we continue the BEB reform.

These are not the only issues with the draft budget. In the spring, the Verkhovna Rada passed the “Ihor Mazepa Law” (Draft 12089), which essentially provides for the legalization of property stolen during the Yanukovych presidency and earlier. If ten years have not passed since the illegal distribution (deriban) of forests and coastlines, the state or community must deposit funds equal to the market value of the stolen property into a court account to reclaim it. If it is proven that the land was seized illegally, the perpetrator returns the property but takes the budget funds. Thus, the state and the community lose either way.

This “Ihor Mazepa Law” was criticized by both the European Parliament and the European Commission.

Notably, the government attempted to delay the implementation of this law regarding the budget deposits to protect the state budget from this scheme. However, deputies from the “Kolomoisky Group”—Taras Batenko and Ihor Fris—submitted three amendments to nullify the Cabinet’s actions. In the first reading, two were supported, while one failed. Now, with a shortage of votes for the budget, the “Kolomoisky Group” is ready to support the draft but is setting its own conditions.

If preliminary vote counts show sufficient support, the budget may be considered on the afternoon of December 3.

Special for “ZAXID.net”

Цей матеріал підготовлено в межах проєкту “Перезарядити Україну тобі під силу“. Проєкт реалізується за підтримки Національного фонду на підтримку демократії (NED).