This puts obstacles on the way of social transformation of Ukrainian society, formation of middle class, which is the guarantor of social and political stability in the developed countries and a major productive force of the society. We are convinced that Ukraine can become a modern democratic state with the developed economy and culture only if there is middle class consisting of scientists, doctors, teachers, people of art, engineers and technicians, qualified workers as well as businessmen and merchants. The income of all above shall ensure their high living standards and quality of life.
We consider that income policy in the transitional period is two-fold: it should be aimed at coping with significant income differences of different social groups and increasing income of the majority of Ukrainian citizens. Major instrument of implementing this task is reform of the system of payment, since wages is a major source of income for numerous employees and sum of payment determines pensions, different types of assistance and social payments to other categories of people.
We support policy aimed at providing advance increase of wages. We are convinced that only highly paid work can be an incentive for the worker to increase quality, stimulate scientific and technical progress and promote integration of Ukraine into Europe. By high value of labour we do not mean nominal increase caused by money depreciation but value that ensures high living standards. Therefore, together with increasing labour productivity and GDP we will be striving to increase wages share in the production cost and GDP structure to the level of the developed countries of the world. Wages are to be determined and regulated by labour contract between the employee and employer. We support the system of collective agreements under which terms of individual labour contracts can not be worse than terms collective agreements and the latter can not be worse than industry tariff agreements.
We consider restoring the stimulatory function of wages to be an important area of reforming payment and remuneration system. This will promote increase in labour productivity and quality of products, encourage workers to achieve better results. It is necessary to involve modern incentive schemes: employees should become shareholders of the enterprises, participate in revenue distribution, determine the amount of wages depending on personal input of each worker.
Labour remuneration should be differentiated depending on content and conditions of work. We are resolute about humanisation of labour conditions, establishing strict timetable, which would not exhaust the employee physically and mentally, but would reserve sufficient time and vigour for rest, bringing up children, and improving their educational and cultural level. It is necessary to undergo gradual transition from the system of compensations for the health hazardous job conditions to the system of promoting high level of safety, increased responsibility of employers of all forms of property for improving work conditions and labour protection.
The following practical measures aimed at reforming remuneration system are considered to be urgent:
. liquidation of wage arrears;
. developing balanced inter-industry, inter-position and inter-qualification proportions in the system of payment;
. establishing minimal wages at the minimal living cost level;
. introducing hourly minimal payment as legislative social guarantee;
. establishing state guarantees for constant indexing of wages.
At the same time new tax legislation is to be developed and adopted. This will limit excessive increase of income of the richest part of population and will provide effective re-distribution of income in favour of the poorest strata of population by means of introducing progressive income tax for physical persons. We intend to promote realisation of the mechanisms aimed at reduction of tax burden for salary fund and income of the citizens. This will become real source of increase for the nominal and real wages.