State social responsibility is determined by the very nature of the country and is
embodied in provision of every person with conditions for a normal living standard,
prevention of manifestations of antisocial behavior caused by poverty, chronic
diseases, etc. At the same time, the state seeks not to equal income, but to reduce the
inequality in income received through their redistribution in favor of disabled and the
poor. An important tool for realizing stated goal is the state financial policy and its
main components: budgetary, tax, investment, monetary policy and others. Using
financial policy tool, the state makes indexation of incomes, price regulation, labor
market, establishment of minimum wage level, makes state transfer payments
(unemployment assistance, pensions, scholarships, social care and social protection
expenditures, etc.), carries out labor market regulation (ensures equal conditions of
employment, the same mode of work and rest, social guarantees in cases of disability,
employment regulation, taking measures to reduce unemployment level).
Indicators determining level of socio-economic development and quality of life
include life expectancy, per capita GDP, employment rate, human rights
implementation degree, environment, etc. State financial policy targets should also be
indicators. Specific directions, methods and limits of state intervention are determined
by the nature of the course and severity of social, financial and other problems of the
country at a certain period.
Transformation produces significant changes in all spheres of country life, and
financial policy of the state must adapt to new conditions and new challenges of social
development. Such a policy should be conducted considering national characteristics,
conditions of the institutional environment, adequate design and transformation, as
well as the possibility of using the progressive world experience on innovative financial
mechanisms of public finance policy, rational and efficient financing of the social
sphere. An approach by which one or another component of sustainable development
becomes dominant may lead to other distortions in achieving sustainable social
development. The predominance of social component leads to threat of overturning the
ideology of consumption. In our opinion, it’s more acceptable to have balanced
development of Ukrainian society based on the parity of components of sustainable
development – social, economic and ecological components. Social development
should be in line with the state development of the economy and society, promote the
emergence of social crisis, provide a reasonable level of minimum social guarantees
and social living standards.
The effectiveness of public finance policy in the social sphere depends on the
clarity of goals and objectives that need to be addressed to meet the needs of social
development process. At the same time, it is important to reconcile state, social and
individual interests, finding a social compromise, and resolving conflicts if these
interests do not coincide.
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