We, 31.05.2023
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Editorial: what do we christen this Budget?

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Photo: Urmas Nemvalts

Each fall, politicians and at times even observers are seeking a name for the state budget to sum up its fundamental features, or flaws. This time, both pros and cons will be hard pressed as substantial surprises are difficult to detect. 

The tough public tax debates came and went after the coalition treaty was unveiled and before the changes were forced through by confidence-vote over government. The selective lay-off of 751 from 56,000 public sector posts ain’t no news anymore. Also, the traditional juggling with terms like «nominal deficit» and «structural surplus» has gotten us all well tamed.

Praise the current coalition for the steadfast rise in defence spending. While overall costs grow 4.2 percent, defence ministry adds 9.4 percent i.e. €39m on top of this year’s €412m. Not limited to content, this is to keep underlying our commitment to the «2 NATO percent» of GDP with no trickery attached.

In the current conditions, nice also to see the moderate and varied thinning of ministerial staff. Though the direct savings are smallish, it’s still a means to make management more effective and curb the bureaucracy.

Also nicely, to the backdrop of no general wage rise, priority domains will be a bit blessed: teachers, and those working at culture, domestic security, and social welfare. Remains to be seen, however, if the 4 percent salary fund boost will suffice to make teaching more popular. But at least the step is right.

As compared to this year, budget costs will grow by a total of 4.2 percent, revenues only by 2.4 percent. When presenting budgets with planned deficits, our governments have loved to point at the deficit being nominal while structural surplus is being targeted as also prescribed by State Budget Act. And also that the actual revenues have in these past years proven better than planned.

Even now, Prime Minister Taavi Rõivas is proud to point at last year’s Eurostat diagram where with its 0.8 surplus Estonia trails only Denmark while ahead of Germany and Luxembourg also in the black. This year, tax revenues have been on a hefty rise as well.  

Still, with the structural balance requirement and while indulging the nominal minus, the questions always remains: do we see the year cyclically as bad, medium or good? In the case of the latter two, the goal might be nominal surplus not the burning of reserves.

On cartoon, the budget piggy feels extra military.

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