We, 31.05.2023
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State budget zeroes in on security and social benefits

Kadri Hansalu
, majandustoimetuse juhataja
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Photo: Jaanus Lensment

At the press conference presenting state budget, coalition partners stressed the extraordinary constructiveness and peace prevailing at talks – the debates must have been exhausted after springtime treaty negotiations and review thereof in summer. 

No cross-party agreement, however, regarding the epithet to go with 2016 budget – by Prime Minister and Reform chairman Taavi Rõivas, it was called «responsible»; health/labour minister and chief Soc Dem Jevgeni Ossinovski said it was «progressive»; finance minister Sven Sester (IRL) sees the budget as «sustainable and conservative».

In the eyes of IRL head and social protection minister Margus Tsahkna, all that’s good in the budget is linked to social protection. «This is the budget of the prudent and hardworking Estonian family – economising on costs while investing in such family members as need a boost,» he said.

In the budget, the government says its 2016 priorities are improving Estonia’s security, promoting economic growth, enhancing wellbeing of the low-waged and families with kids, reforming the state and local administration, preparing for EU presidency, and halting the peripherialization.

While a lot has already been said about defence investments, tax changes and all kinds of social benefits, a fresh agreement has been reached regarding thinning the ranks of people on state payroll. Of the over 56,000-strong public sector, 751 jobs will be deleted during the year to come.

The ministers said the cuts were decided by domains according to where support services have already been reformed or not. At that, the money thus saved may be used by the ministers to raise salaries, as separate wage-rise money is this time only allotted to priority domains as teachers and cultural, domestic security and social welfare staff.  

As underlined by Mr Tsahkna citing public sector cuts in 2009, mere thinning of ranks won’t do. «The cut was rather mighty and those that remained begun to produce extra bureaucracy to prove how very needed they all were. Thus, the reform must happen hand in hand with reforming real bureaucracy and overregulation,» he explained.

Mr Ossinovski added that next year would only be preparations time for the large administrative reform – fixing the principles thereof, and preparing a broader audit on the basis of which major changes may be executed.

«The changes require careful thought. By next spring, public administration minister (Arto Aas, Reform – edit) will present the government a more specific plan regarding where real rise of effectiveness is feasible, which tasks can be dumped or reorganised, if certain posts may be combined, consolidating foundations etc,» described the health and labour minister.

Mr Rõivas said the public sector lay-offs are not a main topic in the budget and it isn’t such a big thing as to make anyone worry for his job. «Rather, people ought to be glad that the state is also concerned that the public sector balloon not overmuch,» said the Prime Minister.

Pursuant to plans, they will keep the budget in structural 0.6 percent surplus and in nominal 0.1 percent minus. Meanwhile, budget costs growth exceed that of the revenues – by four and three percent, respectively. The difference is covered out of reserves.

By domains, major budget changes can often be explained by the various external support – with EU funds added to education and research, their budget would rather be growing: as for environmental ministry, their budget shrunk due to decreased income from emissions quota sales. Government Office, meanwhile, was awarded extraordinary money for preparations of EU presidency and 100th anniversary of Estonian Republic.

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