MATTIAS JÕESAAR ⟩ If we want to make cuts, we must transform the mindset in the public sector

Kristen Michal's government convened for its first sitting. Photo: Madis Veltman

• Time is money, and the working hours of the public sector are taxpayers' money.
• Grotesque examples can also be found in local governments.

From a distance, it appears that those in power are sitting on intricately carved oak chairs adorned with lion heads, sipping expensive cognac, and signing orders that increase burdens on the common people, according to political observer Mattias Jõesaar.

Postimees wrote in its editorial last Thursday about how several thousand new employees have been hired into the public sector in a short time. In the same newspaper, Mikk Salu reported on how the government finds it nearly impossible to cut anything. As a former public sector worker, I will try to contribute to finding areas for cuts.

Rulers on oak chairs

Firstly, I agree with Postimees' newsroom that if those who advocate for cuts do not also make cuts themselves, they lack the moral justification to take from the rest of society or to impose any additional burdens. While cuts in the government sector, such as reducing ministers' salaries or the number of officials, might not significantly impact the overall budget, they would at least demonstrate solidarity with the rest of society.

For example, if public institutions engage in substitute activities alongside their core functions, these areas are obvious targets for cuts. The financial savings might not be substantial, but if officials do not have excessive time or resources left over from their primary duties, many foolish activities could be prevented.

From a distance, it seems that rulers are sitting on intricately carved oak chairs adorned with lion heads, sipping expensive cognac, and signing orders that increase burdens on the common people. If someone asks why not sell the oak chairs and stop buying cognac, the response is often, «Our deficit is so large that it wouldn't make any noticeable difference!»

On the one hand, it is a matter of morality and setting an example. On the other hand, the old wisdom holds true: look after the pennies and the pounds will look after themselves.

From the perspective of setting an example, the newly appointed government has started from the wrong end. They first announced tax increases and the need to cut universal benefits, only later considering whether they could cut something from themselves.

The logic behind the tax increases was also flawed. Analysts have already assessed that the proposed tax increases will hit the most vulnerable people the hardest. In the past, it was said that Estonians follow Russian orders with German precision; now the government is implementing social-democratic tax hikes with methods characteristic to the Reform Party.

According to social-democratic ideology, taxes should be higher with more redistribution of wealth, aimed at helping poorer people, at least in theory. Now, taxes are being raised as the Social Democrats want, but it is the poorest people who suffer the most, fitting the Reform Party's approach.

Meanwhile, at the Social Democrats' demand, a new ministerial position has been created, and the Social Democratic Party's leader, Lauri Läänemets, has hired the most advisors of all the ministers, using taxpayer money. Announcing tax increases that hit the poor hardest while creating new high-paying positions with taxpayer money does not leave an impression of a government sincerely wanting to reduce public spending.

The principle that each ministry and institution does not have to do everything themselves should be extended to the private sector.

Ending duplication

Setting an example is one thing. How can the public sector actually be downsized? We should start by ending duplication. Estonia already has good initiatives in this regard. For example, the state has consolidated the background services of many state institutions into the State Shared Service Center.

This means that each ministry does not have to create separate accounting and payroll departments – these are done centrally from one place. This direction has helped reduce state expenses somewhat.

The principle that each ministry and institution does not have to do everything themselves should be extended to the private sector. When the state starts implementing an initiative, it should first ask why it should not be the private sector doing it. This question should be asked, for example, by the Transport Administration, which plans to create a large ticket sales and journey planning system for 840,000 euros. It seems like exactly the kind of project a startup would be able to handle.

Similarly, the Ministry of Social Affairs has a sub-department for pension awareness, with a head and two advisors. Their task is to promote the funded pension. Recently, Postimees published an opinion piece aimed at young people by Kätlin Muru, pension awareness manager, introducing various pension pillar funds. While reading it, I thought that all banks in Estonia are already promoting said funds. Why does the Ministry of Social Affairs need to do it separately?

Grotesque examples can also be found in local governments. Tartu Postimees has repeatedly covered the school meal saga in the Elva municipality, where the municipality decided not to outsource school meal services to the private sector but to provide them themselves. As a result, school meals became so expensive for children in Elva municipality that parents had to start paying extra for school meals, even though the state provides support for school lunches for every child.

It is true that ending each of these activities individually will not result in significant savings for the state budget, but if there are dozens or even hundreds of such examples, a noticeable amount could be saved.

Substitute activities

There are many activities in the public sector that are not worth offering to the private sector at all. A few years ago, I worked in communication in the public sector and asked directly about some strange information activities why we were doing them. The answer from above was actually very logical – it was a European Union-funded project with built-in communication requirements. If we did not do them, the EU might demand the project funding back.

This at least partially answers the question of why there are so many communication specialists in public institutions. Many of them deal with seemingly pointless information activities out of fear of EU fines. This is the price we have to pay to use European funds.

In challenging times, public institutions should demonstrate a better grasp of reality, lead by example, and focus solely on their core responsibilities.

However, the communication period for EU funding also ends at some point, after which we must closely monitor that we are not continuing what appears to be pointless information activities with our own public funds. Additionally, some mandatory side costs of a project can be so high that sometimes it would be wiser not to use the support at all.

Sometimes, however, useless substitute activities are not even justified by EU requirements. A good example is the Center of Estonian Rural Research and Knowledge created in 2023, now with over 300 employees, whose main activities include measuring soil acidity, increasing potato circumference, and other agricultural tasks.

But for some reason, the state has tasked the Center of Rural Research and Knowledge with finding enough time and human resources to promote gender equality alongside measuring soil. The addition of new responsibilities likely explains why the number of employees in the institution is growing so rapidly.

Time is money, and the working hours of the public sector are taxpayers' money. The mandatory gender equality plan of the Center of Rural Research and Knowledge is yet another tombstone in the vast cemetery of wasted time. During difficult times, public institutions should demonstrate a better grasp of reality, lead by example, and focus solely on their core responsibilities. This way, society would be more understanding of cuts and tax increases if it is clear that the money paid is going to the right place.