/nginx/o/2024/10/18/16426805t1hbc77.png)
/nginx/o/2025/05/25/16869382t1h6af5.jpg)
The lengthy coalition agreement contains many costly promises, but avoids discussing funding.
The coalition agreement is 74 pages long, a densely written document divided into 13 areas, each outlining a series of promises the government aims to fulfill. More specific promises come with firm deadlines down to the quarter for when they should be completed. This adds clarity.
«We will follow the principle of responsibility when taking on new state budget obligations, make decisions carefully, and base them on the state's fiscal capacity,» the coalition agreement states. What stands out, however, is that the agreement avoids talking about money. Nowhere does it say how much anything will cost.
Estonia's state budget is already deeply in deficit, and the agreement includes many expensive promises. The coalition promises to eliminate the tax hump, make the car tax more affordable, raise the salaries of defense personnel, teachers, and cultural workers, continue indexing pensions, and proceed with the construction of four-lane highways between Tallinn and Tartu, and between Tallinn and Pärnu.
What stands out, however, is that the agreement avoids talking about money. Nowhere does it say how much anything will cost.
Years ago, calculations were made regarding the cost of eliminating the tax hump, and those estimates put it in the range of half a billion euros – although no one likely knows the exact figure. A uniform 700-euro basic exemption will again apply to everyone. Income and value-added tax will remain at 24 percent, with national defense given as the justification.
The car tax will be tied to the number of underage children in the household. Naturally, Postimees supports assisting families, but such a family support system embedded in the car tax seems complicated and confusing. It is also likely to be costly.
The government plans, in cooperation with the Estonian Olympic Committee, to build a new large sports arena for hosting major events.
«In making policy decisions, we will take a longer-term view than the previous four-year cycle,» the coalition agreement promises in the chapter on state finances. But this is not strongly reflected in the agreement. Some points are marked with «ongoing activity» instead of deadlines, but most of the promises fall within this or next year. The most long-term ones reach only into the first quarter of 2027.
This is somewhat understandable, since this coalition is unlikely to last much longer than that. Still, the agreement feels mundane. The long-term vision promised by Estonia 200 is nowhere to be seen, and it lacks a vision for how to make life better in Estonia in the future.
Estonia needs a government capable of presenting a positive outlook for the future. Simply handing out money is not enough. The promise to eliminate the tax hump is particularly costly. At a time when the budget is already in a difficult position, such steps should be avoided.