2016 state budget passed; 4.2% increase in spending ({{commentsTotal}})

The Parliament building in Tallinn at night
The Parliament building in Tallinn at night Source: (Postimees/Scanpix)

The Parliament approved next year’s state budge by 58 votes to 40. The volume of the budget is 8.9 billion euro, which is 4.2 percent, or 358 million euros, higher than this year.

Revenues are predicted to grow to 8.84 billion euros (up 3 percent compared to the initial 2015 budget) with state spending for 2016 at 8.92 billion (up 4.2 percent).

The chairman of the finance committee, Remo Holsmer, said a total of 6.7 million euros worth of amendments were added at the third and final reading on Wednesday.

The 358 million euros will largely be swallowed up by pension hikes (88.9 million euros) and additional funding for health care (51.8 million) and defense (37.1 million). Road construction will get an extra 30 million euros, 20 million will be spent on strengthening the eastern border, 16.1 million more on family benefits, 10.5 million more on parental benefits,and another 10 million euros will be used for preparations for Estonia's Presidency of the Council of Europe in 2018 and for the 100th anniversary of the Republic of Estonia the same year.

"In next year's state budget, government investments, and also investment subsidies, will increase by 22.5 percent in comparison to this year, and will amount to 480 million euros. Economic growth will also be promoted through the valuing of education. A total of 307 million euro will be directed to the building and reconstruction of roads and road management, which is 22 million more than this year," Holsmer said.

Several changes in tax rates will come into effect next year, such as the tax free minimum increasing from 156 to 170 euros per month. Child benefits will increase to 50 euros and the salary fund for teachers, culture workers, social workers, police officers and other internal security officers will increase by 4 percent, Holsmer said.

The average salary should increase by 4.5 percent, or to 1,096 euros gross per month, Holsmer said.

Editor: J.M. Laats