Estonia's new leftist coalition in formation is doing things backwards and in the wrong direction with regards to the tax and budget policy, preferring a low-paid economy, Vice Chairman of the Reform Party and former Minister of Finance Jürgen Ligi said.
"Raising taxes and taking out loans, and casting this in stone, is the previous century's understanding of the economy," spokespeople for the Reform Party quoted Ligi as saying. "This causes unbalanced swelling in simpler sectors, but Estonia needs to give preference to a more complex and profitable economy."
In Ligi's view, throwing the budget out of balance is a short-sighted policy stemming from short-term political interests that will make the future of the country uncertain.
"Raising labor taxes in turn harms employment and wage growth," Ligi continued. "What's even worse, imposing higher taxes on the creation of higher qualified jobs will reduce our competitiveness and prevent low wages from rising as well." In the former minister's opinion, the issue of low wages cannot be solved with tax hikes but by stimulating higher paid economy.
"IRL's participation in scuppering the fiscal policy is especially regrettable, since as recently as 2010 they insisted on writing budgetary balance into the Constitution," Ligi recalled.
Editor: Editor: Aili Vahtla