Herkel: Government should cut spending, not allow deficit ({{commentsTotal}})

Former Free Party chairman Andres Herkel and candidate for chairman of the Riigikogu’s anti-corruption committee, said on Saturday that the government should think about cutting costs rather than allow a budget deficit.

Herkel wrote in a blog post on Saturday that it was strange that the newly elected chairman of the Pro Patria and Res Publica Union (IRL), Helir-Valdor Seeder, hadn't questioned the fiscal deficit planned under the government's new budgetary strategy and the according changes to the State Budget Act.

Herkel pointed out that Seeder had mentioned cutting public spending as an alternative to new taxes at least once. However, it seemed like the Social Democrats and the Center Party were not ready to go along with this.

"Taking the deposit income tax 'in this form' off the table and expanding joint tax returns of spouses are conditions the precise content of which we do not know at the moment. On the surface there’s the impression that Helir-Valdor Seeder will get his symbolic victory and that there won’t be any big change," Herkel wrote.

"In my opinion, however, these are topics that are very important to ensure the sustainability of the public finances of Estonia. Thinking out new taxes won’t help us, this is a path that will exhaust itself, bringing with it eventually only additional checks and inconvenience for the entrepreneurs.”

The government wasn’t interested in good governance, Herkel said. The one great change it was introducing was allowing the state’s finances to slip into deficit. "That this is the wrong time to do this has been pointed out by both the Bank of Estonia and the Fiscal Council."

Next year’s expenditures would surpass income by about €350 million, and in 2019 by €450 million, Herkel wrote.

The principle of a balanced budget that the previous governments had kept up was now given up. And this was done at a time where there was no economic crisis, and the European Union’s structural funds continued to come in. There simply was no need for extraordinary measures, Herkel said.

Editor: Dario Cavegn

Source: BNS



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