Ligi Firm on Government’s Budget Strategy

Jürgen Ligi (Postimees/Scanpix)
4/30/2014 9:45 AM
Category: Economy

Minister of Finance Jürgen Ligi said the current flexible approach to the budget helps the state to survive more difficult times if there are savings, saying that subsidies should not be cut when the going gets tough.

Ligi said in a live interview to ETV that the priorities of the budget strategy have not changed much - the ministry's plan for the years 2014-2017 focused on encouraging economic growth, improving competitiveness and increasing employment as priorities. One subject that has emerged in the strategy for 2015-2018 is child poverty, he noted.

He admitted that the new budget strategy has a more social nature, alluding to the change in coalition, where his Reform Party swapped the conservative IRL for the Social Democrats.

“Partners change and decisions are changed, but labor taxes are what affects employment, economic growth, and competitiveness. In this way, it also affects the poverty of children, to ensure their parents have jobs. The fewer taxes you put on jobs, the more likely it is that more will be created,” Ligi said.

He also noted that the ministry is not more optimistic than commercial banks and the central bank, but has more detailed information on the budget.

A new budget act requires a structural balance, which, according to Ligi, allows the government to save up when the times are better and use the surplus in more difficult times, instead of going after benefits that have been planned for a long time.


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