Government Approves 2015 Budget, Parliament Up Next

Quo vadis, Estonia? (Courtesy of Government Office)
9/23/2014 3:39 PM
Category: Economy

The government today approved the 2015 state budget, with only the Parliament standing in the way of the 8.5 billion-euro budget.

The budget foresees a growth in revenues by 7 percent to 8.45 billion and expenses by 6 percent to 8.54 billion euros, leaving the deficit at 0.5 percent of GDP or slightly less than 100 million euros.

Defense spending is set to increase the most, to 2.05 percent or 412 million euros, 28 million more than in 2013.

A large proportion of defense spending will go to weapons procurements, continuing the construction of the Ämari airbase and facilitating allied forces in Estonia.

Defense Minister Sven Mikser said 44 million euros alone will be spent of equipment for soldiers, including reservists, ahead of the Siil (Hedgehog) military exercise, which will be the largest in the history of Estonia. The maneuvers will take place next year in May, with 12,000 set to take part.

The state will also hope to move forward with the purchase of third generation anti-tank missiles and combat vehicles.

Internal security will also receive a shot in the arm, with 425 million euros, 21 million more than last year, earmarked.

The public sector employee salary fund will increase by 3 percent, with internal security employees (police), teachers, social workers and people working in culture prioritized.

As a sign of a more left-leaning government, social protection expenses will increase by 193 million euros to 2.86 billion. A majority of that increase will go towards pensions, up 5.9 percent, increasing the average state pension from 353 euros to 374 euros per month, and to a planned increase of child benefits, which will surge from 19.18 euros to 45 per child each month.

The state will pay secondary schools 3.1 million euros to provide free school lunches to all pupils, not just those in primary schools as is the case currently.

Income tax will decrease by 1 percentage point to 20 percent and unemployment insurance premium will be cut from 3 to 2.4 percent.


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