Bill to switch to four-year budgets to be ready in April
The Ministry of Finance is planning to introduce a draft bill in April that calls for the state to draw up budgets with a temporary structural deficit, and establish a four-year fiscal framework.
The ministry was currently looking for ways to simplify the drafting of the state budget and give more weight to the medium and long-term perspective, Minister of Finance Sven Sester (IRL) said in a meeting of the Riigikogu’s Finance Committee on Monday.
The planned changes had high priority, and the deadline for finishing the bill of amendments to the State Budget Act was set for April, Sester added.
The ministry submitted a proposal to the government in early January according to which the state would not compile a separate budget and budgetary strategy for each year, but instead in the future would draw up four-year budgets that could include a deficit of up to 0.5% of Estonia’s gross domestic product per year.
This four-year budget would be updated every year by adding another year. The first such budget would be drawn up in 2019 for the 2020-2023 period.
Under the new law, the government could submit such a budget to the Riigikogu already in the spring, and the parliament could then adopt it by the end of the year. Since the government makes most of its budgetary decisions in spring anyway, the new solution would give the Riigikogu more time to discuss it.