Coronavirus supplementary budget faces first Riigikogu reading Monday ({{contentCtrl.commentsTotal}})

An extraordinary Riigikogu session last week, with some MP's wearing masks, discussed the supplementary budget, due for its first reading on April 6.
An extraordinary Riigikogu session last week, with some MP's wearing masks, discussed the supplementary budget, due for its first reading on April 6. Source: Priit Mürk/ERR

The first reading of the supplementary budget, containing measures aimed at combating the coronavirus pandemic and its economic fallout, starts Monday.

The budget bill is to be scrutinized by the Riigikogu's budget control committee, headed by opposition MP and former finance minister Jürgen Ligi (Reform) on the same day. Riigikogu finance committee chair Aivar Kokk, who is in the governmental Isamaa party, has warned against a "Christmas has come early" attitude to the extraordinary budget, stressing it is to be invested as planned, particularly with local governments.

The government submitted its bill for the proposed budget last week, along with a draft decision on mobilizing the stabilization reserve. The Riigikogu is also opening proceedings on a bill to amend laws associated with the supplementary budget bill, BNS reports.

The supplementary budget puts general government nominal deficit at around €2.62 billion, BNS reports, inclusive of the cost of the economic support measures sparked by the crisis. The negative impact of mitigating measures on the budgetary position will be €1.15 billion, or 4.4 percent of GDP. 

The supplementary budget will reportedly reduce the receipts of the main 2020 state budget due in autumn by €1.63 billion, compared with the current budget. The impact of the supplementary budget measures on the expenditures of the current state budget is €513 million, BNS reports, complemented by the mobilization of reserves.

Riigikogu budget control committee to examine measures

The Riigikogu's state budget control select committee is also scheduled to discuss the conformity of the package of measures on Monday.

Committee chair Jürgen Ligi (Reform) said that while finance minister Martin Helme (EKRE) announced the formation of a crisis committee of experts early on, the latter had not been involved much in the supplementary budget's drafting.

"It has been said that during an acute crisis, measures must be quick and directed precisely towards severe problems such as the preservation of jobs, businesses and incomes," Ligi said, according to BNS, before going on to say that the bill's provisions would go against expert advice.

Reform MP and Riigikogu budget committee chair Jürgen Ligi. Source: ERR

"In a situation where, due to cheap borrowing, there is seemingly more money than any other government [has had], there are several extremely expensive provisions in the bills which are not recommended by experts, whose efficiency in the context of the crisis is non-existent, and which have not been deemed sensible in a normal situation either."

"It is a duty of oversight by the select committee to draw attention to places where one is dividing up the booty, and what should actually be done to improve the situation," Ligi, who was finance minister under the Andrus Ansip administration in the recession starting in 2008 and whose party is in opposition, went on.

The state budget control select committee has invited Auditor General Janar Holm and representatives from the ministries of finance, economic affairs and communications and social affairs, to attend the meeting, starting at 1.15 p.m. Estonian time.

A video recording of the meeting (in Estonian) can be viewed later on the Riigikogu Youtube channel here.

Finance committee chair: Purpose is to boost investments, promote cooperation between state and regions

Chair of another Riigikogu select committee, the finance committee, Isamaa MP Aivar Kokk, says the purpose of the supplementary budget is to motivate municipalities to make additional investments, not substitute investments of one sort with investments of another.

Kokk, whose party is in office with the Center Party and the Conservative People's Party of Estonia (EKRE), said that in a situation where several sectors of business are on the verge of collapse, the state and municipalities alike must not cancel their investments planned for this year, and highlighted the importance of cooperation between both.

Riigikogu finance committee chair Aivar Kokk (Isamaa). Source: ERR

"The supplementary budget should motivate local governments to bring forward to an earlier period investments which have been postponed due to a previous lack of funds," Kokk said in a statement forwarded to the media, BNS reports.

Kokk also said that local authorities skimping on planned investments should not receive further funds for newer investments.

"If some local governments forgo their investments this year, they should not be allocated additional funds under the supplementary budget for financing new investments. The objective is to increase the number of investments to support business, not substitute one sort of investment with others," Kokk said. 

Kokk also said that after the Riigikogu has adopted the economic package, a feeling of "now we have reached Christmas time, where everybody gets generous handouts of cash," needs to be discouraged.

"We must maintain a responsible mindset and flexibility. There is always the risk that the additional support and funds may be misused," he said.

"Therefore the terms and conditions of application must be submitted to an in-depth review, and compliance with them much be checked. The entire public sector must bear responsibility for this, and at the end of the day, the application of all measures needs to receive the approval of the whole government, not just an individual minister."

The finance committee at its sitting on Thursday last week began handling the 2020 supplementary budget and associated bills, in order to approve them in accelerated procedure, and ensure the availability of measures laid down in the crisis mitigation package.

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Editor: Andrew Whyte

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