Kokk: No country can keep paying a 70 percent salary benefit for long

Isamaa MP Aivar Kokk.
Isamaa MP Aivar Kokk. Source: ERR

Chairman of the Riigikogu Finance Committee Aivar Kokk (Isamaa) said that while no country can keep compensating 70 percent of people's pay for long, extending the instrument needs to be considered so as not to leave companies stranded.

Executive manager of the Estonian Employers Confederation Arto Aas said on Friday that the state is considering extending Unemployment Insurance Fund salary benefits as the crisis will reach some sectors months from now.

Kokk said that the state cannot afford to keep compensating such a large part of people's salary for long, while leaving companies to fend for themselves would not be right.

"The instrument is estimated to cost €250 million in just two months. At the same time, it's true the effects of the crisis will manifest in different sectors at different times and we need to keep that in mind. All employees and employers have contributed toward the fund's reserves, which is why it is important to treat workers and companies hit by COVID-19 as equally as possible," the committee chair said.

Kokk said that extending the instrument so those who will feel the effects of the crisis later could also benefit could be considered. He added that the principle of the state compensating workers for a part of salary on current conditions and for a period of two months should be retained.

"The principle has been added to the supplementary budget act by the finance committee. Draft legislation also states that all crisis measure bills need to be approved by the government before they can be passed," Kokk said.

Arto Aas believes that companies that will be hit by the crisis later on are those belonging to the construction and manufacturing sectors as well as IT. "Hard times will arrive in late summer and fall there. That is when we might see unemployment explode and the economy dip deep into the red," Aas said on the "Vikerhommik" radio show.

Aas agreed that the main question in terms of whether to extend the salary benefits instrument is whether the state can afford it.


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Editor: Marcus Turovski

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