Proposal submitted to switch to four-year budget periods
The Ministry of Finance submitted a proposal to the government according to which the state would not draw up a separate budget and budgetary strategy for each year any longer, but would instead compile four-year budgets including a potential deficit of up to 0.5% of GDP per year.
The four-year strategy would be updated annually by adding another year, and the first four-year budget would be drawn up in 2019 for the 2020 to 2023 period.
The government would submit the new four-year budget to the Riigikogu already in the spring, and the latter would adopt it by the end of the year. Since the government makes most of its budgetary decisions in the spring anyway, the new solution would give the Riigikogu more time to discuss the budget bill.
The new approach would require a similar level of detail as the current one does, with the accompanying explanations added to the bill containing information that is currently presented also in the government’s budget strategy. An overview of the planned investments to the extent the Riigikogu requires it would be added to the explanations as well, in place of the current overview of government investment programs.
The change would allow the government as well as the other constitutional organs of the state to run their own budgets more independently. For example, the government could reallocate funds so long as their purpose did not go against the distribution decided on by the Riigikogu.
In other words, while money could be shifted from a governmental department to another, it could not be repurposed, e.g. money destined for social security would still have to be spent on social security, though could be spent by a different authority than the one that originally received it.
The ministry also proposed drawing up state budgets that could include a deficit of up to 0.5% of GDP.
According to the ministry’s proposal, which in turn followed the new government’s strategy, in the future using the structural surplus of previous years would be allowed for up to 0.5% of GDP as well. The record-keeping would start in 2014, and annual surpluses and deficits would be added together.
Editor: Editor: Dario Cavegn
Source: ERR, BNS