Martin Helme: Political will needed for budgetary cuts

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Martin Helme at a government press conference. Source: Siim Lõvi /ERR

Outgoing Minister of Finance Martin Helme (EKRE) said that a Ministry of Finance state budget revision found up to €140 million in potential cuts, but any cuts would need political will as it is difficult to find ministers who would approve any cuts.

On Friday, Reform Party chairwoman and prime ministerial candidate Kaja Kallas said the negotiations between Reform and Center will eventually lead to talks about budget cuts. "We agreed that we will conduct a state budget revision to locate the places where we can make cuts," Kallas explained.

The government was talking of a revision in the summer of 2019 and outgoing finance minister Martin Helme said he has presented the revision's findings to the government on three occasions. "In December of 2019 I presented the plan on how to conduct the revision. I did it again in May of 2019, that was during the coronavirus. Then we summarized the costs that the coronavirus stopped us from doing. That total came out to around €25 million," Helme said.

The third time Helme presented the potential cut scheme was in September 2020, when the government was discussing the state budget for 2021. The finance minister's presented cuts totaled around €140 million. He said cuts of that size could be done without society missing much.

"There are two kinds of costs there. One is buried under a thick layer of culture, things that have been fought for by someone and are now just sitting there. And ministries and agencies use them as a buffer, or just let them be as they are not tight themselves anywhere," Helme said.

"The second part is costs that have not been seen through and that ministries and agencies are panically trying to spend in the end of the year. They make transfers within the budget and are just wasting the money in essence," the finance minister explained.

According to the plan presented in fall, the largest cut would have been €65 million in different support packages, including operating grants to public organizations and foundations, but also to local municipalities. The plan would have seen cuts to project grants - those that are conducted through public applications, for example.

The remaining €75 million could have been cut from public sector labor and management costs, a plan that would have taken much from each ministry and did not receive much support in government.

"Another option that we offered was to go by specific costs, leave out some actions. A third option that we looked at was a few expensive and large public services that were agreed to politically some time ago but have not justified themselves or were not made by the current government," Helme said.

But regardless of any potential plans Helme presented, the government never actually reached a point of making cuts. "Practically every minister behind the table said there is nowhere to make cuts in. On the contrary, they had additional applications instead," Helme said and noted that if there is no political will, there cannot be any cuts.

"If you do not give a few NGOs €30,000 a year, then you receive a lot more negative PR than when you give them the €30,000, you can be sure of that. And for that reason, noone wants to pick at it," the EKRE chairman said.

The pushback in fall did not stop the revision however. Finance ministry officials are now searching for potential cuts in state-provided services. Helme said one option would be to go by the so-called large budget lines - the state is subsidizing bus, ship and air transport by close to €100 million.

"We could say that we will decrease subsidization here and that would be it. We are talking of pieces of a few dozen already. The exact same thing happens with free higher education. This does not mean we could cut €200 million from universities but I am just noting the political choices," Helme said.

He reminded that the state offers 1,300 public services in total. So if they do not want to go at the larger services, they could look into smaller expenses. "There are a few services that noone is actually using. But of course, if we are talking about services that noone uses, there is not a lot of money there," Helme noted. He added however that unreasonable expenses should not be allowed, even if they are small.

"The question is about the mentality," Helme said. "If you treat public expenses by saying: 'oh, it is not a lot of money', then there are thousands of decisions made in the country and the sum is large in the end."

The new Reform-Center government will have a chance to discuss the state budget in April, when a new budgetary strategy will be discussed.

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Editor: Kristjan Kallaste

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