Aivar Hundimägi: Government in need of an invigorating shock

Aivar Hundimägi.
Aivar Hundimägi. Source: Erik Prozes

Kaja Kallas' government currently comes off as a firefighter standing next to a burning building and telling the owner that the big picture needs to be seen before work to extinguish the fire can begin, Aivar Hundimägi finds in Vikerraadio's daily comment.

The major weaknesses of the Kallas administration are the inability to think outside the box and slow decision-making. Whereas, under normal circumstances, it is excellent when ministers measure nine times and cut once as the saying goes.

The last two years of the coronavirus and soaring energy prices have been anything but normal circumstances, which is why the government needs to be prompt, flexible and innovative in its efforts to alleviate crises.

Unfortunately, the Kallas administration is none of those things. Instead, the government comes off as a firefighter standing next to a burning building and telling the owner that the big picture needs to be seen and thought given to preventing future fires before work to extinguish the current one can begin.

Of course, politicians need to find ways to avoid future energy price shocks. But the first priority should have been softening the blow of December power and heating bills for private individuals and businesses. The government's proposed solution failed in adding to social tensions instead of helping to manage them.

The Achilles' heel of Reform under Kallas is rigidity, clinging to recent principles in a situation where flexibility is clearly in order. I'm referring to the ongoing debate over who should qualify for support. The Reform Party is convinced that universal support measures are wrong and that taxpayer money needs to be distributed on an as-needed basis.

The result is a complicated system of benefits that took a long time to develop, is costly and mired in red tape. It would have been far simpler to pay all consumers a fixed sum. The latter measure could have been temporary, for example, only covering the winter months, with a necessity-based system following later.

I understand the points made against universal support instruments. And they are convincing under normal circumstances. However, what we have today is a crisis, and those need a different approach.

A good example from the recent past is the companies' salary support scheme employed in the coronavirus crisis. While I am sure the benefit reached more than a few companies that did not need it, it was a small price to pay if we consider that it helped retain countless jobs and afforded businesses time to adjust to the new situation.

We are in a similar situation with the energy crisis today. It took many companies and people unawares and could have long-term negative effects on economic development. December energy bills are forcing businesses and households to cut back spending. Consumer confidence is bound to take a hit and leave everyone worse off, including those who are currently enjoying fixed prices and are therefore less affected by the immediate energy prices hike.

Kaja Kallas finds that blanket support measures use taxpayer money to help the wealthy and those making inefficient use of energy and is furthermore unfair toward people who had fixed their electricity price and paid more to manage risks when the market price was down.

However, this position does nothing to help us in the current crisis. The government must act much more quickly and remain open to different solutions. The Reform Party is spending too much energy on opposing various ideas when it should be focusing on finding solutions instead. And this needs to include solutions that would seem insensible under normal circumstances.


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Editor: Marcus Turovski

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