Opposition politicians looking at possible infrastructure savings

Road construction in Estonia (photo is illustrative).
Road construction in Estonia (photo is illustrative). Source: Olev Kenk/ERR

Opposition politicians are generally against any sweeping budget cuts, but at the same time recommend looking for savings in the wake of the rise in state spending prompted by Russia's invasion of Ukraine, and the energy price inflation which started last fall.

The potential savings would be most likely obtained from the many infrastructure projects on the table at present.

Finance Minister Keit Pentus-Rosimannus (Reform) confirmed last week that the government had no plans to make any cuts in the current circumstances and budget picture.

Chair of the opposition Social Democratic Party (SDE) Lauri Läänemets agrees with the principle, adding that: "In fact, more money needs to be invested during crises. It is not possible to 'cut ourselves out' of crises."

At the same time, the SDE chair said that expenditure on infrastructure was in need of review.

He said:  "Maybe a bigger [traffic] intersection or a larger [highway] section is not so important nowadays, but regional solutions which really affect people's quality of life or access - these should be ensured."

Kristiina Tõnisson, a politician with non-parliamentary party Eesti 200 and head of the Johan Skytte Institute of Political Studies, at the University of Tartu, was of a similar mind.

Citing the northern detour around Tartu and the proposed Tiksoja bridge as an example (link in Estonian), Tõnisson said that she would prefer cuts to fall on Tallinn, but also understands the need to postpone infrastructure projects.

"If you're asking from me personally as a Tartu resident that should this happen, or some bypass around Tallinn, then I would say that there are enough Tallinn bypasses done already, let's now create one for Tartu also," she said.

"When I take a look at the state's level then this is just such a case where I would say, let's consider it, do we really need this right now. Or we could look at the bigger picture, is it really necessary to push Rail Baltica further in the current situation?" she went on.

Conservative People's Party of Estonia (EKRE) leader Martin Helme noted that the state also has more revenue at its disposal than earlier.

Helme said: "We have a surplus of €300 million from the sale of CO2 quota alone this year, compared with what is budgeted. The VAT surplus, right now I cannot estimate but I would suggest it's something in the region of quarter-of-a-billion euros. Perhaps €200-€300 million. With that there is already a lot of costs which could be covered."

At the same time, Helme expressed concern that spend might be more lavish than it needs to be, under the pretext of the current security crisis, giving as an example the proposed LNG vessel terminal.

"Instead of a floating LNG terminal, it is much easier and cheaper for us to make an onshore terminal, preparations for which have long been in place," he said. 

State subsidies for the fees connecting solar panels to the grid were another example Helme, a former finance minister, highlighted.

Isamaa's Aivar Kokk, who is deputy chair of the Riigikogu finance committee, said that any cuts need to be made cautiously.

He said: "This definitely a double-edged sword. If we all stop road construction, entrepreneurs in this field will lose their work and the state will lose tax revenues."

While Läänemets pointed out that the current situation proves that a "thin state" cannot withstand crises, Kokk points out the public sector as a potential area where cuts could be made if needed.

"The example of teachers, rescue workers and police is always given, but no. No thought has been given to savings with the police or healthcare. If we have in Estonian 650,000 taxpayers and 150,000 of these are on taxpayer-funded salaries, then this number is certainly too big," he said.

Unexpected state costs this year, largely arising from Russia's invasion of Ukraine, so far include the €600 million on defense and security in the coming years, the LNG terminal and assistance to war refugees.

The rapid rise in construction prices is also a factor, ERR reports.


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Editor: Andrew Whyte

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