Earlier this week, the Estonian government greenlit in principle the supplementary budget bill totaling €730 million. According to the Center Party, there were painful compromises for both sides involved, but the government is prepared to reach new deals this fall, including regarding a potential reform of the child benefit system.
Of the supplementary budget's €730 million, €170 million will be going to establishing Estonia's gas supply, and €30 million will be invested in the construction of a liquefied natural gas (LNG) terminal.
A significant portion of the money — nearly €250 million — is indeed tied to energy security matters. In connection with rising energy prices, the government also intends to increase the subsistence level from the current €150 a month to €200. This will cost the state €29 million.
"We're now increasing the subsistence level to €200, which means that €200 is what people should be left with after necessary expenses," Minister of Finance Keit Pentus-Rosimannus (Reform) explained. "And one change is indeed that while rent payments were already included when calculating subsistence benefits but mortgage payments were not, then considering the situation that could arise in connection with the war in Ukraine — that there are certain sectors in which people may unexpectedly lose their jobs — then for a six month period, it will be possible to include mortgage payments when calculating subsistence benefits."
Pentus-Rosimannus said that an estimated 1,000 families will need subsistence benefits this year.
Also included in the supplementary budget are one-time €50 support payments to pensioners and families with children, at a total cost to the state of €30 million.
Center, however, had wanted €100 payments.
"We'll likely reach the paying out of this [support] in November, and yes, it is a one-off payment," the finance minister said. "We're not organizing any sort of separate additional submission of applications; no one has to specifically provide proof of anything or submit any applications. For me, this is essentially still part of society's broader safety net."
The opposition, meanwhile, is critical of the payment of such support.
"In a situation like this, there are several things you can do," commented Conservative People's Party of Estonia (EKRE) chairman Martin Helme. "One method is to take steps to suppress prices. When it comes to electricity, it is absolutely within the government's power to do so. Another option is to start taking money out of taxpayers' pockets, call it taxpayer support and then move this money from taxpayers' pockets to the major energy companies. This is the path that the current government has chosen to take."
The Center Party, Reform's coalition partner, claims it had greater ambitions for the supplementary budget. Center had also been hoping to reduce VAT on food as well as excise duties. According to Center parliamentary group chairman Jaanus Karilaid, there were painful compromises for both sides involved, but the government is prepared to reach new deals this fall.
"We have also shown willingness to reform the child benefit system and peg [the monthly child benefit] to the average wage," Karilaid said. "MPs' wages are pegged to the average wage, the elderly to the index. Child benefits should also actually be pegged with a corresponding formula; this would be more fair."
The exact distribution of supplementary budgetary funds will be published after the government gives the supplementary budget bill its final approval and the bill is submitted to the Riigikogu. This is currently slated to take place next week.
Editor: Aili Vahtla