Eesti 200 leader: Inflation should be tackled via energy tax cuts

Kristina Kallas.
Kristina Kallas. Source: Karli Saul/Estonian handball league.

To alleviate the impending issues with energy bills from the autumn, taxes on energy carriers should be temporarily reduced and state investments postponed, in order to curb soaring inflation, leader of the non-parliamentary Eesti 200 party Kristina Kallas says.

"I think we should definitely discuss and analyze the temporary, certain reduction of certain taxes for a certain period of time," Kallas said, talking to Vikerraado show "Uudis+".

"I am referring to the [taxes] which are pushing up the price of energy today to very high levels, then perhaps after that, excise duties," she added.

As to cutting VAT, a potential move which has seen more opposition than with other aspects of taxation, the Eesti 200 leader said more discussion was needed.

She said: "I'm not quite sure that a reduction in VAT in one area or another, be it on food or goods, will actually solve the situation. In this case, the effect tends to be temporary, and the prices will go up again pretty soon afterwards."

In order to curb inflation when postponing investments, Kallas pointed out the repair of roads and school buildings: "Repair of school buildings and roads is what we need to disperse. I will give an example: in cooperation with the Ministry of Education it is no longer sensible, we will have to postpone these investments for a much longer period of time."

On the question of the family benefits hike at the center of the current government crisis and which resulted in Prime Minister Kaja Kallas' (Reform) dismissal of the seven Center Party ministers from the cabinet last week, Kristina Kallas (no relation) said that he would not have signed off on the bill – brought unilaterally by Center MPs - seeing its motivation is misplaced.

"Our position is that people are falling into poverty today, even the middle class is actually falling into poverty too, but low-income people in particular have been hit hard, and of course, they need to be supported. "Kallas said. 

"Child benefits are one point of discussion, but we also need support in other areas - we also need support for the rising energy prices. For this reason, we support the debate on raising and support in both areas."

Kallas also hit out at the use of the benefits issue in a political power struggle.

"However, we have to look at what we have actually started doing in politics today under the guise of child benefits. After all, it is not a matter of solving the problems of families with children, but actually a political power struggle, and a particularly vile one at that," Kallas told "Uudis+", adding that the situation had been going on for quite some time.

Kallas also said her party would support the freezing of senior civil servants, in the interests of curbing wage-price inflation, though more jionr employees' salaries should be raised in the internal security and education spheres, she said.

Eesti 200 was founded in 2018 and won its first seats, at local government level, at last autumn's municipal elections. It is broadly seen as a competitor for votes with the Reform Party.


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Editor: Andrew Whyte

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