Government meets to discuss budget strategies, taxes and loans

The government is discussing the state budget for 2023 and the budget strategy for the next four years at Vihula Manor in Lääne County this week. Tax rises and loans have been proposed, but the parties are not in agreement.

Big unsolved issues and heavy rain awaited politicians at Vihula, Thursday's "Aktuaalne kaamera" reported.

Speaking about the situation, Isamaa Chairman Helir-Valdor Seeder said: "There is not one main issue, but it is necessary to put together the budget as a whole and find the balance between different areas."

The Social Democratic Party (SDE) has already floated new taxes and loans to fund gaps in next year's budget. Public sector workers want pay rises, but higher spending on national defense is making this difficult.

 Isamaa is also not afraid of taking out a loan, Seeder said.

"If it is necessary to take a loan, then a loan can be taken out. It must be taken for investments, not for current expenses. But Estonia must not be afraid of loans at the moment," he said.

SDE Chairman Lauri Läänemets said loan money should fund extraordinary spending on national defense. This would then free up money for public sector workers' salaries.

"Today we are in a situation where it is necessary to increase these salaries significantly. /.../ I think that it would be reasonable to take a loan for national defense. An alternative to that would be some kind of tax change," he said.

"But it shouldn't be that we say, in good times, we cannot raise wages because we must save for hard times, but, in hard times, we say that we have difficult times so we cannot raise wages. This version does not suit us."

On Wednesday, Läänemets said a billion euro loan should be taken out and a 1-2 percent additional tax levied for national defense spending.

Minister of Finance Keit Pentus-Rosimannus (Reform) does not want to raise taxes but she said rescue workers, police officers and teachers must receive pay rises in 2023.

"My personal feeling is that while we are looking for possible ways to additionally support people, collecting this same money with a tax may not seem like the most reasonable thing to do. But we will discuss it, we will certainly also listen to exactly what the Social Democrats' plan is with this new tax," she said.

Prime Minister Kaja Kallas (Reform) told AK salaries must rise next year but could not say by how much. She is also not in favor of new taxes for targetted spending.

"The Social Democrats have an extraordinary amount of ideas about how to spend money and, indeed, there is also the idea to establish new taxes. But considering that we have very high inflation and people actually already pay a war tax in the form of this inflation, I don't think it is right to impose an additional burden on people," she said.

Kallas said no agreement has been reached on energy subsidies for companies.

"We are discussing what measures we can do and we hope to get an agreement here on what can be done and what will have an impact in reality, considering that these sectors are also very different," she said.

The two budgets must be submitted by the end of the month.


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Editor: Merili Nael, Helen Wright

Source: Aktuaalne kaamera

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