Cultural Endowment subsidies will lag behind inflation next year

The Cultural Endowment of Estonia logo.
The Cultural Endowment of Estonia logo. Source: Siim Lõvi /ERR

Subsidies from the Cultural Endowment of Estonia for artists and athletes will not keep pace with inflation next year, but they will not lessen either.

The income of the Cultural Endowment of Estonia, which provides various grants and subsidies to Estonian authors, artists and athletes, is contingent on the extent to which Estonians smoke, consume alcohol and gamble in casinos.

Despite the fact that the economic slump is forcing consumers to drink less beer and vodka, the state anticipates an increase in excise income next year.

Margus Allikmaa, the head of the Cultural Endowment, said it was too early to predict the budget for next year because excise duty revenues are difficult to predict at the moment. The agency will approve a more detailed budget in January.

However, Allikmaa said, despite the fact that subsidies are unlikely to increase in pace with inflation, writers, artists and athletes should look forward to next year with confidence.

"At the very least, no one should be worried that a significant change or reduction in support from the Cultural Endowment next year will have an impact on planned activities, for instance, forcing a project to be dropped," he said.

Next year, the pay bill for cultural workers is expected to climb by almost 15 percent. Allikmaa said that a similar wage increase must be guaranteed for freelance workers, or else the pay gap will become too big. "If the endowment finds an opportunity to contribute more money, it will do so primarily to raise freelance fees," he said.

The latest projection from the Bank of Estonia indicates that the Estonian GDP would decline by 0.5 percent this year. Anneli Sammel, the head of the alcohol and tobacco unit at the National Institute for Health Development (Tervise Arengu Instituut), said that people drank less alcohol during the previous economic crisis a decade ago. Before the crisis, alcohol consumption in Estonia was at an all-time high.

"Then, over the course of about two years, there was a significant drop. The fact that people's incomes fell undoubtedly influenced this. People were purchasing less alcohol on a daily basis, and they were also not going out as much. It is an established fact around the world that when the economy goes down, so does alcohol consumption," she said.

Sammel also said that tobacco use in Estonia has been steadily declining over the past decade. However, the government budget for next year assumes that state revenues from alcohol and tobacco excise duties, as well as the gambling tax, will increase.

If the same number of tourists visit Estonia as they did before the crisis, alcohol excise revenue is expected to rise by 4.3 percent. Tobacco excise revenue is expected to rise 7.5 percent, while gambling tax revenue will rise 2 percent.


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Editor: Kristina Kersa

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