"When free public transport is mentioned here, what gets forgotten is, that only a quarter of the €50 million we currently provide in public transport subsidies goes on free public transport," Kallas said.

"Because in the past, we also received around a quarter of the fare revenues, with the other three quarters already subsidized by the state. If we abolish free public transport, the actual savings will not be €50 million, but €10-15 million," Kallas said at a government press conference.

"It's not a magic solution that will immediately enable us to save €50 million," Kallas added.

According to Kallas, there are other similar examples of areas, where cuts appear to be possible, but in reality, making them could lead to an increase in inequality. "For example, the development of regional housing, whether we call it rental housing or something else. Even this measure, which is between €5-10 million, will certainly not deliver the kind of savings at the national level that we are expecting or want," Kallas said.

"These are, regionally, still really important things – free, or very well organized, public transport. Whether it is free or not, we can still discuss. The way we envision it, public transport could be organized on the basis of demand," Kallas said.

On Wednesday, after the first round of coalition talks, Reform Party chair Kaja Kallas said, that Reform's goal is to reach a balanced state budget in four years.

To do this, Kallas said, it would be necessary to implement a range of reforms to bring about savings.

Minister of Finance Annely Akkermann (Reform) previously said, that cuts of up to €1 billion would be needed in the new state budget.

The coalition talks, which began on Wednesday, involve the Reform Party, the Social Democratic Party (SDE) and Eesti 200.

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