In the grand scheme of potential coalitions, parties only had two questions they needed to answer. How much will we hike taxes? And second, should we talk about austerity first and taxes second or the other way around, Ilmar Raag finds in Vikerraadio's daily comment.
Many are discussing Estonia's planned tax changes today. Many are surprised. Many are even indignant. But all this tax debate is sounding an alarm bell in my brain. Things are never single-valued in the real world, which is why I would like to take a peek at a few behind-the-scenes aspects.
The first is human society's intrinsic inability to effectively tackle long-term goals. For me, revelation arrived in 1997, or 25 years ago, when my good friend Raul Rebane told me people in the education ministry looked at the demographic situation and discovered that Estonia would have to start closing schools in 10-15 years because there is not enough children.
As a young person back then, I believed we would immediately launch policies to address the problem. Not even close! While Estonia's prominent parent's pay system was created in 2004, it did not deliver radical change in terms of new births. Nevertheless, society was delivered a shock when school closures started around a decade ago. Suddenly, people were surprised and aggrieved, as if no one had any knowledge of the problem.
We are talking about the need to close village schools today as something that was first declared 25 years ago. Whereas Estonia's situation is by no means exceptional. Urbanization is a global problem. The more relevant question is what does that say about our ability to solve problems.
The other observation is from the period of election debates a few months ago. Even though my main area of responsibility with the Parempoolsed was security policy, I also attended two culture debates. Most participants were acquainted as former colleagues, which prompted conversations between likeminded individuals, with people simply wearing different parties' colors.
It is clear that Estonian culture and language are important. There was no argument. However, the format of a political debate did affect our rhetoric because of the widespread conviction that elections favor those who are best at making promises, whether we're talking about village libraries, social guarantees for creative persons or theaters' funding.
My mood sank during both debates. I decided to be the party pooper and point out that the Estonian GDP fell by 4.1 percent in the previous quarter, which was the fourth quarter of 2022. "Do we have information to suggest the economy will return to the path of rapid growth this year in which the field of culture could share?" I asked. I still have no such information. What we have instead is consensus transcending parties according to which we need to hike defense spending post haste. This means expenses requiring extraordinary steps.
Dear friends, we have seen Estonia's handling of crises where one needs to tackle fixed costs as opposed to extraordinary investments. It means austerity, tax hikes or both, and both of the measures are unpopular.
Instead of culture debates' high-sounding promises, it seemed to me that we were about to enter a low period instead. We should talk about the crisis we are currently passing through and in which it is likely everyone will be short on funds.
No one argued as such, even though people asked why do we need our own country if we do not support Estonian culture. Indeed. Only in that case, culture debates should be attended exclusively by candidates for the posts of finance minister and the PM who have the most influence on priorities. Why do culture policy debates have likeminded individuals from different parties who all feel culture needs more money? Once again, no one argued.
This takes us to the post-election period when what happened was precisely what all analysts might have safely predicted. In the grand scheme of potential coalitions, parties only had two questions they needed to answer. How much will we hike taxes? And second, should we talk about austerity first and taxes second or the other way around?
Listening to coalition politicians today, every statement to justify tax hikes points out that taxes are just one way to pay for political promises. The first posture for next year's state budget is ministries' realization that all must find ways to cut costs.
Personally, I am not the least bit interested in who is to blame. But I can promise you that I at least will not be surprised when austerity lands next fall. Regarding cost-cutting there is one universal rule. While it always constitutes political abuse and indescribable pain for the individual fields it hits, cuts never seem to go far enough in all other areas.
I would answer the question as to whether I believe all of it could have been avoided with another question. "Do you think Estonia will keep all current schools open in the conditions of continued population decline?" And try to answer in terms of what you think will happen, as opposed to wishful thinking. Surprised?
Ilmar Raag ran in the 2023 Riigikogu elections for the Parempoolsed party of which he is not a member.
Editor: Marcus Turovski