Entrepreneurs, Fiscal Council think new budget could be more ambitious

Euros. Source: Siim Lõvi/ERR

Entrepreneurs and the Fiscal Council said on Tuesday that Estonia's 2024 budget could have been more ambitious. Bigger steps could have been taken towards balancing the books and cutting costs, they believe.

Arto Aas, head of the Estonian Employers' Confederation, admitted that it was not easy to put together a budget in the current situation. While no employer likes tax rises, Aas said steps towards balancing the budget seem to be missing.

"Let's hope that in the next few years, we will see some real action, but it seems that at least in terms of attitude this government is on the right track, the spending spree is over, we cannot live beyond our means," he told Tuesday's "Aktuaalne kaamera".

The Fiscal Council's members had similar views. Additionally, that a deficit is also forecast alongside a growing economy in the coming years has raised some eyebrows.

"The new target, which will continue with a deficit in the coming years, is not ambitious enough. Secondly, also, under today's strategy, the deficit is expected to fall faster, which means that if this budget is adopted, the budget law will certainly have to be amended. This budgetary strategy does not comply with the law as it stands today, " said Andrus Alber, the council's vice-chairman.

Arto Aas Source: Ken Mürk/ERR

The majority of investments will be funded by European Union funding, which also requires financial input from the government.

Former finance minister and current Riigikogu member Aivar Sõerd (Reform) said: "Yes, there is 1.9 billion in planned investment, but how much of this will be realized? We can see that this year the budgeted resources were also a little less, but the pace in the first half of the year was not as fast as the pace set by the budget. There is still a risk that it will not be possible to mobilize all this capacity next year."

But Aas was not impressed.

"Almost two billion sounds very impressive. But for some reason in road construction – think of the major connections between Tartu and Pärnu – there is no sign of any extra euros, instead funding is plummeting. The question then arises as to where these investments go and why they do not find their way into the road network," he said.

The government on Tuesday passed the 2024 state budget and the next four years' fiscal strategy. Revenue will amount to €16.79 billion, expenses to €17.67 billion and investments to €0.82 billion. A deficit of €1.19 billion is also forecast.


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Editor: Merili Nael, Helen Wright

Source: Aktuaalne kaamera

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