Prime Minister Kaja Kallas (Reform) on Wednesday sent the 2024 state budget draft to the Riigikogu for discussion.
"If I had to describe next year's budget in one sentence, it would be a step towards getting spending under control or ending the spending spree. We have been living beyond our means for the last seven or eight years, and this cannot go on forever," Kallas told members of the Riigikogu in a political statement.
"The government's fiscal policy objective is to gradually improve public finances, so the contribution of the general government sector to saving around €350 million over four years is crucial. We really want to bring public debt under control. One of the most important guarantees of the security of the Republic of Estonia is a sound state budget," she added.
The government prioritized five areas with the budget, Kallas said: financing Estonian's national defense and broad-based security, supporting economic growth through green reforms, sustainability of state finances, education, and supporting Ukraine
Isamaa Chairman Urmas Reinsalu said the government should have presented a policy to stimulate economic growth alongside the budget, but it did not.
"On the contrary, the government's policy steps are systematically aimed at exacerbating, not reducing, the uncertainties of Estonian business and the economy. This is an inherent flaw," he said.
Reinsalu also said all the tax rises passed in the spring should be critically reviewed and new proposed tax hikes should be frozen.
Tanel Kiik, chairman of the Central Party's Riigikogu faction, said the state budget is visionless and deepens the crisis.
"The national budget must address the most important concerns of the Estonian state – reducing inequality, strengthening the health system, tackling the demographic and economic crisis, and ensuring security. But the current government lacks both a short and a long-term plan," Kiik said.
"At a time of multiple crises, it is the duty of the state to support its people and businesses. If necessary, it must do so at the cost of a budget deficit, until there is a willingness to overhaul the Estonian tax system as a whole. The 2024 state budget is an unambitious document that shows the government lacks both vision and priorities. It therefore needs to be thoroughly reworked in parliament," he said.
The Riigikogu must adopt the budget by the end of Feburary 2024, otherwise, emergency elections will be called.
The government on Tuesday agreed on 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. The deficit is estimated to be €1.19 billion.
Editor: Aleksander Krjukov, Helen Wright