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Nõgene: Impoverishing people with taxes won't prompt new economic growth

Tallink CEO Paavo Nõgene.
Tallink CEO Paavo Nõgene. Source: Priit Mürk/ERR

The Estonian government should work on how to grow the declining economy, but impoverishing the people with taxes won't prompt new economic growth, Paavo Nõgene, CEO of listed Estonian shipper Tallink, said in an appearance on Vikerraadio's "Vikerhommik" on Monday.

"The state should invest; the state should work to ensure that businesses are competitive," Nõgene said, criticizing the current Reform-Eesti 200-SDE coalition government's economic policy.

"In conditions of economic recession, people's standard of living deteriorates and businesses' competitiveness is reduced," he continued.

"The government is striving for a balanced state budget, which is the right thing [to do], but is it the right thing to do in a deep recession?" he asked.

The CEO also weighed in on the government's actions in drawing up the bill for the 2024 state budget.

"Even plenty of people at the Ministry of Finance don't understand the budget bill," he said. "In half a year, €50 million, or 0.3 percent of the budget, managed to be pared down. That isn't enough. Because the work wasn't done, it's now being compensated for with new taxes."

Nõgene said he was surprised by how many taxes the green transition involves. "The people are going to pick up quickly on how expensive the green transition is going to be," he noted. "Now, is this car tax implementing the state budget or a green tax?"

He gauged that at an overall volume of €16 billion, there would certainly be sufficient resources for cuts to state budget expenditures even before raising taxes.

"Governments have managed to make decisions even in very difficult times," the Tallink chief said. "Right now, the government's credibility is very much under question. To be honest, they'll find public support even for difficult decisions."

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Editor: Aili Vahtla

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