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Riigikogu passes 2024 state budget

The result of the vote on the 2024 state budget in the Riigikogu.
The result of the vote on the 2024 state budget in the Riigikogu. Source: ERR

In an additional sitting on Friday, the Riigikogu passed the next year's budget, which the government had tied to a confidence vote.

There were 58 votes in favor and 31 votes against.

The leader of the opposition Isamaa party, Urmas Reinsalu, requested that the first item on the agenda of the additional sitting be withdrawn, arguing that the government could make the necessary changes to it. Reinsalu proposed that it be brought back to the Riigikogu for discussion next week, but Erkki Keldo, the leader of the Reform Party faction, disagreed.

Following that, opposition members of the Riigikogu delivered statements outlining why they were unwilling to pass the budget.

It was announced during the debate on the draft state budget that the president had not promulgate the Act amending the Land Tax Act and the Taxation Act. The law was passed by the Riigikogu on November 22, also in connection with the question of confidence. President Alar Karis said that the law was not in accordance with the Constitution, because it had been passed in the Riigikogu in violation of procedural rules.

This prompted opposition deputies to ask whether it was possible to adopt a state budget in a situation where a law related to the state budget had not been promulgated. The opposition MPs proposed a recess to consider the situation.

The President of the Riigikogu, Lauri Hussar (Eesti 200), took the recess, after which he announced that the session would continue, as the law does not allow the debate to be adjourned and the government cannot withdraw it. Hussar referred to the analysis of the legal center of the Riigikogu from 2021, which says that the order of adoption of related laws is not important for the adoption of the state budget.

As the session continued, also EKRE tried to end the sitting before the agenda was exhausted, but the vote did not support the proposal and the debate on the state budget continued.

Key parameters of the state budget

According to the draft budget, the state budget for next year would be €16.8 billion in revenue and €17.7 billion in expenditure. Revenues will be 7.7 percent more than last year, while spending will be 4.9 percent higher.

Next year, a total of €1.9 billion will be funneled into the economy in the form of investment and investment support, with €1.1 billion coming from EU funding and €0.82 billion coming from the national budget. According to the draft, the structural deficit would continue at 1.2 percent of GDP, while the nominal deficit will be 2.9 percent of GDP.

The objectives for next year's state budget, according to the the government, are Estonia's military and comprehensive national defense, economic growth with green reforms and public financial sustainability, education, cyber security capacity building, and support for Ukraine.

According to the draft, Estonia's defense budget will exceed the 3 percent limit for the first time in 2024, hitting 3.2 percent of GDP, with the state contributing more than €1.3 billion. The draft state budget law also preserves the pledge to devote 1 percent of GDP to research and €71.9 million have been set aside for the transition to Estonian-language schooling, and roughly €24 million has been set aside for teacher salary increases. An additional €23 million will be committed next year to guarantee the state's IT infrastructure and cyber-security are in good operating order.

The draft initiated by the government passed its first reading in the Riigikogu on October 18, and 745 amendments were submitted by the deadline. On November 23, the government decided to link the adoption of the draft to a question of confidence in the government before the second reading. Amendments tabled to the draft on a matter of government confidence thus will not be put to the vote.

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Editor: Mait Ots, Kristina Kersa

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