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Hundreds of millions to be transferred to next year's budget

Superministry building in Tallinn, home of the Ministry of Economic Affairs and Communications, and the Ministry of Finance.
Superministry building in Tallinn, home of the Ministry of Economic Affairs and Communications, and the Ministry of Finance. Source: Ken Mürk/ERR

Sums in Estonia's state budget that have not been used will be transferred to next year. While they may total a billion euros, the Ministry of Finance says the money cannot be used to help reduce fiscal deficit.

Leader of the opposition Isamaa party Urmas Reinsalu this week proposed using money ministries have not managed to spend this year to help cut public sector costs.

Reinsalu told Postmees in an interview (link in Estonian) that it is possible to rein in central government spending this year and the next, and it makes for a fundamental question how much money that was not used this year will be transferred to next year's budget. "That is the quickest way to cut expenses," the politician said.

Reinsalu pointed out that €958 million that was not used in 2021-2022 was moved to 2023. "I have asked Finance Ministry experts how much they plan to move to 2024 – it is roughly half a billion. Look at the sheer volume of what we are working with. I'm not saying this money should be taken away and put toward improving the fiscal position, it includes a part of defense spending and other investments, but a large chunk of [saving needed] is there."

Tanel Ross, head of financial services at the ministry's state budget department, told ERR that resources allocated to ministries but not yet spent cannot be used for any other purpose. These are usually funds meant for specific investments or projects that have simply not been expended inside the year.

"If ministries are unable to conclude all the projects the resources for which are in the current year's budget, they can move the resources to next year. These transfers need to be coordinated with the Finance Ministry. The resources will be used to continue relevant activities or investments next year," he explained.

Ross said that while expenses going unmade one year improve that year's fiscal position, it will be that much worse the next, provided the relevant expenses are made in full then. "Any effect on the budget is therefore canceled out," he said.

This year's transfers to become clear in spring

Ross said that almost a billion euros was indeed carried over to 2023 a quarter of which was supplementary budget resources and €180 million investment transactions. These resources are reserved for intended purposes which cannot be changed in the course of transferring the sums to the new year. It is up to individual ministries to decide how much money to carry over.

"Extending the deadline for use of resources by one year requires the intended purpose to remain the same. Resources once transferred cannot be transferred again to the year after," he said.

While Urmas Reinsalu's information suggests that sums to be transferred total half a billion euros, the actual volume remains unclear as ministries have until May 31 to make relevant decisions, which is when the report of state budget performance is due.

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Editor: Marcus Turovski

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