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Coalition prefers to look for cuts instead of tax reforms

Lauri Läänemets, Mart Võrklaev and Margus Tsahkna.
Lauri Läänemets, Mart Võrklaev and Margus Tsahkna. Source: Siim Lõvi /ERR

The government needs to plug a €400 million hole in the state budget and prefers to make cuts, rather than raise taxes. Suggestions so far include making family benefits needs-based and reviewing research funding.

The priority areas of the State Budget Strategy (RES) in the coming years are national defense and education. 

This year's and next year's budgets are in deficit, in addition, the strategy includes €430 million of revenues that are currently unfunded. 

The coalition is currently discussing how to continue.

Tax changes have been discussed, but Minister of Finance Mart Võrklaev (Reform) prefers to look for ways to save money. He thinks one area that could be cut back is research and development.

"The research money from the European funds for the period just ended was not used. There is unused money that cannot be carried over, which is again related to research money. Research money really is a problem. There are very large sums of money but it often doesn't get to where it should," said Võrklaev.

One of Eesti 200's proposals was to make some state subsidies need-based.

"Different services and supports will become needs-based. This is not just about family benefits. It is about social services and all the services that the state provides," said Margus Tsahkna, party chairman.

"Very often, those who need help do not get it. And, for example, financial support goes to those who don't really need it at all. This is the longer-term reform that the Eesti 200 has proposed. And it was decided to go ahead with it," he added.

Social Democrats Chairman Lauri Läänemets emphasized the first meeting was general, and positions were presented, but the disputes did not go into detail.

"We should not make it particularly difficult for people on lower wages and pensioners with solutions to balance the budget. And to look towards those people who can contribute to society, so that they can do so," said Läänemets.

In the first discussion, there was no talk of how much money should be saved by various measures or of specific tax changes.

"Social Democrats have said all along that people on salaries of €5,000 or more could contribute more through the tax system. And that is what we said at the table," said Läänemets.

Coalition members will meet again in February to discuss the budget strategy.

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Editor: Marko Tooming, Helen Wright

Source: Aktuaalne kaamera

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