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Coalition split over Eesti 200's €200 million personalized state proposal

Tiit Riisalo outlines the proposal for the personalised state.
Tiit Riisalo outlines the proposal for the personalised state. Source: Ken Mürk/ERR

Coalition parties are split on moving forward with Eesti 200's €200 million proposal to develop a "personalized state". Reform calls the plans "superficial" while SDE wants to prioritize education, health, or energy.

Yesterday, Minister of Economic Affairs and IT Tiit Riisalo (Eesti 200) outlined the idea for the personalized state, which would see millions of euros invested in IT and the e-state, and suggested a €200 million loan can be used to fund it.

On Tuesday, "Aktuaalne kaamera" asked coalition partners Reform and SDE what they thought about the proposal.

"I would like to see its exact content. At the moment, he has been very superficial in his media comments," Chairman of Reform's Riigikogu faction Erkki Keldo Keldo said.

"We have agreed that we will initiate the creation of this personalized state. But point one, we want to see in real terms what the exact cost of this is, what the potential revenue-saving measures are, whether they are, for example, the means-testing of services or benefits. But if you simply give the example that you can also look at nursery places in a local authority, then today most local authorities have already done this through ARNO and other things," he added.

Erkki Keldo Source: Ken Mürk/ERR

"And another thing – I'd like to see what the base cost of such a system is. After all, we put extra money into IT this year, both for cyber security and for developing and maintaining IT systems. If the Ministry of Economic Affairs and Communications has said that maintaining today's IT systems at a good level requires a base funding of somewhere over €40 million per year, then we would like to see the logic of this money flow. If we invest so much in IT development, how much we will save over the years or make something more efficient? At the moment this idea has been very rudimentary," the politician told ERR.

Keldo said the government has not agreed to take out a €200 loan to fund the developments.

SDE Chairman Lauri Läänemets said he would not rush to support the idea. For example, the healthcare sector requires €150 million in next year's budget.

"In the end, it still needs agreement and consideration within government. We are more likely to make these spending decisions towards the end of the summer when we will re-do the budget strategy and the budget," the interior minister said.

Lauri Läänemets (SDE). Source: Ken Mürk/ERR

"I think there are definitely things that provide benefits as well. But at the end of the day, putting money into education is also an investment, health is also an investment. If there is any investment that is important for people in one country, it is education and health. Energy too, all the other things can be built on top of that," Läänemets said.

He said Estonia needs many things, not only a personalized state, but also investments in people and their wellbeing. These support economic development which could then be channeled into money for IT systems.

"I can not exactly assess the need for these IT systems, because we have not reached that level of discussion in government. We have only had one good general discussion. I think that there needs to be a very long and in-depth discussion here, and ultimately a comparison with the needs of other societies. And then it would also be possible to understand more precisely exactly what problem we are solving and whether it is the most pressing problem in Estonia today," the chairman said.

Eesti 200 Chairman Margus Tsahkna told ERR the personalized state will take state administration to a completely new level and have a positive affected on the budget. He said services today are too rigid.

Margus Tsahkna. Source: ERR

He said in the past IT development funding has largely come from the European Union, but now Riisalo is fighting for money from the Estonian budget.

"If we want to jump to the next level, which is where we need to go, and where I see our coalition partners agreeing, then investment is needed. But the return on these investments is very significant precisely because the state becomes flexible, people-centered, people get the service they want and taxpayers can see where their money is going. All in all, it is an investment that pays off," the foreign minister said.

Asked by ERR how it seemed impossible for the government to find even €10 million extra for teachers' salaries last week, Tsahkna said this is why a loan is needed. He argued developing the system will eventually lead to costs being saved.

"Eesti 200 has proposed that we need to make this digital leap, that we need to reform our services so that people can still get the services they want. And if that requires investment, that is a separate investment program. If we are talking about fixed costs, for which there is no money today, there is no solution at the moment. Eesti 200 is ready to take a loan to invest in this reform, which will bring much more back to the people later," the chairman said.

Coalition agreed to develop "personalized state"

Signing of the 2023 coalition agreement. Source: Siim Lõvi/Priit Mürk/ERR

When the coalition was formed in spring 2023, it was agreed by all parties to develop the personalized state system. Reform, SDE, and Eesti 200 said they would "implement the digital transition in public administration" following the 11 principles listed below:

1. We will carry out budgetary reviews and launch zero-base reforms, i.e. rebuild the national budget from the ground up. We will review every cost item so as to eliminate unnecessary expenditure and use the money available in the budget in as smart and economical a way as possible.

2. We will produce an open e-state as a platform for which companies, citizens' associations and others can create new solutions.

3. We will support the process for the formalization of laws in the State Gazette in a way that enables rules for responding to issues and undertaking other actions to be generated from texts, with these rules then able to be used in, among other things, the software for public-sector services.

4. We will create a mobile app for the e-state through which information and services can be provided to every person in Estonia by the state.

5. We will introduce, at the legislative level, the principle of the single submission of data for both individuals and companies.

6. We will replace the requirement to submit an application with consent for services in cases where the state is certain that the citizen in question is eligible to obtain the service.

7. We will complete the already planned introduction of e-invoices in the public sector and support the full implementation of digital accounting in the private sector as well. An e-invoice is a form of electronic communication between machines.

8. We will review all state services and eliminate any doubling-up. We will review management in ministries, agencies and foundations as a whole and also the number of officials employed in them. We will make online voting possible on smart devices.

9. We will develop the digital state in a user-centric way that promotes innovation, prioritizing ease of use on smart devices and the security of systems and services. We will enable more service-related and decision-making processes characteristic of the personalized state and the integration of artificial intelligence into data-based decision-making.

10. To ensure that open data are freely available we will make the crossover use of various state databases possible and provide user-friendly access to them. We will establish better conditions for the crossover use of data at the state and local government levels.

11. We will centralise public-sector services and service-related information of importance to entrepreneurs in the eesti.ee digital gateway, creating proactive solutions or solutions which are based on event services. We will promote the widespread use of artificial intelligence and machine learning.

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Editor: Aleksander Krjukov, Anne Raiste, Ildar Nisametdinov, Helen Wright

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