This comes after it became clear that planned and agreed tax hikes and new taxes in Estonia will not on their own fully solve the state budget deficit.

The political steering group is to discuss the proposals next month, with a view to the government making decisions in relation to the budget strategy in late summer.

The goal of the balanced budget, or "zero budget" as it is called in this context, is to save €150 million per year, yet this has not yet been achieved.

Eesti 200 chair and Foreign Minister Margus Tsahkna had pledged major state budget cuts, and has said that now a clear overview is available of the expenses of the three ministries in question: The Ministry of Social Affairs, the Ministry of Economic Affairs and Communications, and the Ministry of Finance (all housed in the same "superministry" building in central Tallinn).

As a result, state services can be made more needs-based, an Eesti 200 central policy plank in fact.

"Right now, services are very rigidly designed. Take the example of child allowances. Everyone receives benefits for the first and second child, regardless of their income. In our opinion, less well-off people should receive a greater degree of services, while wealthier people do not require child allowances, but other things," Tsahkna said.

Health Minister Riina Sikkut (SDE) said that every taxpayer has a legitimate expectation in receiving a certain minimum package of services from the state.

"The majority [of services] are still those that are difficult or impossible to make needs-based in a short period of time," Sikkut continued.

"SDE's stance has been that there are certain supports and benefits which must be universal, such as child support, or those on the availability of medicines. If a person needs access to medicines, this is an objective medical necessity arising from health issues, but the taxpayer could be compensated for it in the same way," the minister continued.

The Ministry of Finance says it does not yet have clarity on what the impact of the need-based approach to services on the state budget could be.

Andrus Pirso, adviser to the finance ministry's state budget department, said: "Professionals can argue that it can be more complicated and more expensive, but until some analyzes have been carried out, we will not know exactly how much it will cost to allocate subsidies based on need. During the process, it will become clear whether it is reasonable or not."

In the course of their revision of the state budget, officials have analyzed the budget lines at the Ministry of Social Affairs, the Ministry of Economic Affairs and Communications, and the Ministry of Finance, whose services constitute over half of the state budget spending in this arena.

Ministries summed up the services they provide, to whom and for what purpose, which led to a large Excel spreadsheet file – of 800 lines, Andrus Pirso said.

"We are currently working on sifting through these ideas, to find out if there are any specific proposals where we could omit or cut something," Pirso said.

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