Michal: National defense tax could be broad-based and temporary
Estonia's potential national defense tax could be maximally broad-based and laid down for a fixed period only, said Kristen Michal, the Reform Party's choice to replace Kaja Kallas as Estonia's head of government.
You're planning to update the coalition agreement to meet austerity and national defense needs. What does that mean?
That is just what it means. Some things have already been done, while others will probably be given a new scope. More specifically, Kristina Kallas (Eesti 200) has said that her party's personalized state plan needs modernizing. The Social Democrats have sent similar signals. Perhaps we'll also need to revise some plans we've had in hopes that the economy will recover more quickly. So, there are various steps.
Coalition agreements tend to be living documents, which are regularly updated through decisions and activities, and such reviews are entirely normal, especially when the prime minister changes.
Do you see more room for austerity?
Yes, definitely. There is always room for austerity. I would highlight national defense and security as the only exception today. I can tell you as a member of the government that there is more room for cost-cutting. We have been among the more diligent savers at the Ministry of Climate. There is more room for austerity, because if the country finds itself in a difficult situation – and we are in a difficult situation from both a national defense and economic point of view – steps need to be taken, problems solved and things made right again. We have no other option.
One part of this is a better overview of our finances. The current situation where even financial experts cannot fully understand the [state] budget needs fixing. Working on a negative budget while hoping to find money sitting in bank accounts is not befitting of Estonia.
You see a defense tax as one way to generate more revenue. How might something like that work?
We are still discussing the details. I consider a national defense tax a possibility, yes. I would even say that it has the support of both the coalition and opposition, while the press has also considered it necessary.
We will take a broad-based approach. It concerns everyone, and the burden on each individual will be that much smaller. Another principle could be a temporal horizon; that we'll outline a period during which this tax will be collected. Future governments can then take decisions in the confines of their mandate.
But all of it is preliminary today. We will discuss it in-house and then with coalition partners, which is when we'll be able to phrase it in more detail.
What do you consider your strengths, compared to Prime Minister Kaja Kallas?
I think that every leader, every prime minister has their own style. Rather, I'd say I have a lot to learn from previous prime ministers. Kaja Kallas is brilliant and strong in foreign policy, while Andrus Ansip was systematic and Jüri Ratas cheerful and hardworking. I have plenty to learn. I'll try to pull it off.
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Editor: Merili Nael, Marcus Turovski