The Riigikogu's State Budget Control Select Committee on Monday met to discuss issues related to the transparency and comprehensibility of the state budget, as highlighted in the National Audit Office's recently publish and highly critical annual report.

Committee chair Urmas Reinsalu (Isamaa) said the National Audit Office (Rigiikontroll) annual report is pivotal in its importance, as it gives an impartial, five-year assessment of the state budget's management.

He said: "When the state budget is opaque and its actual costs are hidden, that makes it impossible to make meaningful savings from administrative expenses."

In presenting the report to the committee, Auditor General Janar Holm noted the state budget's traceability and comprehensibility, in terms of expenses, has not improved since the transition to an activity-based format several years ago.

Meanwhile Sven Kirsipuu, who is permanent undersecretary for fiscal policy at the Ministry of Finance, rebutted some of the criticisms presented in the report, while conceding that the budget could be set out more clearly.

Academic Jaak Aaviksoo said that grasping the Estonian state budget is more-or-less impossible for the average person, and challenging even for a Riigikogu MP.

To remedy this, Aaviksoo proposed creating a sample state budget based on the expenses of one single ministry of the total 11.

Aaviksoo told ERR this would be: "Ahead of the next budget, meaning the 2026 budget, being prepared– the 2025 budget is already in hand."

"The 2026 budget will be issued in September, so perhaps in the coming months we could draft and present a version of this," Aaviksoo continued.

"The Ministry of Finance could prepare it, then the Riigikogu would debate whether such an approach would be suitable. So, agree on the format in advance, so it doesn't come as a shock again, leaving all parties dissatisfied," Aaviksoo added.

Aaviksoo at the same time said at the committee meeting that preparing an activity-based budget has proven many times more expensive than a costs-based approach, plus doing so is not practical in

several areas.

He said that he supports a so-called hybrid approach on the budget, using an activity-based view in some areas, and a cost-based view in others.

According to Aaviksoo, the proposed sample budget could also be prepared as a hybrid version.

"Right now constitutional institutions actually use a classic model, while other ministries follow a different model, but we could apply the hybrid approach across the board," Aaviksoo told ERR.

Auditor General Holm said at the meeting he backed Aaviksoo's idea of drafting a sample budget, and recommended that the Riigikogu use this as a reference point.

Urmas Reinsalu proposed the committee continue discussions in this direction.

Present at the select committee sitting were: Head of the finance ministry's budget development department Eneken Lipp, head of the ministry's state budget department Kadri Tali, economist Heido Vitsur, Riigikogu MP Aivar Sõerd (Reform), chief auditor at the National Audit Office Märt Loite, and auditor Ermo Liedemann, along with Aaviksoo, Holm, Kirispuu and Reinsalu.

In the recent audit office report, Holm noted that the current state budget process is artificial, impractical, and that obtaining a clear picture of the state's finances has become even more challenging than it already was.

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