Finance Ministry not to work on sample state budget before next year
While the Ministry of Finance praised a recent proposal to improve the clarity of the state budget by drawing up a sample budget based on one ministry's expenses, it also noted that state budget law-related discussions aren't slated to continue until early next year.
"Drawing up a sample budget is certainly a good idea for simplifying decision-making," Finance Ministry spokesperson Irina Satsuta told ERR.
She explained that the ministry's current focus is on the process of amending the main State Budget Act underway in the Riigikogu, which will increase the level of detail in the 2025 state budget.
"Discussions regarding the format of the State Budget Act are planned to resume early next year, after the Riigikogu has approved both the amendments to the base law and the 2025 state budget," she added.
Last week, the State Budget Control Select Committee of the Riigikogu discussed the issues highlighted in the National Audit Office's annual report concerning the transparency and comprehensibility of Estonia's state budget.
According to academic Jaak Aaviksoo, the state budget is currently incomprehensible to the average person and challenging even for MPs. He proposed drawing up a sample budget based on one ministry's expenses.
"Before the next budget, meaning the 2026 budget – the 2025 [budget] is already on the table," he noted. "We'll be seeing the 2026 budget in September – perhaps now, in the coming months, we could draw up some version of it and offer that."
The academic explained that the Ministry of Finance could draft it, and then the Riigikogu could discuss whether such an option would be suitable. "Agree on the format in which it will be presented in advance, so that it wouldn't come as a surprise again, leaving everyone dissatisfied," he added.
During the select committee sitting last week, Aaviksoo also pointed out that activity-based budgeting is significantly more expensive than cost-based budgeting, and that in many sectors, this isn't practical. He noted that he favors a so-called hybrid model for the state budget, using activity-based budgeting in certain areas and cost-based budgeting in others.
He suggested that the sample budget could also be developed using this hybrid approach.
Auditor General Janar Holm, who was likewise present at the sitting, supported Aaviksoo's sample budget idea.
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Editor: Valner Väino, Aili Vahtla
