This summer, it was revealed that over €2 billion from last year's state budget remained unused, and the Ministry of Finance predicted at the time that a similar amount could go unused in this year's budget as well.

On Monday, the Riigikogu State Budget Control Select Committee discussed the issue of carry-over funds. Responding to a question about the size of expenditures to be carried over into 2024, Finance Minister Jürgen Ligi (Reform) explained that such expenses are not specifically forecasted.

"This is intuitively accounted for in the budgetary positioning, with an assumption of some stability, but there's no separate forecast. The goal is to fully utilize expenditures within the fiscal year, though this has never been entirely achieved," Ligi said.

According to Ligi, there are generally established procedures for managing carry-over funds, but he emphasized the need to revisit the 2018 decision by Jüri Ratas' government to remove the cap on carry-over expenditures.

"I'm not entirely critical, but the reason these sums are so large is that the Ratas government decided in 2018 to abolish this cap. There are both advantages and disadvantages to this, which we must regularly reassess," Ligi said.

The minister added that while there is significant public noise around this issue, it is understandable. However, he clarified that the size of carry-over funds does not indicate an abundance of money.

The budget is in deficit and this money cannot be used for anything else, the finance minister said.

He assured that the carry-over funds would be used next year for the same purposes for which they were allocated this year, as the law prohibits reallocating these funds for other purposes.

Kadri Klaos, head of the Ministry of Finance's fiscal policy department, noted that data on budget execution for the first ten months of this year is available. Comparing it to the same period last year, the pace of spending has been fairly consistent.

Committee chairman Urmas Reinsalu (Isamaa) asked whether this meant that both the total amounts of utilized and unused funds would remain comparable. Klaos confirmed that this was indeed the case.

Last year, approximately €700 million in external funds went unused, but Klaos could not specify how much of this year's external funds would remain unspent.

Jürgen Ligi emphasized that technically, nothing goes unused, as usage is calculated over the seven-year budget period. He explained that external funding programs had a slower start, but over the seven-year period, the funds would be fully utilized. He argued that Reinsalu's focus on one year's figures was misleading.

"Overall, usage is uneven; new periods and new documents distort the figures significantly, making usage appear inconsistent. You could write a dramatic narrative for one year, but over seven years, there's no drama," the finance minister said.

He added that every government aims to spend funds during its term, and there's no need to fear any sinister plans. If anything, it would be self-serving to spend the money more quickly.

The same topic was discussed in the committee last week, when it emerged that calculating the growth or reduction of next year's administrative costs is challenging. While a comparison of this year's and next year's budgets suggests growth, the Ministry of Finance bases its calculations on entirely different data, which is not publicly accessible.

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