Coalition promises are empty, opposition says

The new Reform–Eesti 200 coalition is making empty promises, opposition leaders said on Wednesday's edition of Esimene stuudio.
The leaders of all four opposition parties: Urmas Reinsalu (Isamaa), Martin Helme (EKRE), Lauri Läänemets (SDE), and Mihhail Kõlvart (Center) all appeared on the show, together with Prime Minister Kristen Michal (Reform) and Education Minister Kristina Kallas (Eesti 200) for the coalition.
Läänemets said Estonia's biggest problem right now does not lie in excessive bureaucracy, as the government has said, but in the significant inequalities to be found across the country.
He said: "The biggest problems next year will be revealed in the upcoming human development report, which will state that we have significant educational inequality because parents are struggling financially, children get worse grades, and they don't succeed."
"We need to eliminate these inequality-based obstacles to Estonia's economic development and quality of life," the SDE leader added.

Kallas countered by pointing out that the opposition is only looking at one side of the problem.
She said: "Urmas Reinsalu is waving the big numbers around and explaining one side of the equation — how to extract billions from the economy — but leaving out the other side of the equation, which is that raising defense spending to 5 percent of GDP means a two-billion-euro investment in one year."
"People need to grasp that the introduction of the security tax, including rises in income and VAT, is clearly linked to permanently raising defense spending to a higher level," Kallas continued.
Kallas also pointed out that at the same time as the security tax is being introduced, a reduction in tax is being applied in people's incomes.
"Abolishing the tax hump is a tax reduction. Boosting the tax-free minimum is also a tax cut. The people who benefit the most from this are actually those with lower incomes, which is extremely important in restoring people's purchasing power," she said, referring to the removal of "bracket creep."

"The government has decided that we must restore people's purchasing power as fast as possible, so that is why we have implemented these tax changes."
Helme meanwhile said the biggest problem facing Estonia is its low birth rate.
He said: "This is our biggest long-term structural problem. Second, the economy for those people already born in Estonia has been in a prolonged decline, and hasn't really started to recover, despite the statistical sleight of hand."
Helme also said that politicians tend to think that the public doesn't recall what was pledged or said earlier.
"Lauri Läänemets is now talking about reducing VAT on food. A couple of months ago, we submitted that same proposal, and the Social Democrats voted against it. We've submitted it three times in this Riigikogu session. Every time the Social Democrats voted it down, but only after you fell into opposition did you discover it was a good idea," Helme continued.
The EKRE chair added that the tax system has been rendered complex precisely thanks to the coalition, saying that it is the coalition itself which has actually established bureaucracy in the Estonian state.
Kallas' response was to chuckle and note to Prime Minister Michal, standing next to her, that Helme is "quite an amusing man."

Helme continued: "It is not credible when Kallas says the government is working hard, yet you've been given a grade of 'One'. Not even a 'Two', but a 'One,' by the voters. You literally don't have any voters left. That must mean you're doing a bad job."
Finally, Helme stated that Estonia urgently needs elections on an extraordinary basis. "We genuinely need snap elections, as I don't see any alternative to this current government," he said.
Show host Andres Kuusk then asked Kõlvart whether he had anything positive to say about the coalition, but he was unable to.
Kõlvart said: "I would instead ask how the economy is supposed to grow. Three percent would get us the necessary resources. There was a lot of talk about slashing bureaucracy, but I would remind the coalition partners that in every coalition agreement it was stated clearly — we will reduce bureaucracy and increase investments."
There have been three successive coalition agreements signed by Reform and Eesti 200 since spring 2023, the first two of them also signed by the Social Democrats (SDE).

Estonia's top priority is security, Kõlvart went on.
"Please remind me — wasn't this also in the first, second, and third coalition agreement? The main issue is that you are not offering any real solutions. Saying it was 3 percent, now it will be five, and ideally it'll be seven... That doesn't magically create new resources from anywhere," he continued, referring to defense spending as a percentage of GDP per year.
According to Kõlvart, the coalition's proposed abolition of the tax hump does not support poorer people in society, but instead the wealthy.
"You are fibbing. With the removal of the tax hump, it is the higher earners who will benefit the most, while it's the poorer people who will pay for this reform, and this will cost the budget €500 million," the Center leader added.
The prime minister shook his head at these remarks, and replied that economic ignorance cannot be "cured" during a single broadcast.

He said: "Abolishing income tax from the first euro earned, which we are doing together with Eesti 200, of course benefits lower-income people more as they are the ones who would have otherwise been taxed the most," adding that the Center Party could at least praise that aspect of the coalition's performance.
Michal also pointed out that Estonia is currently at the start of the upward slope of economic growth, adding that the current situation is normal. People and businesses will soon be doing better, he said.
Reinsalu said that the Estonian people are not particularly interested in politicians squabbling with each other, but are instead focused on what is happening in real life.
"Dear Prime Minister... Inflation in Estonia is forecast at 6 percent. In Latvia and Lithuania, if we look at their forecasts, it's actually two to three times lower," Reinsalu went on.
"Swedbank's assessment was very simple — the purchasing power of salaried Estonians will decline this year. People in Estonia don't care about political bickering. They go to the store every day, and see what prices are doing," the Isamaa leader said.

Reinsalu also opined that novel taxes are just around the corner for the Estonian people.
"When you say that this money from taxes is going on security, you know full well that this isn't the case. That money goes towards servicing the Reform Party's tax hump project, which, in my responsible view, is too costly for Estonian society."
The prime minister responded by saying that Reinsalu's claims were baseless, and that it was actually the Center Party and Isamaa who implemented the tax hump, when they were in office.
Reinsalu continued in the same vein: "You have established utter tax chaos in the Republic of Estonia, and now you're talking about dismantling some elements due to the frustration and discontent in Estonian society becoming high enough," Reinsalu concluded.
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Editor: Johanna Alvin, Andrew Whyte
Source: 'Esimene stuudio,' interviewer Andres Kuusk