Lavly Perling: The chasm between political rhetoric and government decisions

Fine speeches are not enough if action does not follow. Estonia's leaders are afraid to make decisions, which will have severe social, economic and security-related consequences for Estonia, writes Lavly Perling.
When a family goes through difficult times brought on by someone losing a job or the breadwinner falling ill, the first thing people think about is how to get through it — how to manage with lower expenses against the backdrop of reduced income.
It is not easy to explain to children or teenagers why they will not be getting expensive graduation gifts this time around or why a trip to a faraway warm destination has been canceled and replaced with something more modest. Still, it is sensible to do so, difficult as it may be, because in the long run it is better for everyone. It seems like common sense and a forward-looking approach. Our governing parties, however, do not proceed from this simple logic or necessity and there is a chasm between their words and their decisions.
Prime Minister ignoring Bank of Estonia governor
Speeches at party events held by the Reform Party and Eesti 200 are polished affairs, full of talk about the future, confidence, freedom and the need for radical reforms. And then there is real life and real decisions: nearly 30 tax increases and changes over the past three years, a rise in the tax burden from 33.7 percent to 35.2 percent of GDP and national debt surpassing the €10 billion mark.
In six years, the debt has quadrupled, climbing past €10 billion. This year, the deficit will rise to 4.5 percent of GDP and interest costs are growing at full steam. While government debt currently stands at 24 percent of GDP, by 2030 it will exceed €20 billion, reaching 39 percent of GDP.
Amid all this, the Riigikogu is debating the adoption of a supplementary budget. And not a negative supplementary budget that would help take the first step toward putting the state budget in order — instead, the intention is to increase spending even further.
Or take another example. Bank of Estonia Governor Madis Müller called on political parties to reach a cross-party agreement aimed at moving toward a balanced budget because Estonia's current budget trajectory is a road to ruin. Of course, the governor of the Bank of Estonia is right.
Yet the governing parties are still pressing ahead in parliament with a supplementary budget that increases spending. A meeting of party leaders has not even taken place so far. Worse still, [Prime Minister] Kristen Michal, chairman of the Reform Party, is simply ignoring the proposal and invitations to discuss it. Instead, he is focusing on a supplementary budget whose content can be summed up in three keywords: cosmetic reshuffling, pushing major expenses into future years and treating [state forest manager] RMK dividends as revenue. The mindset seems to be: after us, the flood.
A third example of the chasm between words and deeds is the governing parties' rhetoric about austerity and reforms. When Parempoolsed, the only party to put forward concrete spending cuts, does so, the response from the prime minister or members of his party is alarmism and drama — but what is absent are proposals of their own.
It is equally embarrassing to read about radical reforms from a minister who says they're afraid to sign documents because they might get arrested, or from a party whose two ministers publicly argue with each other even over drug policy because the party lacks any coherent political worldview.
What is the point of advisory bodies when courage to decide is simply lacking?
There is a great deal of discussion in society about scam letters whose damage runs into the tens of millions. Soon it will also be time for political scam letters because the current parliamentary parties will once again begin promising everything to everyone. That is fraud.
Parempoolsed warned four years ago that without change, Estonia would face a lost decade. By now, we have already spent nearly half of that time stuck in stagnation. The economy is languishing, no one dares or is able to say what the tax burden will look like in three years' time, inflation remains among the highest in Europe and continues to erode people's purchasing power, reforms exist only in rhetoric and decisions are neither being made nor forthcoming.
To be fair, the prime minister occasionally plays at finding solutions. To do so, he creates advisory councils. Leaving aside the question of the legitimacy of such councils in a democratic state, I understand that entrepreneurs are indeed stepping in to help the government tackle issues such as cutting bureaucracy or implementing AI and they deserve respect for that. Still, councils and listening sessions are of little use if the political level — which, after hearing out the best experts in their fields, should ultimately have the courage to decide — does not dare to do so.
Four years ago, then-Prime Minister Kaja Kallas said that the Reform Party could not tell the truth about taxes because otherwise they would not have received votes. If they once again head into elections based on deception, unwilling to speak honestly to the public or offer solutions capable of leading the country out of crisis, the consequences will be existentially painful for the Estonian state as a whole.
Untidy fiscal policy a source of hardship for all Estonia
Returning to the example of an ordinary household, avoiding difficult conversations and refusing to make decisions would, in the long run, drive any household into hardship. Debt would be left to the next generation, the household would grow poorer and the future would appear increasingly uncertain — even though everyone deserves both the truth and hope.
Exactly the same consequences await the state budget if the government and parliament fail to recognize the seriousness of the situation immediately and do not begin moving in the right direction now with a negative supplementary budget. The indecision of the Reform Party will have severe social, economic and security-related consequences.
The supplementary budget deepens the growth of national debt. We are borrowing more at a time when Estonia's public debt is already growing at a breakneck pace. Every new billion reduces the freedom of action available to future governments. Interest costs are rising rapidly. In an environment of high interest rates, borrowing is already expensive. Money spent on interest payments cannot go toward teachers' salaries, healthcare or national defense.
Without a negative supplementary budget, money is being spent irresponsibly without carrying out radical reforms, which means systemic problems are simply being swept under the rug with borrowed money. In reality, those problems should be resolved because endless borrowing is impossible. Instead, we are postponing the search for solutions.
Likewise, a state living on debt continues to fuel inflation and people lose purchasing power. Yet our greatest problem is the lack of economic growth and that will not be created through higher government spending on all manner of social benefits, but through investment, entrepreneurship and productivity growth.
The fastest-growing national debt in Europe undermines Estonia's financial credibility. That means investment will leave the country. Preparedness for crises will decline because borrowing capacity that may be needed in a future emergency is being spent on everyday expenses.
Socially, this means two harsh realities. First, problems are being pushed onto future generations because of cowardice and indecision. Second, if people are not told the truth about how serious the situation is, and that truth reaches them only later through tax hikes or especially painful spending cuts, public trust in the country's leaders will decline significantly.
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Editor: Marcus Turovski











