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Budget strategy: Government agrees on nominal surplus, structural balance

Minister of Health and Labour Jevgeni Ossinovski (SDE) and Prime Minister Jüri Ratas (Center) during budget strategy discussions, April 13, 2018.
Minister of Health and Labour Jevgeni Ossinovski (SDE) and Prime Minister Jüri Ratas (Center) during budget strategy discussions, April 13, 2018. Source: Jürgen Randma/Riigikantselei

The government concluded its budget strategy meetings on Friday with an agreement that the budgets of the next years will aim for structural balance and a nominal surplus.

"For the next four years we are planning a nominal surplus and at least a structural balance of the government sector budget. Hence the fiscal policy of Estonia is and will remain responsible. I want to thank all the ministers and officials for their strong preparation and matter-of-fact discussions, and I appreciate the team spirit that got us to this result," Prime Minister Jüri Ratas (Center) said on social media on Friday evening.

"It is the common goal of the coalition to develop life in Estonia so that more children are born in our country, economic growth reaches every individual, and everyone's feeling of safety and security would be ensured. Therefore, the coalition supports expanding the payroll of rescuers, the police, teachers, and cultural workers with higher education, and will invest more in a dependable e-government. It is also very important that the defense spending of Estonia remains above 2 percent of GDP," Ratas added.

"Estonia's economic growth has been faster than previously forecast, which in turn requires a more balanced budget policy. Rapid economic growth of course is good news for our residents and businesses, as people have work and wages are growing. For the state, however, this means carefully weighed choices are needed when it comes to investments to avoid an overheating of the economy. Also, the decisions made by the government will ensure tax peace in 2019, and we will drop the alcohol excise duty hikes planned earlier," the prime minister said.

Minister of Finance Toomas Tõniste (IRL) said that while the negotiations were difficult, the members of the coalition were ready to put off investments among other things to reach an agreement. The establishment of a conference center in Tallinn's Linnahall, for example, was postponed to 2020.

The government and representatives of the parliamentary groups of the coalition parties earler met for a two-day seminar at Sagadi Manor in Lääne-Viru County to draw up the state's financial plans for the next four years.

The government is expected to endorse the state budget strategy by end of April. Based on the strategy, the ministries will then continue to draw up a bill for the state budget for the next year. The cabinet will then discuss the budget bill in the fall, and once done pass it on to the Riigikogu.

Editor: Dario Cavegn

Source: BNS, ERR

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