State budget strategy talks to continue Thursday

The Estonian government dedicated two days at Vihula Manor to discussing the state budget strategy.
The Estonian government dedicated two days at Vihula Manor to discussing the state budget strategy. Source: Sergei Stepanov/ERR

The Estonian government wrapped up two days of state budget strategy talks at Vihula Manor on Tuesday evening, but budget talks will continue on Thursday.

While two days at Sagadi Manor sufficed for concluding state budget talks last year, things didn't go as easily this time around. According to the three parties involved, this was due primarily to two factors: the makeup of the new government, and less freedom in the budget than last year, reported ETV news broadcast "Aktuaalne kaamera."

Despite talk in the early stages of budget deliberations that a new approach is needed when it comes to the state budget, by now it is clear that no cardinal changes will be made.

Minister of Finance Martin Helme (EKRE) said that some coalition parties have been prepared to see budget rules changed, but the government will currently move forward according to the State Budget Act.

"Which also means that we have to diligently seek areas for potential savings, so that we can more effectively govern with the money that we do have, which is also in line with our promise to carry out state reform," he explained.

The government will continue discussing the state budget on Thursday, and, if necessary, next week as well.

State budget deliberations are the first serious task that the new government has had to tackle, and the three coalition partners — the Centre Party, the Conservative People's Party of Estonia (EKRE) and Isamaa — said that while the talks themselves have been complicated, this process has brought them together.

"The coalition is stronger by tonight than it was two days ago," Prime Minister Jüri Ratas (Centre) said on Tuesday evening.

Alcohol excise duties set to be lowered

Helme said that he was optimistic that alcohol excise duties would be lowered as of July 1 already.

"Discussions are underway regarding when they will be lowered and to what extent, and whether we will lower it by the same amount on both [low- and high-alcohol beverages]," he said. "As a result of today's discussion, we have achieved significantly more consensus, but we have to keep working out the details."

Isamaa chairman Helir-Valdor Seeder likewise noted that the lowering of alcohol excise duties was among other issues discussed at Vihula, but no final agreements were reached on the matter.

"We are closer than ever before to reducing the alcohol excise duty," he nonetheless highlighted.

Ratas, meanwhile, confirmed that the coalition has not backed down from the Centre Party's campaign promise of an extraordinary pension hike. "In what amount, and in what year, has to be determined by the state budget strategy," he noted.

The prime minister also briefly touched on the wages of rescuers, police officers and education professionals.

"Wages have increased in the past three years, but it definitely isn't enough in the internal security and education sectors," he said. "But we have to take our actual opportunities into account. We cannot promise anything that does not have [financial] cover."

Government borrowing looking likely

Asked whether the state intends to start borrowing, Helme said that this was one element that made up part of bigger plans.

"We have to decide two things," he explained. "What are those things that we want to accomplish with borrowed money — this is spending money that should start leading to returns. We also have to remember that we use this financing in such a way that we do not break any rules agreed upon in Estonia or Europe in general."

The 2020 state budget will be drawn up separately, describing in more detail next year's planned income and expenses. According to an amendment to the State Budget Act passed in 2017, this year marks the first year that the state budget strategy and the state budget bill will be drawn up concurrently, spokespeople for the government said.

The government has to approve the state budget bill for the next year by no later than the end of May. If necessary, the government will continue state budget negotiations this autumn, based on this summer's economic forecast.

Next year's state budget must be passed in the Riigikogu, which will discuss it this autumn.


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Editor: Aili Vahtla

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