Government approves 2020 state budget

Prime minister Jüri Ratas (Centre) announcing the coalition approval of the 2020 state budget, flanked by finance minister Martin Helme (EKRE) and Isamaa leader Helir-Valdor Seeder.
Prime minister Jüri Ratas (Centre) announcing the coalition approval of the 2020 state budget, flanked by finance minister Martin Helme (EKRE) and Isamaa leader Helir-Valdor Seeder. Source: ERR

The coalition government has approved the 2020 state budget and is to present the budget bill to the Riigkogu Wednesday, Baltic News Service reports. The budget sees a new, target-based format, with programs under the auspices of the various ministries.

The budget is balanced, or in slight surplus, with expenses at €11.6 billion and an estimated volume of income at €11.8 billion (though structural balance has not been met yet – see below).

The budget was approved at an extraordinary government sitting on Tuesday, and the agreement announced at a press conference from 4 p.m. In addition, amends to the 2019 state budget were approved at the same sitting.

The coalition had five targets in mind, BNS reports, when drawing up the budget bill: a family-friendly Estonia, a coherent society, a knowledge-based economy, effective governance, and a free and protected state, government spokespersons said.

One-year budget, four-year budget strategy

The state budget bill is based on the economic forecast of the Ministry of Finance published in mid-September as well as the budgetary strategy for the next four years, which was adopted in spring. The purpose of the latter is to plan long-term activities and expenditures, keeping in mind the government's priorities, forecasts, and global trends. 

The state budget itself, which is drawn up every fall, specifies the activities planned with the four-year strategy for the next year alone. The revenue collection and expenditure plan is in essence based on programs prepared by ministries.

2020 sees the appearance of a new budget structure, which will consist of programs led by ministers, meaning the government sets performance targets for these programs and, with state authorities are to providing services of agreed quality, volume and cost in order to meet those targets.

Rises in defense, R&D spend, also in teachers, emergency services and other state salaries

According to Prime Minister Jüri Ratas (Centre), defense expenditure is to increase to €615 million next year, while research and development funding ois to rise by €16 million, to €216 million.

Other rises are to be seen in first responders' salaries, as well as those of police personnel, teachers and state social workers, as well as cultural workers.

Structural deficit is to be 0.7 percent of gross domestic product (GDP) in 2020, and 0.2 percent of GDP in 2021, with the budget set to be in a structural balance from 2022.

2019 state budget amends

The extraordinary sitting Tuesday also saw amends approved to this year's (i.e. 2019) state budget, as per tradition.

The amendments will not alter the total volume of the budget's expenditures and revenues, but will specify the expenses of ministries and other institutions for the current year. The proposals are based on the desire to use public money reasonably and purposefully, government spokespeople said.

The amends takes into account changes on the current budget needed to achieve its set goals, BNS reports, using money freed up from changing forecasts concerning expenses over the year for necessary activities. 

A total of 58 amends are planned within the 2019 state budget amendment bill, redirecting funds between different ministries.

As noted, the budget bill has to be voted on at the Riigikogu. The coalition government currently has 56 seats in the 101-seat chamber.

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Editor: Andrew Whyte

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