Finance Committee sent the supplementary budget bill to the first reading

Chair of the Finance Committee Annely Akkermann said that according to the Bill, the government sector deficit would be reduced to under 3 per cent of GDP to comply with the budgetary rules of the European Union. “All ministries contribute to cutting costs, involving their subunits and foundations wherever possible, and save mainly on their operational and running costs. The savings in ministries amount to around 50 million euros,” Akkermann referred to the data set out in the Bill. She added that it was planned to conduct the proceedings on the Bill as a matter of urgency. The supplementary budget helps keep the finances of the state on a sustainable path.

Akkermann said that the Government had agreed upon the supplementary budget measures in the total amount of 183 million euros, which would improve the budget position by 173 million euros, including savings measures in the extent of 115 million euros and revenue measures, like increasing of dividends and supplementary income tax receipts, in the amount of 68 million euros

Member of the Finance Committee Aivar Kokk said that the plan for supplementary budget presented by the Government was too modest. “Actually, they try to save only 50 million euros. It is on the same level as the cost of the Environment Building,” Kokk explained. He added that the supplementary budget would have a far-reaching impact on future tax receipts: grants to foundations and companies would be cut by 6 million, which, according to the explanatory memorandum, would reduce the national tax revenue by the estimated amount of 20–30 million euros next year.

Minister of Finance Mart Võrklaev explained that the Government did not plan to cancel major investments, but budgetary position would be influenced by the postponement of some investments. The Government has set a target that 70% of approved investments have to be committed by August this year, in order to meet the investment budget to the maximum extent by the end of the year.

Võrklaev said that funding for national defence, as the highest priority sector, would not be reduced by a negative supplementary budget. However, the area of government of the Ministry of Defence, in solidarity with others, will also find ways to save on labour and management costs. The freed-up budget will be channelled into improving defence capability. In the area of government of the Ministry of the Interior, the savings will be made at the expense of one-off costs, in the amount of around 3 million euros.

This time, the economy measures of the budget do not concern the foundations of museums, theatres and concert institutions, as well as the legal persons governed by public law.

The state budget does not mention hospitals, but they, too, have been instructed to improve the budgetary position, reducing their operational expenses at the level of 1%.

According to the budget, the amount of dividends of the State Forest Management Centre has been increased, and the supplementary dividends of Elering AS have also been taken into account by an order of the Government of the Republic. In addition to that, the reserve of the Government of the Republic will be reduced, this applies to both the non-assigned reserve and the special-purpose reserve.

The Bill justifies that the reduction of the state budget deficit is also a preparatory step for drafting the next year’s state budget, where it has to be ensured that 80% of the economy measures are of a permanent nature and meet the budget deficit reduction target for future years.

The Finance Committee decided to send the Bill on the State’s Supplementary Budget for 2024 (456 SE), initiated by the Government, to the first reading at the plenary sitting on 10 June, with the motion to conclude the first reading of the Bill. The deadline for submission of motions to amend was set at 4 p.m. on 12 June.

Riigikogu Press Service
Gunnar Paal
+372 631 6351, +372 5190 2837
gunnar.paal@riigikogu.ee
Questions: press@riigikogu.ee

Link uudisele: Finance Committee sent the supplementary budget bill to the first reading

Source: Parliament of Estonia