Estonia: The Bill on next year’s state budget passed the second reading in the Riigikogu

NordenBladet — The Riigikogu concluded the second reading of the Bill on the coming year’s state budget (254 SE) and sent it to the third reading. The deadline for submission of motions to amend is 30 November.

Under the State Budget for 2021 Bill (254 SE), initiated by the Government, the expenditure of the next year’s state budget will amount to nearly 13 billion euro and the revenue will amount to nearly 11 billion euro. The gap is due to necessary investments in the restoration of economic growth, due to which the amount of expenditure will exceed the revenue growth. According to the main scenario of the forecast of the Ministry of Finance, Estonia’s GDP will shrink by 5.5 per cent this year and will grow by 4.5 per cent next year, falling short of the level of the end of 2019 by about one per cent at the end of 2021.

The next year’s state budget is based on ordinary rules and takes account of the exceptions due to the crisis. Next year, the government sector budget is projected at a nominal deficit of 6.7 per cent of GDP and a structural deficit of 6.6 per cent.

The volume of the investments planned by the government sector will amount to approximately 1.9 billion euro next year. More than 1.4 billion euro of EU support is planned in the state budget for 2021.

Tax revenue will increase to 9.3 billion euro next year compared to the approximately nine billion euro this year. Tax burden will fall to 32.7 per cent of GDP next year compared to the 33.8 per cent this year.

Of the 44 motions to amend submitted at the second reading, a consolidated motion submitted by the Finance Committee was supported. On the deciding on the remaining motions, they had not been supported at the voting in the committee because the financial sources proposed to cover them had been unacceptable, as they would have changed the achievement of the objectives set out in the budget.

Chairman of the Finance Committee Aivar Kokk said that, during the preparation for the second reading, the budget had been specified in view of the implementation of the plans in the Government’s action programme. In connection with the need to support the continuation of international maritime transport through Estonian ports and to motivate consignors to direct their trade flows through Estonian ports, the Finance Committee had proposed that the ships entering Estonian ports be exempted from the payment of fairway dues to the extent of 50 per cent until the end of next year and that the loss of revenue be compensated in the state budget. Funds had also been allocated for holding a referendum.

25 members of the Riigikogu took the floor in the debate. They analysed the content of the draft state budget and presented their positions. Jürgen Ligi (Reform Party), Kalle Laanet (Reform Party), Aivar Sõerd (Reform Party), Liina Kersna (Reform Party), Andres Sutt (Reform Party), Mart Võrklaev (Reform Party), Heidy Purga (Reform Party), Annely Akkermann (Reform Party), Vilja Toomast (Reform Party), Riina Sikkut (Social Democratic Party), Jaak Juske (Social Democratic Party), Siim Kallas (Reform Party), Johannes Kert (Reform Party), Oudekki Loone (Centre Party), Kersti Sarapuu (Centre Party), Helmen Kütt (Social Democratic Party), Leo Kunnas (Estonian Conservative People’s Party), Mart Helme (Estonian Conservative People’s Party), Sven Sester (Isamaa), Maris Lauri (Reform Party), Valdo Randpere (Reform Party), Jevgeni Ossinovski (Social Democratic Party), Peeter Ernits (Estonian Conservative People’s Party), Indrek Saar (Social Democratic Party) and Henn Põlluaas (Estonian Conservative People’s Party) took the floor.

The Estonian Reform Party Faction and the Social Democratic Party Faction moved to suspend the second reading of the Bill. The result of voting: 41 votes in favour and 54 against. The motion was not supported. The second reading of the Bill was concluded.

Two other Bills passed the second reading

The Bill on Amendments to the Tourism Act and the Consumer Protection Act (234 SE), initiated by the Government, will update the requirements for the provision of the accommodation service. The requirements that are not directly necessary or in which self-regulation works well, like in the case of quality requirements, are reduced. The definition of the accommodation service and the description of the types of accommodation establishments will be renewed. As a result of the amendments, the rules for the provision of the accommodation service will become more flexible, and the number of claims and the costs to meet the requirements will decrease.

The offering of temporary sleeping accommodation by an undertaking will be deemed to be accommodation service. Accommodation service is a tourist service which is not for residential purposes but which is intended for temporary accommodation of visitors for holiday or business or other purposes and which is offered for example by day, week or month. The introduction of the short-term (temporary) service will help differentiate the accommodation service more clearly from residential lease contracts. In the case of accommodation for a period longer than three months, the special rules for residential lease contracts already set out in the Law of Obligations Act apply.

Another major amendment is that the issues relating to the categories of accommodation establishments will remain for the sector to be arranged. In the future, in order to assign categories (stars of hotels) to accommodation establishments, it will not be necessary to apply for the approval of the minister, and the accommodation sector will be able to continue quality development without state restrictions.

New digital solutions and the changed expectations of clients are phasing out the need for separate reception rooms (“table service”) and several other services, and therefore other requirements of the Regulation of the Minister will be reduced as well. No special rules are established for the sharing economy, but the principle is that requirements apply uniformly to all undertakings.

The establishments providing accommodation will also be able to register their guests electronically and the obligation to preserve visitor’s cards in paper format will be abolished.

Under the Bill on Amendments to the Government of the Republic Act and Other Acts (merger of the Civil Aviation Administration, the Road Administration and the Maritime Administration) (236 SE), initiated by the Government, the civil aviation, road and maritime administrations will be merged. According to the Bill, the name of the new merged administration will be the Transport Administration. The merger of the authorities proceeds from a general principle of the state reform to reduce the number and duplication of administrative agencies and to improve the quality and availability of public services.

The new administration is intended to establish a centre of excellence covering different types of transport that will have the capability to plan smart mobility solutions and to implement projects covering different types of transport. With the merger, the position of the deputy secretary general for maritime affairs will be established in the Ministry of Economic Affairs and Communications.

During the debate, Kristen Michal (Reform Party), Kalvi Kõva (Social Democratic Party), Sven Sester (Isamaa), Kalev Kallo (Centre Party) and Tarmo Kruusimäe (Isamaa) took the floor.

The Estonian Reform Party Faction and the Social Democratic Party Faction moved to suspend the second reading of the Bill. The result of voting: 33 votes in favour and 53 against. The motion was not supported. The second reading of the Bill was concluded.

A Bill was rejected in the Riigikogu:

The Bill on Amendments to the Social Tax Act and the Occupational Health and Safety Act (244 SE), initiated by the SE), initiated by the Social Democratic Party Faction, provided that the employee would be paid sickness benefit for the first eight days of his or her sick leave in the cooperation of the state and the employer, so that the Estonian Health Insurance Fund would compensate for 40 per cent of the average wages of the person who falls ill and the employer would compensate for the remaining 40 per cent. From then on, starting from the ninth day, the Estonian Health Insurance Fund would bear the costs as per current regulation. The explanatory memorandum to the Bill points out that the compensation of the days of sick leave on the first eight days would help ensure that persons who fall ill or come into contact with an infection do not go to work but stay home.

During the debate, Signe Riisalo (Reform Party), Jevgeni Ossinovski (Social Democratic Party) and Mart Helme (Estonian Conservative People’s Party) took the floor.

The Social Affairs Committee moved to reject the Bill at the first reading. The result of voting: 51 votes in favour and 26 against. The Bill was dropped from the proceedings.

The new Minister of the Interior Alar Laneman took his oath of office before the Riigikogu.

The sitting ended at 1.16 a.m. on 19 November.