Prime Minister Kaja Kallas made a political statement in connection with next year’s state budget

NordenBladet —

Today, Prime Minister Kaja Kallas made a political statement before the Riigikogu in connection with the submission of the State Budget for 2022 Bill. After the statements of the factions, the sitting continued with the deliberation of the matter of significant national importance “How to achieve a restriction-free Estonia?” initiated by the Estonian Centre Party Faction.

Prime Minister Kaja Kallas said that the presented state budget is the first from her government. “I am proud of this budget because it is a budget of good news, which will help us to keep the people in Estonia safe, and support the ongoing development of the Estonian economy,” Prime Minister said. “This caring and responsible state budget has come into being mainly thanks to the speedy recovery of our economy after the crisis.”

The revenue volume of the state budget is EUR 13.13 billion, the volume of expenditure is EUR 13.64 billion, and the volume of investments EUR 716 billion. Next year’s tax burden is 33.7 % of the GDP, so less than this year.

The Prime Minister highlighted the three main directions of the state budget – getting the daily expenditure of the state under control, investing into people, and ensuring a rapid a sustainable development for Estonia.

The government will start using the budget to patch up the hole that has been torn in the purse of the state over the last years, setting its sight on reducing the deficit to below 3% as early as next year. According to the budget, the state debt burden will remain within 20% of the GDP next year, reaching EUR 6.4 billion, and EUR 7.8 billion by 2025.

There are funds planned for increasing the salaries of teachers, health care workers, police officers, rescue workers, and cultural professionals. The minimum salary of teachers and cultural professionals will grow by more than 7%. The minimum salary of police officials will increase by nearly 5%, and for rescue workers by nearly 12%. The average pension would increase by 7%.

The minimum hourly pay for doctors and nurses will increase by more than 7%, and fore care workers by 10%. The salaries of care providers that are funded by the state will match those of the nursing staff.

Kallas also shone a light on the invisible victims of the pandemic, which is why the budget allocates funds for mental health, and finances activities to fill educational gaps for children. A family mediation system will also be built up.

The Bill should increase the revenue basis of local governments by more than EUR 100 million, complemented by more than EUR 10 million for children’s hobby education.

The Prime Minister affirmed that the defence budget will remain at two percent of the GDP. The next year’s budget will include EUR 103 million more for national defence compared to this year, taking the total to EUR 750 million, which forms 2.3% of the GDP.

The budget also allocated more funds to Estonian medium education. EUR 8 million is intended for developing Estonian medium education system and for involving an Estonian speaking assistant teacher in kindergarten and general education school classes with a different language of instruction.

EUR 30 million is allocated for developing the digital state and ensuring cyber security. R&D funding is increased by EUR 29.5 million to a total of around EUR 300 million.

The head of government said that all the excise duty increases that had been previously planned would not take place next year. “We will not increase excise duties because we do not want to accelerate the price hike. We also plan to add measures to the budget that compensate for the high price of electricity,” Kallas said. “If the price of electricity remains at an unreasonably high level for a long time, we will help to reduce its effect on our people and businesses. The people must not feel confused or anxious about possible price shocks on energy markets.”

Kallas added that the 2022 budget also contributes towards the further future goals mentioned in the strategy, as well as making sure that the Estonian people and the state are well taken care of in the present. She added that the European Commission would confirm a recovery plan for Estonia next week, which would attract investments into the green and digital projects of the public sector.

Representatives of the factions took the floor during the debate.

Helir-Valdor Seeder (Isamaa) was critical of the fact that the Bill did not include measures for alleviating the drastic rise in the price of electricity for Estonia’s economy. He listed hybrid warfare and problems with illegal border crossings as unresolved challenges, and deplored that the pressing issue of building border barriers as soon as possible wad been ignored. Seeder believed that the increase in the salaries of public sector workers was not enough to compensate for the inflation.

Seeder felt that it was an insult to the old age pensioners that the extraordinary increase in pensions and the income tax exemption on pensions will only become valid on 1 January 2023. He stressed that the pension reform has already started, people have already been paid out their money and the revenue on this has already reached the state budget this year, which is why the extraordinary increase in pensions should be carried out on 1 January 2022.

Martin Helme (Estonian Conservative People’s Party) also asked why the increase in pensions would not take place next year already, and reminded the Riigikogu that one of the objectives of the second pillar reform was to allow the social taxes paid today to be paid to those who receive a pension today.

Helme also said that the 2022 budget included a EUR 600 million deficit. He sees the bulk of the cuts planned in the budget Bill as deceitful i.e. virtual, whereby an amount is moved from one budget item of a ministry to another budget item, keeping it at the same level or even increasing it.

Indrek Saar (Social Democratic Party) called next year’s state budget a feat of prestidigitation. He pointed out that on the one hand the Minister of Finance is talking about cuts and calls to save money, yet on the other hand additional millions are distributed here and there, although the sources for funds to cover those millions are not known.

Saar explained that due to rapid economic growth, the deficit in Estonia’s state budget next year would be reduced by EUR 400 million, yet the plan to cut EUR 50 million in the spring is still standing. Saar sees the opportunities for children’s hobby education reducing instead of expanding because EUR 4 million would still be erased from this item, albeit instead of the EUR 7 million planned this spring. The pay rise for teachers is clearly insufficient in a situation where there is an ongoing salary race in Estonia and the average salary will increase by twice that much during the same period.

Mart Võrklaev (Reform Party) listed the priorities of his party. The 13.1 billion revenue and 13.6 billion expenditure in the state budget is something that we must first and foremost thank the Estonian people and businesses for, because they have restarted our economy. He added that the government’s decisions have played their part, because a decision was made not to keep empty cuts in the budget.

Võrklaev also stressed the efforts of the government in ensuring a worthy pay to frontline health care workers, police officers and teachers, but also to other state employees for their valuable work. He also referred to the defence expenditure, building the external border of Estonia, and transition to Estonian medium education. Võrklaev affirmed that the government had made a fundamental decision and that the funds freed with the disintegration of the second pillar would not be taken out of the pension system.

Erki Savisaar (Centre Party) did not agree with the criticism of the opposition. He named pension increase as a priority. Next year, pensioners can count on the average increase of EUR 342, and a two to three times higher increase can be expected in 2023 as well. Support for pensioners living alone will increase from EUR 115 to 200 next year.

Savisaar highlighted transport related expenses in the budget Bill. EUR 400 million is planned over the next four years to support public transport. Several regional plans will also receive funding, such as a permanent connection in the Suur Väin Strait, Tallinn orbital railway, or thematic plan for mineral resources in Harju County. Road construction and maintenance work will also continue, e.g. reconstructing the Võõbu-Mäe stretch as a four-lane road, the Kose-Mäo stretch, continuing to build the multi-level crossing of Riia Road in Tartu, and constructing the new four-lane Pärnu-Uulu stretch. We can also expect the electrification of the existing railways and the completion of six additional electric trains, as well as the ongoing design and construction work of Rail Baltic.

At the deliberation of the matter of significant national importance “How to achieve a restriction-free Estonia?” initiated by the Estonian Centre Party Faction, reports were given by Minister of Health and Labour Tanel Kiik, North Estonia Medical Centre Foundation Medical Director and member of the COVID-19 Scientific Advisory Board Peep Talving, Professor of the Institute of Biomedicine and Translational Medicine of the University of Tartu and Head of COVID-19 Scientific Advisory Board Irja Lutsar, and Member of the Riigikogu Andrei Korobeinik.

Minister Kiik gave a summary of the infection indicators and correlated the increased number of vaccinations with the reduced hospitalisations. He explained that the main objective of vaccination is to safeguard lives and health, not reduce infections.

Kiik sees it positive that vaccination rates are higher among the older population groups. Among the adults across the country, about 67 percent have received one shot; in the 60+ age group, this indicator is nearly 73%. The highest vaccination rates are among the 70–79 year old age group, where nearly 77% have received at least one shot. He feels that more work needs to be done with the 80+ age group, where two out of three are vaccinated. Around one half of the 12–17 year old age group is vaccinated.

According to Kiik, about 70% of Estonia’s population has achieved a certain protection by now. As far as opening up the society is concerned, Kiik sees a need to make stronger efforts. “We are on the home stretch, so increasing vaccination rates by just a few percentages would give us the option to gradually start alleviating the control rules, the restrictions and measures that we have in place today, and then we can all contribute towards encouraging people who are still on the fence or who have still not had time to get vaccinated to do this at the first opportunity,” the Minister concluded his presentation.

Professor Talving outlined the COVID-19 disease and its general progression, spoke about the tolerance limits of the hospitals and how much the planned treatments have suffered as a consequence.

The most difficult moment in hospitals was early April 2020. As an example, the North Estonia Medical Centre Foundation had two intensive care wards reserved exclusively for COVID treatment. A traffic lights system has now been put in place to classify the tolerance levels of hospitals. Planned treatments can already be limited if the light is amber, and as the infection numbers progress, so will planned treatments also be gradually restricted.

According to Talving’s estimation, 21,642 people – our neighbours, friends, parents, family members – have not received their planned treatment. Looking into the future, it is clear that access to vaccination must be made easy, otherwise we would again need to start limiting planned treatments.

In conclusion, Talving expects the burden to hospitals to be a little lower than during the second wave, however the third wave will last longer. He stressed that even without restrictions, the hospital network must ensure emergency medical care in Estonia.

“Planned treatment will be guaranteed 100 percent if we have up to 150 patients in the general ward, and 100 percent if we have up to 20 patients in intensive care,” Talving explained. “The successive waves accumulate a deficit. And vaccination is key. Our neighbours, families, relatives – everyone will lose in treatment capability if we do not get vaccinated in larger numbers.”

Professor Lutsar said that as of the previous week, 223 million COVID cases had been registered around the world, and 4.6 million had died. In Estonia, COVID mortality is relatively low, around the one percent level.

Lutsar sees COVID clearly as an illness of the elderly, and particularly elderly men. A man who is over 80 and is hospitalised is more than two times likely to die compared to a woman his age.

Lutsar also explained that the presence of antibodies and immunity are not exactly one and the same thing. She said that for the delta strain, it is not possible to achieve herd immunity with the current vaccines. We need to talk about individual immunity, the presence of antibodies, and the need for everyone to take care of themselves. Professor also added that recovery from the infection gives an excellent immunity.

Lutsar concluded that a restriction free life means the ability to live together with the virus. She advised to accept the virus. “If we can prevent the difficult cases, both sides should actually be happy. The virus is not actually interested in destroying us because that would end up destroying it, and this is certainly something that it does not want,” Lutsar explained. 

The Professor said that the capability of the medical system is the decisive factor. She believes that the elderly care system should prevent the spreading of the virus instead of favouring it. “Let’s do everything in our power to stop the virus from spreading uncontrollably: let’s get vaccinated and accept that the masks are not going anywhere,” was Lutsar’s advice. “And let’s make decisions based on science, not emotions.”

MP Korobeinik summarised the discussion by saying that the main and actually the only way out of the restrictions is vaccination, particularly among the elderly, because it is the elderly unvaccinated patients who are causing the hospital crisis.

He recommends concentrating on positive solutions instead of applying pressure. First off, we need to acknowledge honestly that there are already such low numbers of unvaccinated people that we would be able to approach them individually. He proposed establishing a vaccine emergency unit that could be ordered to your home as easily as an online order from the grocery store.

Another potential solution would be additional remuneration, i.e. 13^th salary to vaccinated staff of care homes, e.g. at the end of this year, and also to those who have already been vaccinated earlier. He has calculated that this would take about three million euros. Korobeinik admitted that the state awarding people for vaccinating may sound silly but that this would save lives and not only the lives of the elderly clients, but also the lives of the people who would not consequently be left without medical assistance.

Korobeinik stressed the need to understand that the stigmatisation of the unvaccinated would lead to more harm than good, and could very easily get out of hand. “Not only does it drive a wedge in the society, it also turns someone who is on the fence into an active anti-vaxxer,” he said. “If you are attacked you will inevitably get defensive. A counter-attack with the vaccine does not increase the vaccination rate, but can instead lower it.”

Korobeinik is convinced that now is the time to establish an Estonian vaccine injuries foundation, which already exists in countries like Denmark, Sweden, and Norway, which are already doing away with the restrictions, but also in Canada, Germany, Italy, New Zealand, and many other countries. 

Korobeinik explained that if vaccination leads to negative health effects, the individual or their family would receive payments from the foundation. He admitted that money does not bring anyone back from the dead, but neither do insurance policies; however, the vaccine injuries foundation would enhance the sense of justice in the society and reduce polarisation. He considered the expense of the establishment of the foundation as marginal.

Korobeinik expressed hope that we would be able to overcome our differences of opinion in the near future and take the necessary steps to come out of the corona crisis and its restrictions in only a couple of months, and that in future we would be able to cope even better as a country in similar situations.

During the debate, Urmas Reinsalu (Isamaa), Peeter Ernits (Estonian Conservative People’s Party), Margit Sutrop (Reform Party), and Jevgeni Ossinovski (Social Democratic Party) took the floor.

Photos of the sitting (: Erik Peinar, Riigikogu)

Deliberation of matter of significant national importance (Erik Peinar, Riigikogu)

Source: Parliament of Estonia