“The budget strategy must put the public finances in order, review public expenditures, and identify savings. The private sector has had to reduce costs during the crisis and the the public sector must make a contribution as well. We must all make an effort to raise the salaries of, for example, teachers and providers of internal security who have worked long hours with a heavy workload,” said Prime Minister Kaja Kallas.
“The government must make cuts so that Estonia would be among the winners. We are putting the state’s finances in order and we are in solidarity with the private sector, which has had to reduce costs during the crisis. Therefore, we decided that all ministers reduce the operating costs in their areas of government,” said Minister of Finance Keit Pentus-Rosimannus. “This will not be an easy task, because it is always easier to use more tax money than to review the expenses that we have become accustomed to. However, the savings from running costs will make it possible to, next year, bring about a salary increase of at least three percent for, among others, teachers, cultural workers, and those working in the area of internal security without increasing the deficit,” added Pentus-Rosimannus.
With the new state budget strategy, the budget will move strongly towards structural balance. Proposals to save operating costs will be made from within each area of government. A review of expenditures and revenues is also possible during the autumn state budget discussions, when the new economic forecast by the Ministry of Finance is completed.
With the current agreement, the salary fund of certain sectors, such as internal security, teachers, cultural workers, etc., will increase by at least three percent in 2022.
The aim of the budget strategy is to set out activities and funding in the longer term based on the priorities of the government, future forecasts, and global trends. The budget strategy links the major objectives of the government, the plans and activities of the ministries, and their funding for the next four years.
One of the bases of the budget strategy is the economic forecast published by the Ministry of Finance at the beginning of April, which provides an overview of economic developments and the financial capabilities of the state. The Fiscal Council, bringing together independent experts, has confirmed that the forecast is an appropriate basis for fiscal policy-making.
The government will approve the budget strategy and the state budget for 2022 next week, and will present the document at a press conference. The government will discuss the draft state budget in autumn before submitting it to the Riigikogu.