Stenbock house, 16 December 2015 – Tody Prime Minister Taavi Rõivas, Minister of Health and Labour Jevgeni Ossinovski and Minister of Social Protection Margus Tsahkna gave an overview of carrying out the Government’s activity programme in 2015.
The Government’s priorities are strengthening Estonia’s security, promoting economic growth and reducing labour-related taxes, improvement of the subsistence of low-paid workers and developing an environment that supports childbirths, state and local administration reform and developing peripheries and preparing for the presidency of the European Union and carrying it out successfully.
To ensure security Estonia will continue keeping defence expenditure on the level of 2% of GDP, to which the expenses related to receiving allies are added. The Government has continued strengthening independent defence capabilities as planned and applied for the strengthening of NATO’s deterrence posture and increasing the presence of allies.
Several defence infrastructure objects have been completed this year: the NATO headquarters were opened in June and in February the Government made a principled decision to allocate 40.6 million euros over five years for the construction of infrastructure promoting the presence of allies and to allocate this money in addition to the 2% defence budget. Estonia also contributes to strengthening security internationally – we have supported the reducing of instability caused by Syria’s civil war, fight against the refugee crisis and terrorism. For example a police mission unit was sent to Slovenia and in May a team-size unit of the Defence Forces went to Lebanon.
To increase internal safety and ensure public order the salary fund of the police, officials of the rescue service and other internal security employees will be increased by 4% next year. The border line of the Estonian-Russian border was cleaned and the first border post has been placed there. In addition the Narva border point has been renovated and the renewed Narva-2 border point will also soon be opened. The Government also presented the Estonian-Russian border treaty to the Parliament for ratification.
To accelerate economic growth the Government reduced labour force taxation, which helps to increase competitiveness by shifting the tax burden more on the taxation of goods damaging health and polluting the environment. The Government reduced the rate of social tax from the current 33 per cent to 32 per cent by 2018. Tax exempt income will increase to 205 euros per month during the next four years, thereat to 170 euros in 2016. The additional basic exemption applicable to pension will continue to increase so that the average pension will remain exempt from tax.
To promote economic growth the Prime Minister has called an economic development working group consisting of experts and the Team Estonia cooperation platform is being created to improve the export capacity of Estonian companies and attract foreign investments into Estonia. The Government also simplified the opportunities for applying for e-residency.
A 5 million euro support measure for areas of growth was opened for enterprises to increase the productivity of enterprises and support export capacity. The availability of growth companies capital is improved by a 7 million euro support measure to accelerate start-up enterprise, i.e. Startup Estonia.
The work ability reform launching next year will bring more workers to the labour market and gives and opportunity to be necessary for the society. To increase the subsistence of low-paid workers the Government will launch a repayment system from 1 January 2016. Depending on the structure of income and tax exemptions the support is a maximum of 59 euros per month from 2017. In addition to increase social security from 2016 the subsistence level is 130 euros per month. The Government also agreed on the principles of the support scheme for pensioners living alone.
To improve the subsistence of families with children the Government decided to increase child support to 60 euros by 2019. From 1 July 2017 the benefit for large families will come into force for families with three or more children. The Government also approved the amendment, with which the housing benefit programme for large families will be extended to families with at least three children.
Launching the state reform is the first specific response to the forecast of population decline. To carry out the state and local administration reform the Government has agreed on the principles of the reform and the merging criteria of local governments. The content of the state reform is making principled choices on which activities, services and tasks to do differently compared to so far, what to do less in order to direct more resources into more important areas at its expense.
To reduce the volume of the Government, decisions have been taken in 2015 for structural reorganisation of the authorities of the government sector, consolidation of support services, increasing the efficiency of the Government and administrative arrangement, converting to an accrual-based budget and introducing spending review.
For the Estonian presidency of the European Union taking place in 2018 a supplemented preparation activity plan, Estonia’s European Union policy for 2015-2019 and a list of potential managers, who will represent Estonia in the leading positions of the negotiations of the EU Council have been approved.
Report of the Government’s activity programme: https://valitsus.ee/sites/default/files/content-editors/arengukavad/valitsuse_tegevusprogrammi_taitmise_aruanne_2015.pdf