Estonia will have a security-focused budget and stability regarding taxes until the next elections in 2027,” Prime Minister Kristen Michal emphasised. He said that the key principles of the new budget are sound public finances, spending cuts, clarity in defence, predictability and a focus on economic growth.
“The government will end the ongoing tax festival, with a new tax proposal popping up every month. Predictability breeds certainty and certainty breeds growth,” the prime minister stated. “The state budget will put in place a plan to cover the increased defence spending with a temporary broad-based security tax, to use it to buy munitions, to invest in security, and to provide growth opportunities for the defence industry in helping Ukraine, featuring the biggest industrial growth plan in Estonian history. We are cutting public spending to make the state more efficient, and a thorough review of public spending and activities will continue on an annual basis.”
According to Minister of Finance Jürgen Ligi, the main responsibility of the state budget decision-makers is to ensure the survival of the state: “That is just how it is – the primary task of the government is to ensure that the state endures. A country of our own is the property and interest of all its citizens, and that is why the main effort of the budget is focused on restoring Estonia’s financial sustainability. I am glad to acknowledge the ministers in this regard, because it meant a lot of sectoral and personal selflessness for everyone.”
Minister of the Interior Lauri Läänemets pointed out that alongside national defence, people’s sense of economic security is also important. “While the focus of the budget talks was on defence investments, I am pleased that we paid a lot of attention to the welfare of Estonian families, job creation outside the so-called golden rings, and the survival of essential public services. In terms of national security, people’s sense of economic security is just as important as the strength of Estonia’s border defence or the ability of the police and rescue to provide rapid assistance. It is crucial that we keep pensions growing and ensure the continued high quality of health care. It is also important for families with average and lower incomes that child allowances and parental benefits continue at their current levels. As for the security tax, I wish to thank businesses who are now also making a fair contribution to Estonia’s security – this way, the cost of defence investments no longer solely lies on the shoulders of working people.”
Minister of Education and Research Kristina Kallas stressed that the government’s absolute priority must be to stimulate the economy – a well-planned state budget will ensure a higher national rating and give businesses the confidence to invest in Estonia. “Attracting large investments to Estonia is important for the competitiveness of the Estonian economy, where every 200 million euros of investment will provide us with about 80 million euros in tax revenue per year.” Kallas added that the best economic policy is education policy. “Smart Estonians create added value in the economy, so the continued increase in higher education funding and the reform of vocational education – all of this will increase the competitiveness of the economy."
Next year’s state budget and the 2025–2028 state budget strategy are due to be approved at the government meeting on 25 September. Before approving the budget, the government will hear the opinion of the independent budget council. On 26 September, the prime minister will hand over the budget to the Riigikogu.
Gallery from the discussions: https://www.flickr.com/photos/stenbockimaja/albums/72177720320386116
