In her political statement made upon tabling the draft budget for 2022, the head of government said that Estonia’s economy was strong and had regained the level it was at prior to the coronavirus crisis. She added that the employment rate was also rising once again. “The strength of our economy is the cornerstone of our state budget,” she remarked.
Prime Minister Kallas says that thanks to the strong economy and some bold decision-making, the government was able to put together a responsible budget for 2022 that focuses on securing the well-being of Estonia’s population while enabling the economy to grow and paving the way for further development. “This is a budget for all of Estonia, where the priorities are happy, healthy, well-educated people and a strong and well-defended country,” she announced.
According to the prime minister, there are three main focal areas in the budget. The first is getting the state’s everyday expenditure under control. “The hole that had been bored into the state’s coffers in the last few years was bigger and deeper than it should have been,” she said. “We have set about fixing it. Among other things, that means bringing different activities together at the state level and implementing national reforms so as to make the public sector more efficient.” She added that the government was hoping to bring the budget deficit down to below 3% as early as next year.
The second focal point is the people of Estonia who have been hit hardest by the health crisis: the budget foresees a pay rise for teachers, health care workers, police officers, rescue workers and those employed in the field of culture.
“The pandemic has claimed invisible victims as well, and it is important to us that those who need support get it,” Prime Minister Kallas said. “We will be supporting people’s mental health and funding activities that help to fill the gaps in our children’s learning. We will also be establishing a family reconciliation system so that there are fewer children from broken homes. And despite the fact that the local government revenue base will exceed 100 million euros, we will be providing local governments with 10 million euros in support of recreational education for children.”
The head of government also highlighted support for introducing basic school students to culture and for providing organic food in schools. The economic policy decisions taken this year will also lead to more than 13% growth in the average pension in the new year.
The third priority area in the budget is Estonia’s rapid and sustainable development. Prime Minister Kallas says that defence spending will reach an all-time high in 2022, comprising 2.3% of GDP. “This is a clear message to both our allies and our opponents – that Estonia takes its security very seriously and contributes to it accordingly,” she said.
The head of government also mentioned investments that will be made for the development of the digital state and to ensure cyber-security; support for Estonian-language education; and research and development expenditure amounting to 1% of GDP.
Prime Minister Kallas went on to state that in order to boost people’s sense of security and avoid further accelerating price rises, the decision had been taken to abandon all planned excise hikes. She also remarked that plans were in place to add measures to the budget compensating for high electricity prices. “If the cost of electricity remains unreasonably high for any significant length of time, we will help to mitigate the impact it has on people and businesses in the country,” she said. “People should not have to fret or feel like they are being kept in the dark about wildly fluctuating prices on the energy market.”
The full text of the address given by Prime Minister Kallas can be found online (in Estonian) at https://valitsus.ee/uudised/peaminister-kaja-kallase-poliitiline-avaldus-riigieelarve-algatamisel-riigikogus-30092021