Estonian parlt finance committee discusses state budget with ministers

TALLINN - In order to review all revenues and expenses of the state budget by area, the finance committee of the Estonian parliament launched a discussion of next year's state budget bill with ministers at an extraordinary sitting on Tuesday.

Committee chair Annely Akkermann said that the state budget brings together financial information from various areas, activities, services, institutions and many other aspects into one system. She added that this cannot be a very easy reading that is tangible down to the details the first time.

"The fields are different, from social benefits to national defense and culture, the goals of the programs are different, and the processes leading to results need different designs," she said.

"In the course of the discussion, we would like to receive information from the ministers about the goals and costs of the programs planned in the budget, what the desired result is and how it will be measured," Akkermann said. "Expenditures in the state budget are presented both according to economic content and in an activity-based manner."

She noted that the draft state budget foresees a cut of 132.1 million.

"We will also start looking for additional savings at committee sittings together with the ministers of the fields when we review the expenditure lines of the budget," Akkermann said, adding that a significant part of the expenditure side of the state budget has been left out of the cost-cutting task. "When reviewing the budget, it is also necessary to clarify the impact of the cuts on the activities of the sector."

According to Akkermann, together with next year's state budget bill, the finance committee will discuss the base State Budget Act, tax changes related to the security tax, as well as drafts related to excise duty increases, which are directly related to increasing the revenue base of the budget.

Deputy chairman of the committee, Andrei Korobeinik, said that the state budget must reflect the exact distribution of costs and revenues, and not be limited only to the allocation of sums of money between ministries.

"It is important that it is clearly stated what and how the money is used, this is also required by the Estonian Constitution," Korobeinik said.

In his opinion, the exact distribution of costs is not clear enough even in the explanatory memorandum of the draft, which creates a constitutional contradiction.

"If the level of detail is so low, members of the Riigikogu cannot meaningfully contribute to the preparation of the budget, and the preparation of the budget is left only to the executive power," Korobeinik said.

Total state budget revenue in 2025 will be 17.7 billion euros, marking an increase of 900 million euros or 5.2 percent over 2024. Expenditure will total 18.2 billion euros, an increase of 600 million euros or 3.5 percent compared with the budget for 2024, the state budget documents show.

The tax burden in 2025 will be 35.8 percent of GDP, which is 0.7 percent higher than in 2024.

The nominal budget deficit will be kept at 3 percent of gross domestic product (GDP) in 2025, at the same level as forecast in the supplementary budget for 2024. This is compliant with the Maastricht budget balance rule. Due to significant increases in security and social protection expenditures, among others, debt will increase by around 930 million euros to 24.3 percent of GDP. 

The discussion of the 2025 state budget bill was attended on Tuesday by Finance Minister Jürgen Ligi, Minister of Justice and Digital Affairs Liisa Pakosta, Interior Minister Lauri Läänemets, Foreign Minister Margus Tsahkna and Infrastructure Minister Vladimir Svet.

The finance committee will continue the discussion of the 2025 state budget bill initiated by the government at subsequent regular sittings.