The government reached an agreement on a four-year state budget strategy with Minister of Finance Keit Pentus-Rosimannus (Reform) saying there were cuts to be made on fixed costs.
The new budget strategy will work towards balancing the budget and cuts will be made in every area of government. Each sector will propose where savings can be made and the budget strategy will be approved on April 29.
Among many things, the strategy also plans to increase salaries for teachers, cultural workers and emergency workers by at least 3%. Pentus-Rosimannus noted that the pay bump was possible if all government sectors agreed to save money. She added that it was too early to think of the pay increase to continue over the coming years.
“We can look at the upcoming years on the arrival of new economic forecasts. As a message, I think this is good and necessary – that the most prioritized groups, which have also made an effort during the crisis, can have their salaries increased without increasing our budgetary deficit,” the minister said.
Pentus-Rosimannus added that the details were still being discussed, which is why no exact sums could be published, but some EUR 25 million would be allocated for pay increases next year.
The finance minister said one of the main goals was to exit the budgetary deficit. Each ministry must decide where they could cut costs for that to happen, however.
“Right now, we can say that each member of the government cabinet was prepared to find cuts in next years’ budgets. Since there is still half a week before the budget strategy is approved, it means this time will see very detailed work on possible cuts in all government sectors,” Pentus-Rosimannus noted.
“True, cutting costs is one of the most important tasks the government cabinet faces going forward,” she added.
Operating costs, such as management and staff costs, are likely to be the first to be looked at, including training and posting expenses.
“The desire to manage costs motivates further reforms and questions about if what is done, how many people do it and what is done with taxpayer money, if all that is justified and necessary,” the minister noted.
Institutions presented EUR 398 million of additional applications in information and communications technology to the state budget strategy. The Ministry of Finance and the Ministry of Economic Affairs and Communications presented EUR 299 million of the applications.
Pentus-Rosimannus said fixed costs in government fields could only increase if cuts were made elsewhere. Future investments can however be made using EU funding. A digital revolution is one of the largest sectors that EU funding allows.
“We must first see how it is the most reasonable to use European money for the future and it is certainly possible, at least partly,” the minister said. “There are no plans in the near future to continue to add money for daily state maintenance, we need to cut corners and not pick out sectors separately, we must see the big picture. It is possible but requires resources to be used more effectively in other areas.”
Pentus-Rosimannus noted that it was important to be careful when supporting the economy in order to avoid overheating, since the investment level in the 2023-2025 period exceeded EUR 2 billion yearly.
“This means we must seriously discuss this. The worst thing that could happen is we contribute to the economy overheating in a few years and prices would then increase,” the finance minister added. (ERR/Business World Magazine)