The Reform Party Faction has a right centre world view, which means that it emphasises the central role of low taxation and wider individual and market freedoms and the freedom of enterprise in the development of a country.
Estonian Reform Party Faction of the 13th Riigikogu has 30 members; this makes it the largest faction in the Riigikogu.
As the Reform Party has long been responsible for the government, its parliamentary faction has also been the most powerful force in the Riigikogu and the most influential in the society for a long time. This has meant that right-wing liberal ideology has largely taken root at the legislative level through draft legislation and other initiatives.
The work of the faction follows the political programme of the Reform Party and has developed alongside it. Throughout the years, the work of the faction has focused on dispersing any excessive control by the State. Classical examples of this include the lowering of the income tax for individuals and the reduction of state fees by making these cost-based, as well as simplifying the whole fee system of judicial procedures. In social policy, the faction has mostly focused its attention on the efficient changing of the benefits system, with ‘needs-based’ being the key word.
The liberal world view of the Reform Party highlights the individual freedoms and the entrepreneurial spirit as the powers that take the country forward, while the state should intervene as little as possible in the lives of its residents. Examples of the policy of the Party include the lowering of the income tax for individuals from 26 % to 20 %, releasing businesses from income tax on reinvested profit, and establishing parental benefits to support families.
The amendment to the Income Tax Act which released businesses from paying income tax on reinvested profit was passed at the initiative of the Reform Party; the amendment entered into force on 1 January 2000. The main purpose of the amendment was to increase investments by businesses and to make conditions favourable for creating new profitable jobs.
The income tax of individuals has decreased year by year: to 24 % in 2005, 23 % in 2006, 22 % in 2007, and 21 % in 2008. As of 1 January 2015, individuals pay 20 % in income tax. The grand idea of the Reform Party – a larger disposable income – has had a positive effect on the entire Estonian labour force who now receives more on paydays.
The earlier focus of the Reform Party – mainly the economic and financial policies – has extended thanks to the constant development of the Party. Broad social regulations have been carried out, such as the parental benefit known as the ‘mother’s salary’. The Reform Party believes that better public services, larger pensions and support to the needy can only come with stronger economic growth. This is why the Party gives so much attention to maintaining a favourable economic environment and looking for new solutions.
The parental benefit was enforced on 1 January 2004, which means that the Reform Party fulfilled its election promise made before the 2003 parliamentary elections. The parental benefit allows a mother or a father to stay at home after the birth of a child without losing part of their income. Since it is generally the mother who stays at home, the benefit is often called the ‘mother’s salary’. Studies confirm that the parental benefit, which has now been extended to eighteen months, has increased the birth rate by several thousands over the last ten years.
The Reform Party believes that only a good economic and financial environment can ensure a secure future for the state and improve the living conditions of the people, based on the principle that living beyond one’s means will ultimately prove more costly. The finances were kept in order and the budget balanced even during the economic crisis, and Estonia succeeded in adopting the European single currency on 1 January 2011.
In order to better support disadvantaged families, the Reform Party presented a needs-based family benefits reform in 2012, which provided larger benefits for people who needed it the most.
Under the joint leadership of the Reform Party and its coalition partners, many major reforms have been carried out over the last period in government. One such reform was in the public service, where the activities of the government and public sector in general were modernised. Underway at the moment is the work capacity reform which aims to bring the people with special needs to the labour market and to propose optimal solutions in this field.
Estonian Reform Party is a member of the Liberal International, founded in England in 1947.
Political priorities in the near future
The most important future objectives for the Reform Party include the national security and the continuing growth of incomes and reduction of labour taxes, in order to improve the competitiveness of the economy. We could also mention the needs-based support for families, the continued rise in pensions and the protection of the Estonian language and culture.
The Estonian Reform Party was founded on 13 November 1994, when the founding group led by Siim Kallas and the Estonian Liberal Democrat Party (ELDP), founded in 1990, decided to merge under this name.
The founding group led by Siim Kallas brought along entrepreneurs and celebrities – Igor Gräzin, Rein Lang and others. It also attracted several yet unaffiliated politicians, such as Valve Kirsipuu, Uno Mereste, Ignar Fjuk and Toomas Savi.
Since the parliamentary elections of 1995, the Reform Party has been represented in every Riigikogu. At the 1995 elections, the Party received 87,531 votes, or 16.19%, which gave it 19 seats. At the 2011 elections, it won 33 seats, which is the best result of all times.
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