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The Riigikogu concluded the first reading of the State Budget for 2016 Bill. According to the Bill, the volume of the next year’s state budget is 8.9 billion euro, which is 4.2 percent or 358 million euro more than was planned in the state budget for 2015.

Under the State Budget for 2016 Bill (103 SE), initiated by the Government, the coming year’s budget is based on an economic growth of 2.6 percent. Compared with this year’s budget, state pension expenditure will increase by 88.9 million euro, health insurance expenditure by 51.8 million euro and defence spending by 37.1 million euro in the budget for 2016.

The state budget revenues are 8.84 billion euro, which is 260 million euro more in comparison to this year’s budget and means a growth of 3 per cent. The largest revenue sources are social tax with 2.5 billion and value added tax with 2 billion euro.

The state budget is nearly balanced, which is 0.1 percent of GDP. However, the structural position will remain in surplus, which is 0.6 percent of GDP.

Kadri Simson, Andres Herkel, Martin Helme, Aivar Sõerd, Kalvi Kõva and Siim Kiisler took the floor during the debate.

Kadri Simson noted that one of the concerns of the budget is confusion regarding the financing of the Ministry of Education and Research. She also noted that no funds have been provided for restoring the financing of local roads and that agriculture needs larger support than has been proposed in the draft budget to exit the crisis situation.

Andres Herkel pointed out the impact that the raising of excise duties, taxes and fees would have on the society. In his words, the economic forecast that has been taken as the basis for the budget is not reasoned. Herkel stressed that agriculture needs more decisive support from the Government and he was not satisfied that the state budget financing of political parties had not been reduced.

Martin Helme criticised the draft budget for scarce transparency. He found that there were a number of unfounded expenditures in the budget and there was no vision in the budget how to help the development of Estonian export. Helme also noted that agriculture should be supported more.

In his speech, Aivar Sõerd pointed out the evaluation of the International Monetary Fund (IMF) on Estonia, according to which Estonia has an economic environment that supports growth, impeccable financial condition of the public sector, large public investments and effective state services. Sõerd said that the clear priorities of the state budget for 2016 are the strengthening of the security of Estonia, and improvement of the subsistence of people and ensuring of the continuation of responsible public finances. The welfare of families with children will improve and the incomes of the people will grow.

Kalvi Kõva noted that the focus of the coming year’s budget was on Estonian people. He said that the budget is focused on children and families, and will improve the subsistence of many people and ensure that more vulnerable and weaker members of the society receive more support from the state. Kõva pointed out that the budget provides for a child benefit rise, a rise in subsistence benefit rate and a pension rise.

In Siim Kiisler’s words, conservative and prudent budgetary policy is one of the important preconditions for economic growth. He noted that the forecasted economic growth sets a clear framework for the state as to what a responsible budget is like. In his report, Kiisler recognised the plan to reduce the number of government sector employees and thereby achieve saving.

The deadline for submission of motions to amend the Bill is 4 November.

The Riigikogu passed two Acts:

The Act on the Ratification of the Protocol amending the Agreement between the Government of the Republic of Estonia and the Government of the People’s Republic of China for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (66 SE), initiated by the Government, ratifies the Protocol amending the Agreement between the Government of the Republic of Estonia and the Government of the People’s Republic of China for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income.

55 members of the Riigikogu voted in favour of the Act, nobody was against, and there was 1 abstention.

The Act on the Ratification of the Agreement on the Transfer and Mutualisation of Contributions to the Single Resolution Fund (68 SE), initiated by the Government, concerns the agreement opened for signature in Brussels on 21 May 2014 under which the European Union Member States commit to transfer to the EU Single Resolution Fund the contributions that they raise from banks. This Agreement will have to be ratified or approved, in accordance with their domestic law, by all the Member States whose currency is the euro and by the Member States whose currency is not the euro that participate in the Single Supervisory Mechanism and in the Single Resolution Mechanism.

50 members of the Riigikogu voted in favour of the Act, 3 were against, and there were no abstentions.

The Riigikogu concluded the second reading of one Bill:

The aims of the Bill on Amendments to the Securities Market Act (67 SE), initiated by the Government, are to reduce the administrative burden of issuers on the stock exchange and to increase the transparency of the securities market.

The Riigikogu concluded the first reading of three Bills:

The Bill on Amendments to the Work Ability Allowance Act and Amendments to Other Associated Acts (84 SE), initiated by the Government, will postpone the entry into force of the Work Ability Allowance Act by half a year. At present, the Act is due to come into force on 1 January 2016. Under the Bill, the Act will come into force on 1 July 2016. The reason for the postponement of the entry into force of the Act is the fact that, for the implementation of the reform, it will be necessary to amend Acts that have been adopted and to ensure additional time to realise the changes to be made (implementing legislation, IT developments).

Monika Haukanõmm and Dmitri Dmitrijev took the floor during the debate.

The deadline for submission of motions to amend the Bill is 4 November.

The Bill on Amendments to the Act on Amendments to the Social Tax Act, the Income Tax Act and Other Acts (99 SE), initiated by the Government, will postpone the rises in excise duty for fuel planned for 1 January 2016 by one month, that is, to 1 February 2016. The aim of the Bill is to increase the tax revenue of the state in 2016.

Andres Ammas took the floor during the debate.

The deadline for submission of motions to amend the Bill is 4 November.

The Bill on Amendments to the State Fees Act (97 SE), initiated by the Government, will amend state fee rates on the basis of the equivalence principle or cost principle upon performance of acts in the area of administration of the Ministry of the Environment, the Ministry of Culture, the Ministry of the Interior, the Ministry of Social Affairs and the Ministry of Economic Affairs and Communications, and in foreign missions. The amendment will have an impact on all undertakings and natural persons who pay state fees in the event of performance of relevant acts or the issue or amendment of permits. Upon the entry into force of the Bill, the state budget revenues will increase by at least 1 000 000 euro per year. The higher state fee rates have been taken into account already in the state budget for 2016.

Andres Ammas took the floor during the debate.

The Free Party Faction moved to reject the Bill. 21 members of the Riigikogu voted in favour of the motion, 26 were against, and there were no abstentions.

The deadline for submission of motions to amend the Bill is 4 November.

Verbatim record of the sitting (in Estonian): http://stenogrammid.riigikogu.ee/et/201510211400

Video recordings of the sittings of the Riigikogu can be viewed at https://www.youtube.com/riigikogu (NB! The recording will be uploaded with a delay.)

Riigikogu Press Service

Urmas Seaver

T: 631 6352; 50 39 907

urmas.seaver@riigikogu.ee

Queries: press@riigikogu.ee

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