The Riigikogu concluded the first reading of the Bill on the State’s Supplementary Budget for 2020 (171 SE), initiated by the Government, and set the deadline for submission of motions to amend as 9 a.m. on 8 April.
According to the supplementary budget, the government sector’s nominal budget deficit will amount to 2.62 billion euro together with the Government’s economic support measures. The measures will have an impact of 1.15 billion euro on the Government’s nominal budget position. The supplementary budget will reduce state budget revenues by 1.63 billion compared with this year’s budget. The supplementary budget’s measures will have an impact of 513 million in total on the current state budget’s expenditure. This will be supplemented by application of reserves.
The state budget has a nominal deficit of 10.1 per cent of GDP and the structural deficit amounts to 5.2 per cent of GDP. The forthcoming economic recession will bring about a large-scale reduction in tax revenues which will affect all government sector levels. The state budget revenue will fall from 11.8 billion euro to 10.2 billion euro.
The Minister of Finance Martin Helme explained that the aim of the supplementary budget was to cover the unforeseen costs due to the coronavirus pandemic and to boost enterprise and the labour market in the economic and health crisis. It is necessary to be guided by the principle that funds must be injected into economy in difficult times.
The Ministry of Finance refreshed its spring economic forecast on Tuesday, 31 March, to take into account the latest knowledge about the ongoing economic situation and about the duration of the public health protection measures. This economic forecast does not contain the impact of the crisis aid package which will be assessed separately later. An important assumption of the forecast is that the emergency situation measures that are currently inhibiting economic activity will remain in place until the end of May. This will be followed by a gradual restoration of normal economic activity to about 90 per cent of the ordinary by the end of this year. According to the forecast, Estonia’s gross domestic product may fall by 8 per cent this year. This is significantly more than projected by the forecast completed on 18 March – it projected a 3-per cent economic decline back then.
In the drafting of the supplementary budget, the changed economic environment has been considered. It also takes into account the changes in the receipt of tax revenues in view of the new spring economic forecast (the expenses directly related to tax revenue under special Acts have also been adjusted accordingly) and the measure package. The non-tax revenue projections and the budgets of calculated expenditure have also been re-assessed and they have been specified with the supplementary budget. The supplementary budget describes the procedure for the implementation of various measures of the aid package, and the funds to be allocated.
During the debate on the Bill on supplementary budget (171 SE), Kaja Kallas (Reform Party) and Riina Sikkut (Social Democratic Party) took the floor. Kallas said that everyone understood that crisis was an emergency situation that required special measures. Therefore, above all, measures that are necessary must be taken. At the same time, we must leave a safety margin in the budget. Transparency is required when public funds are distributed. We are ready for cooperation if the coalition does not use steam-roller tactics, Kallas said. Sikkut emphasised that it was necessary to create a common understanding of the means to overcome the crisis. If we do not have a strategic plan for that, we will only increase our debt burden. At present it is necessary to keep the focus on the resolution of the crisis, Sikkut said.
One Bill passed the second reading
The major amendments proposed in the Bill on Amendments to the Social Welfare Act, the Social Benefits for Disabled Persons Act and the Labour Market Services and Benefits Act (146 SE), initiated by the Government, concern the social rehabilitation service, the alternative care service and foster parent allowances, the payment of allowances to children with orphan diseases, the identification of disabilities and the degree of severity of disabilities, and mitigation of the coping difficulties arising from the emergency situation.
The Bill will create flexibility that will enable to increase the number of children reared in a foster family and in a family of a family home or substitute home, in the interests of children. This is possible in the case when children of one family need to be placed or there is another situation where an opportunity for children to be reared together needs to be ensured. Flexibility in terms of the number of children may also be important in the current emergency situation. The Bill will also amend the minimum amount in which local governments are required to support foster families upon caring for one child. The minimum allowance or fee for foster parents will be doubled compared to the current rates.
The Bill will create the possibility for the Social Insurance Board to begin to pay a social benefit for a child with a disability for children with orphan diseases, to compensate for additional costs related to the disease, also in the case when they do not have a developed disability. The aim is to provide for a state allowance for children with orphan diseases who do not have the characteristics of a developed disability but who need financial support in order to prevent a disability.
With the amendments to the Social Benefits for Disabled Persons Act, medical experts of the Social Insurance Board will be given the possibility to identify a person’s disability and the degree of severity of the disability in persons of working age on the basis of their health data. At present, applicants need to describe the restrictions they are experiencing by spheres of activities in order for the degree of severity of their disability to be identified. In addition, according to the Bill, in the case of a child with a severe or profound disability whose condition is constant and unchanging or progressive, the duration of the degree of severity of the disability can be identified for until he or she attains working age. At present, the degree of severity of disability is determined for one to three years.
The amendment to the Labour Market Services and Benefits Act will enable the Estonian Unemployment Insurance Fund to use counselling of the unemployed by telephone or through the information system of the Estonian Unemployment Insurance Fund, instead of inviting them to face-to-face counselling, in justified cases. In addition, the Bill will provide for the implementation of financial measures in extraordinary situations to mitigate the coping difficulties arising from the emergency situation in the case of specifically vulnerable target groups.
Helmen Kütt (Social Democratic Party) took the floor during the debate.
Three drafts passed the first reading
The Bill on Amendments to the Assistant Police Officer Act and Other Acts (measures related to the spread of the SARS-CoV-2 virus that causes the COVID-19 disease) (170 SE), initiated by the Government.
The Bill has been drafted in view of the emergency situation that has been declared, and the problems that have arisen in the resolution of the emergency situation, in particular the fact that, under the current law, it is impossible to impose the specifications applicable during emergency situations. During an emergency situation, it may be complicated to ensure the continuation of all ordinary proceedings and the provision of services as authorities are preoccupied with the performance of the tasks related to the resolution of the emergency situation. In order that it would be possible to make specifications as necessary, amendments are provided for in the Acts so that it would be possible for example to prolong or suspend the progress of proceedings as necessary during an emergency situation.
The Bill will amend 33 Acts, and essentially three types of amendments will be made: first, exceptions in terms of the validity of various licences, and the duration of and deadlines for various types of proceedings, provided for for the time of emergency situation. Second, exceptions to extend the competence and tasks of various authorities and persons, provided for for the time of emergency situation; and third, amendments necessary for an emergency situation but at the same time essentially of a permanent character.
Amendments to several Acts will provide for temporary exceptions for the time of emergency situation for the extension of health and training certificates in place in various professions and for the validity of existing activity licences. The qualification requirements will be temporarily alleviated in some specialities, and certain procedural requirements and deadlines will be simplified. They are mitigations provided for the time of emergency situation which will allow for the provision of certain services, the operation of proceedings and the performance of work to continue uninterrupted during an emergency situation.
The Bill also proposes practical amendments to facilitate the resolution of emergency situations. For the purposes of ensuring order, and for better involvement of assistant police officers and members of the Estonian Defence League, their competences in the performance of law enforcement tasks together with police officers have been harmonised. At the same time, the use of law enforcement measures by assistant police officers and members of the Estonian Defence League at the time of emergency situation has been extended. Some state authorities have been granted additional competences and discretionary power for the time of emergency situation. The permitted net debt burden for local governments and the procedure of the final examinations in basic schools and upper secondary schools have been amended. The rules for data processing and for the information of the public have been specified.
The Bill also includes legislative proposals motivated by emergency situation which however are of a permanent character and will also remain in place in ordinary circumstances. They are in particular the amendments that will allow for procedural acts to be performed from a distance in the administration of justice. There is a proposal to make permanent amendments to the legislation concerning aliens.
During the debate, Kaja Kallas (Reform Party) and Jevgeni Ossinovski (Social Democratic Party) took the floor. Kallas said that it was perfectly understandable that restrictions needed to be introduced in a crisis situation. Even when hurrying, we must avoid stupidities and fake solutions. She referred to the fact that, through temporary restrictions, the Government was trying to realise its egoistic dreams that were not connected with the crisis. “I was very much hoping that the Government would not misuse this crisis, but the Bill now under discussion shows something else. In this crisis, too, we must not forget at any moment that Estonia is a parliamentary country. The provision of additional permanent decision making powers for the Government under the cover of emergency situation runs into conflict with this,” Kallas said. In Ossinovski’s opinion, a poor Bill had been submitted which was a pity because it was an important Bill. Many things need to be decided quickly. “The need for the implementation of some of its sections for the management of the crisis is either questionable or irrelevant, Ossinovski said. In his words, the amendments proposed by the Bill needed to be sifted thoroughly and those not connected with the emergency situation had to be omitted. He confirmed a willingness to cooperate to introduce the necessary amendments to the Act.
The Riigikogu set the deadline for submission of motions to amend the Bill as 10 a.m. on 8 April.
With the Draft Resolution of the Riigikogu “Implementation of the Funds of the Stabilisation Reserve Fund” (168 OE), submitted by the Government, the Government proposes to the Riigikogu to implement the funds of the Stabilisation Reserve Fund to the full extent.
Under § 71 of the State Budget Act, the Stabilisation Reserve Fund is formed in order to finance expenditure and investment and financing transactions that have the following objectives: the reduction of economic risks; the prevention or mitigation of socio-economic crises; the resolution or prevention of an emergency situation, a state of emergency, a state of war or other extraordinary situation or a crisis with material effect, or performance of the obligations provided for in a collective self-defence agreement; the resolution and prevention of a financial crisis that may cause difficulties related to liquidity or solvency for the financial institutions or significant disruptions in the payment and settlement systems.
In connection with the emergency situation that has been declared due to the spread of COVID-19, a need to use the funds for all the abovementioned purposes may arise. As a result of the decision, it will be possible to engage the funds of the Stabilisation Reserve Fund gradually and as necessary over 2020 and 2021.
Maris Lauri (Reform Party) took the floor during the debate. She said that the draft Resolution could be improved for clarity and understandability. “Should the Stabilisation Reserve Fund be exhausted at once, though, and should we grant permission to use all of it right away? This question arises because, after all, we do not actually know what will happen in a month’s time or six months’ time. By then, this autumn, we may find ourselves in a situation where we will need this money much more than we do today. And then the question will arise: why did we grant the Government the use of that money back then,” Lauri explained.
The Riigikogu set the deadline for submission of motions to amend the draft Resolution as 5.15 p.m. on 7 April.
The Bill on Amendments to the Acts relating to the Act on the State’s Supplementary Budget for 2020 (measures related to the spread of the coronavirus that causes the COVID-19 disease) (169 SE), initiated by the Government, consolidates amendments to the special Acts that have an impact on the supplementary budget, that contain bases or rates for financial calculations and that need to be amended for adoption of the supplementary budget and implementation of the measures. The State Budget Act will also be amended by adding the provisions concerning the preparation of the budget strategy and the Bill on the state budget under the circumstances of an emergency situation.
The Bill will amend the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act, the Support of Enterprise and State Loan Guarantees Act, the Estonian Defence League Act, the Environmental Charges Act, the Funded Pensions Act, the Value-Added Tax Act, the Creative Persons and Artistic Associations Act, the Taxation Act, the Social Benefits for Disabled Persons Act, the Health Insurance Act, the State Budget Act, the State Pension Insurance Act, the Social Welfare Act, the Social Tax Act, the Health Services Organisation Act, the Income Tax Act, the Unemployment Insurance Act and the Work Ability Allowance Act.
During the debate, Maris Lauri (Reform Party) and Aivar Kokk (Isamaa) took the floor. Lauri pointed out the necessary amendments related to the Bill. At the same time, she did not see the expediency of the amendments relating to excise duties and the second funded pension pillar. Kokk analysed the impact of the crisis situation on representatives of various professions.
The Riigikogu set the deadline for submission of motions to amend as 9 a.m. on 8 April.
During the open microphone, Jaak Juske took the floor.
The sitting ended at 10.36 p.m.
Video recordings of the sittings of the Riigikogu can be viewed at https://www.youtube.com/riigikogu
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