At the beginning of today’s sitting, Prime Minister Jüri Ratas made a political statement in connection with the submission of the State Budget for 2018 Bill.

“We will make our contribution to improving the living environment of the people, to increasing social justice, to ensuring long-term and sustainable growth of the economy, and to ensuring security,” the Prime Minister said when presenting the State Budget Bill.

“The Government’s budget policy is strong and responsible. Government sector debt burden will decline and tax burden will not increase. The government sector budget position is nearly balanced, according to current forecast. Next year, state revenue and expenditure will exceed the benchmark of ten billion euro for the first time. The state budget will direct a total of 3.1 billion euro into the social sphere, 1.4 billion into health care and a billion into education. We will contribute 26 million euro more than last year, that is, 528 million euro, into defence sphere and this is the largest volume of defence budget in the history of Estonia,” Ratas said.

During the debate, Andres Ammas from the Free Party Faction, Jürgen Ligi from the Reform Party Faction, Kalvi Kõva from the Social Democratic Party Faction, Helir-Valdor Seeder from the Pro Patria and Res Publica Union Faction and Mihhail Stalnuhhin from the Centre Party Faction took the floor.

“The main question is, and remains, of budgetary balance,” Andres Ammas said. He said that squandering at the expense of future generations was a very big mistake.

In Jürgen Ligi’s opinion, in the policy of the current Government, money is constantly used inaccurately, excessively and in a manner that Estonia cannot afford.

Kalvi Kõva said that next year’s budget was a future-oriented budget that would implement family policy, increase the welfare of families with children and definitely bring about a rise also in birth rate.

Helir-Valdor Seeder said that, in the course of the drafting of the budget, the right course had been pursued, and as a party to the coalition they were optimistic that, in the future, a balanced budget would be achieved in a situation of growing economy.

In Mihhail Stalnuhhin’s opinion, that was a budget of dreams, and he hoped that the budget would really function and would benefit the whole Estonian people.

Today, the Minister of Culture Indrek Saar presented in the Riigikogu the report on the implementation of “The Fundamentals of the Sports Policy until 2030” in 2016.

In his speech, Saar touched upon the role of coaches. He announced that the Ministry of Culture was increasing the salary fund of the remuneration support to youth coaches with the fifth and higher professional level by 35 per cent, that is, to six million euro per year. That would raise the current 637-euro minimum salary of coaches to 850 euro per month in 2018. He pointed out that the aim of the salary support to coaches was, on the one hand, to ensure a dignified income for coaches and to value the coach’s profession, but also to improve the sporting opportunities for children and young people everywhere across Estonia.

The Minister pointed out that the hobby activities supporting system had been implemented and this year 6 million euro had been provided for that, and 15 million euro in every following year. “In addition, the new Government coalition agreed upon a reform of the basic swimming instruction, and ensured also the necessary funds for that. According to the new basic swimming instruction programme, the volume of swimming classes will rise from the current 24 classes to 40 classes,” Saar said.

Saar noted that compared to last year the proportion of people who exercise had risen. He also pointed out that an Act had been adopted that enabled employers to support each one of their employees who engaged in sports with 400 per year without having to pay taxes on it. The Minister also spoke of the sports funding reform. He pointed out the main changes that had been implemented in the present accounting period. In his speech, Saar also touched upon the most important sports investment which is the development of Kääriku Sports Centre.

During the debate, Jüri Jaanson from the Reform Party Faction, Dmitri Dmitrijev from the Centre Party Faction, Toomas Jürgenstein from the Social Democratic Party Faction, Helir-Valdor Seeder from the Pro Patria and Res Publica Union Faction and Krista Aru from the Free Party Faction took the floor.

The Riigikogu passed an Act:

The Act on the Ratification of the Comprehensive Economic and Trade Agreement (CETA) between Canada, of the One Part, and the European Union and Its Member States, of the Other Part (466 SE), initiated by the Government, ratifies the economic and trade agreement between the European Union and Canada (CETA) which Estonia ratified on 28 October 2016.

Under the economic and trade agreement between the European Union and Canada, European companies have the possibility to operate under the same competition conditions as Canadian firms.

CETA eliminates 99 per cent of the customs duties between the European Union and Canada. There will be total liberalisation regarding manufactured articles and fish products, as well as wine and alcohol. Tariffs on export articles important to the European Union, such as confectionery, baked products, vegetables and fruits, will also be eliminated. However, the tariffs on certain agricultural products, like chicken meat and eggs, remain the same.

In addition to the lowering of tariffs, for example, simplifications in the rules of origin, the simplification of the mutual recognition of technical regulations, and the streamlining of the processes of sanitary and phytosanitary rules should also contribute to the stimulation of trade.

In addition, new opportunities will open in the Canadian service market to European undertakings through CETA. Liberalisation will concern the energy, financial services, telecommunications and maritime transport services sectors.

This Agreement also contains the European Union’s new more transparent and institutionalised approach to the protection of investments as well as to disputes relating to them, but the part of the Agreement concerning the issues of protection of investments will not be applied as yet.

Canada has finished all ratification processes relating to CETA. Of the European Union Member States, Latvia, Denmark, Spain, Malta, Croatia, Czechia and Portugal, as well as the European Parliament have ratified the Agreement. CETA was implemented as of 21 September.

During the debate, Oudekki Loone from the Centre Party Faction and Jürgen Ligi from the Reform Party Faction took the floor.

66 members of the Riigikogu voted in favour of the Act and one was against.

A Bill passed the second reading in the Riigikogu:

The Bill on Amendments to the Social Welfare Act and Amendments to Other Associated Acts (360 SE), initiated by the Government, will repeal the Juvenile Sanctions Act. The social rehabilitation service will be made available for children with a substantial and diverse need for help. Under the Bill, local governments will have the right to apply for a court to refer a child to a closed child care institution if it is impossible to help him or her in any other way and his or her behaviour is dangerous. If a violation of law is due to the child’s need for help, in the future, he or she will get help from the child protection system. The Bill will eliminate juvenile committees. Psychologist, physiotherapist, speech therapist, doctor, nurse, occupational therapist, creative therapist and special education teacher can offer the social rehabilitation service to a child.

Seven Bills passed the first reading in the Riigikogu:

The Bill on Amendments to the Social Welfare Act and Amendments to Other Associated Acts (489 SE), initiated by the Government, regulates the transfer of the obligations that so far have been the tasks of county governments to local governments or the Social Insurance Board.

The aim of the regulation of the substitute and follow-up care service will be equal treatment of the children who are in substitute care which would not be dependent on the form of the substitute care, the age of the child or young person, the location of the service provider or other circumstances that must not be a basis for the emergence of any discriminating situation. The substitute and follow-up care service will be provided to a vulnerable target group who has been deprived of the care and support of his or her family of origin for a long or short time and whose interests are represented by a guardian appointed by a court or arising from law, and in most cases it is the rural municipality or city government. To ensure equal treatment, the Bill will eliminate the different types of services organised by the state under the current Social Welfare Act (substitute home service and foster care), which are provided for different durations and in the case of which the share of the personal expenses of the child is covered monthly in different amounts without a substantial justification based on the needs of the child. Two services, substitute care service and follow-up care service, will be included in the Chapter concerning the assistance organised by local governments. The services will be differentiated on the basis of both the content and the target group of the service.

With the Bill on the Approval of the Amendments to the Convention concerning International Carriage by Rail and to its Appendices (474 SE), initiated by the Government, the amendments of 2015 to the Convention concerning International Carriage by Rail (COTIF) and to its Appendices will be approved. The Convention regulates international rail traffic; uniform rules concerning the use of wagons and infrastructure as well as the carriage of goods and passengers have been established. The amendments are of specifying nature, contributing to a more flexible functioning of the Convention. For example, the budgetary period of the organisation is reduced from the current 6 years to 3 years. In connection with that, the calculation period of the contribution is also reduced which allows for better planning of the receipts and more accurate budgeting. In recent years the amount of Estonia’s contribution has remained between 5648-8940 Swiss francs per year.

The amendments proposed under the Bill on Amendments to the Weapons Act and Amendments to Other Associated Acts (494 SE), initiated by the Government, concern in particular the processing of various permits and the regulation concerning weapons incapable of firing. Requirements will be included in the Weapons Act that will ensure that law-abiding and trustworthy people are owners of weapons.

In the future, applicants for a weapons permit will have to justify the need to own a weapon and the Police and Border Guard Board will have the right to refuse to issue a permit if the need for a weapon is not sufficiently justified. It will be possible to refuse to issue a weapons permit to persons who have been repeatedly punished for committing an offence. The issue of a weapons permit may be refused and it may be revoked if there is suspicion that the owner of the weapon is a threat to national security. If a firearm is acquired for ensuring safety, the owners of the weapons will have to pass a practical test on handling firearms again when their weapons permits expire. In the future, firearms incapable of firing will also have to be registered with the Police and Border Guard Board.

Aliens residing in Estonia on the basis of a residence permit or by right of residence can apply for weapons permit on the same conditions as Estonian citizens. An alien will have to take an examination also when a weapons permit has been issued to him or her in another country. An examination on the person’s knowledge regarding weapons will be taken in Estonian or, if the person is not proficient in Estonian, in another language with the help of an interpreter. However, the test on handling firearms and the shooting skills test will have to be taken without the help of an interpreter. This will ensure that every owner of a weapon understands commands relating to handling a weapon given in Estonian which will ensure his or her and other people’s safety.

During the debate, Valdo Randpere from the Reform Party Faction, Märt Sults from the Centre Party Faction, Tarmo Kruusimäe from the Pro Patria and Res Publica Union Faction, Henn Põlluaas from the Estonian Conservative People’s Party Faction, Krista Aru from the Free Party Faction and Kalvi Kõva from the Social Democratic Party Faction took the floor.

The Estonian Conservative People’s Party Faction moved to reject the Bill at the first reading. 15 members of the Riigikogu voted in favour of the motion and 39 were against. The motion was not supported. The first reading was concluded.

The Bill on Amendments to the Code of Administrative Court Procedure, the State Fees Act and the State Legal Aid Act, with a view to enhancing administrative court procedure (496 SE), initiated by the Government, will improve the availability of procedural assistance, reduce the overburdening of courts and create the possibilities to implement simplified proceedings. The Bill is also intended to eliminate the deficiencies that have emerged in the regulation of the proceedings in judicial practice.

The Bill will improve the availability of procedural assistance to persons who belong to social risk groups. Under the new regulation, a court will be able to more flexibly assess whether an applicant for procedural assistance needs the assistance. A court can exempt a person partially or fully from bearing legal costs which include the legal aid costs on the state fee, the security payable in relation to certain proceedings, the translation of procedural documents, as well as an advocate appointed. Procedural assistance is granted if the legal costs exceed two times the monthly income of the person from which essential costs for example for the performance of a maintenance obligation and reasonable cost of accommodation and transport have been deducted. In the future, a court will be able to deduct from the income also other inevitable costs to the extent of up to 75 per cent of the current minimum monthly wage rate.

To reduce the overburdening of courts, the right of action and the right of appeal will be delimited. The delimitation of the right of action and the right of appeal will concern actions that in most cases are motivated by bad faith of the applicant. Such actions are often brought by prisoners, but, for example, constantly bringing similar actions in court by “serial applicants”, who generally are also prisoners, will also be deemed to be abuse of the right of action. In order to avoid ungrounded restriction of the right of action, discretionary power will be retained for administrative courts and circuit courts. As a result of the amendments, significantly less effort and time will be needed in proceedings where a benefit which the applicant stands to gain would be disproportionately small compared to the expenses of the administration of justice.

The Bill will extend the possibilities to use simplified proceedings. Simplified proceedings are a type of proceedings that require less resources compared to ordinary proceedings as the court may hear a matter pursuant to the simplified procedure, for example, hear a party to the proceedings via the telephone, derogate from the formal requirements for documents or forgo convening a court session. As a major amendment, the threshold for the application of simplified proceedings will be raised from 200 euro to 1000 euro. In the case of a legal value that has a money value which remains below the threshold, it is possible to apply simplified proceedings. The aim of the amendments planned is to extend the use of simplified proceedings in administrative court proceedings.

The Bill on Amendments to the Administrative Procedure Act and Other Acts (497 SE), initiated by the Government, will update the regulation of electronic operations in administrative proceedings which may be specified or restricted by special Acts.

The most important amendment is that sending documents electronically will be made equal to delivery by post. It is possible to deliver documents electronically via the Estonian information gateway (@eesti.ee), special information systems (e.g. e-Tax Board) or the e-mail address of the party to the proceedings. At the same time, the Act is planned to resolve the key issue as to when a document is considered to be delivered electronically. As a rule, it is the moment when the information system has registered the acceptance thereof or the addressee has confirmed receipt. The general rules for electronic issue of legal acts will be provided for. Among other things, the part concerning the use of digital signature and digital seal will also be updated.

Under the Bill on Amendments to the Social Tax Act and the Income Tax Act (499 SE), initiated by the Government, sole proprietors will have a tax environment similar to that of companies, which will make it more favourable compared to the current environment and extend on sole proprietors the tax incentives and social guarantees established for employees. As sole proprietor is a person engaged in small enterprise, as a general rule, who offers goods or services in his or her own name and receives remuneration for that. At the moment there are more than 31,000 sole proprietors in Estonia.

Sole proprietors have to pay social tax on business income earned, and both a minimum and a maximum limit have been established for the payment thereof. According to the Bill, the maximum limit for social tax for sole proprietors will be reduced so that it will be not fifteen, but ten times the sum of the minimum monthly wages for the taxable period annually. This year, the maximum limit is 27.918 euro; with the amendment, this amount will decrease to 18.612 euro. Thus the maximum limit will decrease by 33 per cent. A sole proprietor will be given the possibility to reduce his or her minimum social tax obligation by the days when he or she was temporarily incapacitated for work in the event of sickness. In addition, a sole proprietor will be entitled to calculate for himself or herself a rated sickness benefit for the second until the eighth day of sick leave and to deduct it from the business income subject to social tax.

Sole proprietors who engage in studies as their main duty will be released from the minimum social tax obligation and the payment of advance payments of social tax. As a result of an amendment, they will no longer have the obligation to meet the minimum social tax obligation, and when earning business income they will have to pay social tax only on income actually earned. A sole proprietor will have the possibility to deduct from business income the expenses made for improving his or her health to the extent of up to 100 euro in a quarter. Similarly to companies, sole proprietors will be allowed to deduct from income up to 10-euro expenses on advertising gifts, and their catering costs incurred upon engagement in business to the extent of the daily allowances during assignments abroad (50 euro for the first 15 days of an assignment abroad and 32 euro for each following day). Expenses incurred in entertaining guests and business partners can also be deducted to the extent of 32 euro per month.

During the debate, Sven Sester from the Pro Patria and Res Publica Union Faction and Mihhail Stalnuhhin from the Centre Party Faction took the floor.

The Bill on Amendments to the Payment Institutions and E-money Institutions Act and Amendments to Other Associated Acts (498 SE), initiated by the Government, will transpose the EU’s relevant payment services directive that regulates novel payment services, manages the security risks relating to payments an increases consumer protection. The Bill will regulate two new payment services: account information and payment initiation services. An undertaking providing these services will have to apply for an authorisation from the Financial Supervision Authority and in the future it will be under the supervision of the Financial Supervision Authority like all other payment institutions. With the account information service, a client can conveniently obtain aggregate information about his or her financial situation from different banks. The payment initiation service allows payment in Internet shops also without a credit card or the bank link service of a specific credit institution. The above-mentioned services are not offered in Estonia, but the service “Mint” (account information) offered in the US, and “Sofort” which offers the payment initiation service in Germany, serve as examples.

The electronic communications undertakings will have to apply for authorisations as payment institutions from the Financial Supervision Authority if the payment transactions intermediated by them exceed the thresholds provided in law and other conditions (e.g. payment for physical goods or m-parking). In the case when the transactions intermediated by the electronic communications undertakings remain below the thresholds (the value of any single transaction does not exceed EUR 50 and the cumulative value of payment transactions for an individual subscriber does not exceed EUR 300 per month), no authorisation will be needed.

The security requirements relating to electronic payments will become stricter. In the future, payment service providers will have to apply the requirements of strong customer authentication. Strong authentication consists of two things: something the customer knows and something the customer possesses. Several authentication means that meet the criteria of strong authentication are already in use in Estonia, e.g. ID-card, mobile-ID, as well as various applications and password calculators. In view of that, the use of password cards as insecure authentication means will also be restricted. The maximum liability a client will have for misuse of a stolen or lost bank card will fall from the current 150 euro to 50 euro.

The sitting ended at 7.59 p.m.

Verbatim record of the sitting (in Estonian) http://stenogrammid.riigikogu.ee/en/201709271400.

Photos:

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
Marie Kukk
631 6456; 58 213 309
[email protected]
Questions: [email protected]