At today’s plenary sitting, Prime Minister Jüri Ratas made a political statement before the Riigikogu in connection with the submission of the State Budget for 2019 Bill.
The expenditure and investments volume of the next year’s state budget Bill totals 11.31 billion and the revenue volume 11.06 billion.
Ratas pointed out that the state budget for 2019 was based on a positive economic cycle and was in nominal surplus and structurally balanced. He said that in the coming years the tax burden would remain steadily between 33–34 per cent and according to forecasts the debt burden would fall from the level of 8.2 per cent in 2018 to 7.4 per cent in the following year, but would not stop there. Ratas added that as low as 5.4 per cent level would be reached by 2022.
In Ratas’s words, 2019 would bring tax peace to businesses and people.
Prime Minister said that, over the next four years, the Government would invest nearly 118 million euro into the maintenance, updating and further development of Estonia’s e-state information systems and equipment.
“The next year’s state budget contributes in particular to people, public services and the development of rural areas,” Ratas said.
“To achieve social cohesion and greater welfare, it is important that the gap between different counties of Estonia would not grow too large. Therefore we will have to put a great emphasis particularly on regional development next year. We will continue to increase the revenue base of local governments, to pay transitional aids to farmers in agriculture, and several regional programmes,” the Prime Minister pointed out.
The Prime Minister said that it had been decided to contribute to growth of working people’s incomes, and to increase the salary fund of the employees remunerated from the state budget by 2.5 per cent. “The fields of education, culture, social welfare and internal security are going to see the most noticeable salary increase,” Ratas noted.
“We will also allocate significant additional funds to national defence. A total of 585 million euro, which accounts for an estimated 2.16 per cent of the GDP forecast, has been planned for the defence budget for 2019,” Ratas said.
In the Prime Minister’s words, the average old age pension will increase by 7.6 per cent from 447 euro to 481 euro in the coming year.
“The funding of special welfare services will increase to 36.9 million euro, as a result of which it will be possible to fund the existing service places as well as to create new ones. The funding of social rehabilitation will increase to 12.7 million euro, in order to ensure both quicker access to assistance and a greater volume,” the Prime Minister said. “The Government will continue the implementation of the health care reform, and the budget of the Estonian Health Insurance Fund will grow by as much as 180 million euro in total,” Ratas noted.
The Prime Minister said that 370 million euro would be directed to investments through the state budget. “We will invest in important transport and infrastructure projects, rural development, and culture and sports projects,” Ratas pointed out.
Representatives of factions took the floor during the debate. Andres Herkel (Estonian Free Party) said that, in their opinion, in the years when Estonian economy had been doing fairly well, the Government had not drafted the budget in such a manner that the more distant future would be protected in the best possible way, and that did put a big question mark over economic development as a priority. Jevgeni Ossinovski (Social Democratic Party) said that the budget for 2019 would bring more wealth as well as caring and solidarity to society. Kersti Sarapuu (Centre Party) said that the state budget for 2019 would increase the welfare of the Estonian people. In Martin Helme’s (Estonian Conservative People’s Party) opinion it was a pre-election populist budget, and that budget would never be implemented. Jürgen Ligi (Reform Party) said that they were expecting a structural surplus of the budget in an amount of at least the deficit of the previous period. Helir-Valdor Seeder (Isamaa) said that the budget was feasible to the Estonian state and had been drawn up responsibly.
Thirteen Bills passed the first reading in the Riigikogu:
The first reading of the Bill on Amendments to the Gender Equality Act and Amendments to Other Associated Acts (683 SE), initiated by the Government, that had been adjourned at Tuesday’s plenary sitting, was continued.
The Bill is intended to reduce the inequality of the wages paid to women and men for the same work or work of equal value in the public sector. The amendments will create more effective and convenient possibilities to analyse the gender pay gap, establish the state and administrative supervision of the principle of equality of the wage paid to women and men for work of equal value in the public sector (hereinafter also supervision of the principle of equal pay), and specify the current regulation with the aim of supporting the implementation of the requirement of payment of equal wages, and the supervision to be established.
At Tuesday’s plenary sitting, Marianne Mikko (Social Democratic Party) took the floor on behalf of her faction at the debate. At today’s sitting, Hanno Pevkur (Reform Party) and Henn Põlluaas (Estonian Conservative People’s Party) took the floor on behalf of factions at the debate.
The Estonian Conservative People’s Party Faction moved to reject the Bill at the first reading. 14 members of the Riigikogu voted in favour of the motion and 43 were against. The motion was not supported and the Bill passed the first reading.
The Bill on Amendments to the Environmental Charges Act and Other Associated Acts (660 SE), initiated by the Government.
The amendment will reorganise the movement of the proceeds from environmental charges. In the future, part of the funds received from environmental charges into the state budget will be allocated to the Ministry of the Environment in the amount determined by the state budget for the relevant year. At present, environmental charges accrue to the state budget, and from there to the foundation Environmental Investment Centre to a fixed extent.
The explanatory memorandum notes that the volume of the funding of the environment sector is planned to be kept at least at the current level. Only the principles of the strategic planning of the funding, the organisation of the use of the funds, and the movement of the funds between the budget lines will be changed. Therefore the amendment will involve no negative impact on the parties concerned.
The amendment is necessary because the provision for the funding volume at the charge rates that have been in force since 2009 has become unjustified and in fact limiting by now. The funding volume cannot be flexibly planned or increased as necessary for larger-scale projects.
According to an amendment, the amounts allocated for specific purposes for environmental protection would no longer depend on the proceeds from environmental charges or the charge rates, but the use of these funds would be shaped on the basis of the priorities set during the state budget strategy, the environmental protection need and the long-term strategic view.
The amendment would also put an end to the situation where the Ministry of the Environment and the authorities in its area of administration apply for funds to fund their operating expenditure, for example, monitoring, from the Environmental Investment Centre. In the future, principal activities will be funded directly from the budget of the Ministry of the Environment. This will increase the transparency of the funding of the area of administration, and workload will diminish. The Bill will also amend the Atmospheric Air Protection Act, the Administrative Co-operation Act and the Environmental Monitoring Act.
The Bill on Amendments to the Nature Conservation Act (676 SE), initiated by the Government.
The amendment of the Nature Conservation Act is intended to establish a new national park – Alutaguse National Park – for the protection of typical and rare mire landscapes, forest landscapes and coastal landscapes and traditional culture of Eastern Estonia.
The national park to be established will be located in Ida-Virumaa county and it will be established on the basis of the existing protected areas. The national park to be established in Alutaguse will include Puhatu, Agusalu, Muraka and Selisoo nature conservation areas and Kurtna, Smolnitsa, Jõuga, Struuga and Mäetaguse landscape conservation areas, the special conservation area of the headwaters of the River Narva, and the protected area of Iisaku forest park. The area of the national park planned will be 43 568 ha. The whole area is already protected today, and the extent of the restrictions will not increase with the establishment of the national park. State land accounts for 42 627 hectares and private land accounts for 910 hectares of the national park to be established.
With the establishment of the national park, a uniform natural and traditional culture complex will be created in the region which will combine the current protected areas with their values into a whole. The planned national park will consist of several detached plots of land which means that the regions between the existing protected areas will not be incorporated into the national park to be established.
Under the Bill on the Accession to the Protocol to the 1979 Convention on Long-Range Transboundary Air Pollution to Abate Acidification, Eutrophication and Ground-Level Ozone and the Acceptance of the Amendments of 2012 to the Protocol (677 SE), initiated by the Government, Estonia wishes to accede to the Protocol to the 1979 Convention on Long-Range Transboundary Air Pollution to Abate Acidification, Eutrophication and Ground-Level Ozone, which is known as the Gothenburg Protocol, and to accept the amendments of 2012 to the Protocol.
The objective of the Gothenburg Protocol is to reduce emissions of five pollutants: sulphur dioxide, nitrogen oxides, ammonia, volatile organic compounds that are caused by anthropogenic activities, and fine particulate matter. These pollutants cause adverse effects on human health, natural ecosystems, materials and crops, due to acidification, eutrophication or ground-level ozone as a result of long-range transboundary atmospheric transport. The Gothenburg Protocol has 27 parties. Ten parties to the Protocol have approved the amendments.
The Bill on Amendments to the Police and Border Guard Act and Amendments to Other Associated Acts (673 SE), initiated by the Government, will organise and amend the provisions concerning the transfer and processing of passenger name record data. The aim is to bring the Acts into conformity with the relevant EU Directive on the use of passenger name record (PNR) data for the prevention, detection, investigation and prosecution of terrorist offences and serious crime. The deadline for the transposition of the directive was 25 May 2018.
The amendments will specify the provisions concerning the processing of data in databases and the transfer of information to other authorities, and bring the data retention periods into conformity with the requirements arising from the directive.
The aim of collecting passenger name record (PNR) data is prevention and detection of terrorist offences and serious crime. In the countries where the processing of PNR data is used already, it has helped catch several criminals operating internationally. In 2018 all 28 Member States will adopt the PNR data system in the European Union. The system is also used for example in the USA, Canada, Australia, New Zealand and Mexico. The adoption of the PNR data system will involve no changes for passengers.
The Bill on the Ratification of the Agreement between the Republic of Poland and the Republic of Estonia on the Amendment and Termination of the Agreement between the Republic of Poland and the Republic of Estonia on the Reciprocal Promotion and Protection of Investments (672 SE), initiated by the Government.
Termination of the agreement is necessary in order to ensure that investors from all EU Member States are accorded equal treatment based on European Union legislation.
The agreements for the promotion and protection of investments concern areas that are regulated by EU law – in particular the freedom of establishment and the free movement of capital and payments. Thus, protection of investments and equal treatment of investors is regulated by EU law, and there is no need for bilateral agreements between member states.
As regards European Union Member States, Estonia has entered into agreements on the protection of investments with Austria, Finland, France, Germany, Greece, Latvia, Lithuania, the Netherlands, Spain, Sweden and the United Kingdom. Earlier, Estonia has terminated similar agreements with Italy, Czechia and Denmark.
Under the Bill on Amendments to the Act on Amendments to the Social Tax Act and the Income Tax Act, the Waste Act and the Social Welfare Act (685 SE), initiated by the Government, more flexible possibilities for organising waste management and social services will be created for local governments by eliminating the relevant supports and increasing the revenue base of local governments. The requirements set for local governments for collection of waste by type and offering social services will remain the same.
The Bill will provide for elimination of the 2.2 million support of development of waste handling and the 2.5 million support of social benefits and provision of social services. The total of 4.7 million euro of funds released will be directed to the revenue base of local governments.
According to an amendment, the rate for calculating the income tax for local authorities will be increased by 0.03 percentage points. In 2019, the rate of the income tax allocated to local governments will rise from 11.9 per cent to 11.9 per cent, and in 2020 from 11.93 per cent to11.96 per cent. The current rate of the income tax allocated to local governments is 11.86%. The raising of the income tax rate will impact the budget by 2.9 million euro.
The aim of the Heritage Conservation Bill (684 SE), initiated by the Government, is to improve the conservation of cultural heritage. To this end, the duties and rights of the state and those of the owner of a monument are planned to be balanced.
In addition, the Bill should make the decision-making more flexible for owners of cultural monuments, contribute more to advisory and prevention activities, and strengthen the protection of the archaeological heritage. The planned amendment will first and foremost serve private owners, who own 80 per cent of architectural monuments. Monetary compensation of restrictions, advising and alleviations will extend to all classes of heritage conservation monuments.
The Bill also provides for changing the name of the National Heritage Board, because the activities of the board will cover both heritage conservation and museums.
During the debate, Laine Randjärv (Reform Party) and Krista Aru (Estonian Free Party) took the floor on behalf of factions.
The Bill on Amendments to the Public Information Act (671 SE), initiated by the Government, will transpose into national law the EU directive on the accessibility of the websites and mobile applications of public sector bodies. The directive aims to make the websites, e-services and mobile applications of public sector bodies better perceivable, operable, and robust for people, including persons with disabilities.
In the future, the websites and mobile applications of state and local government agencies, legal persons in public law, legal persons in private law and natural persons who are holders of information will have to meet technical accessibility requirements that allow persons with special needs to conveniently consume the content of websites. As an exception, the accessibility requirements will not apply to holders of information providing a media service (e.g. the Estonian Public Broadcasting), as well as schools and pre-school child care institutions, except in the case of publication of general information, including information on acceptance, location and contact details. Some types of web content, such as online maps and mapping services, and the reproduction of items in heritage collections, have been excluded from the scope of the Directive.
In addition to accessibility, in the future, the Act will require indication of the date of publication and updating of the documents on websites. The requirements that have so far been established for websites will also apply to mobile applications in the future.
The Bill on Amendments to the Copyright Act (transposition of the Marrakesh Directive) (686 SE), initiated by the Government.
The directive aims to ensure better access to books and other printed material for visually impaired persons. The directive allows to make accessible format copies (e.g. an audio book of a book) of various works (book, journal, newspaper, magazine and other kinds of writing) without the consent of the author for persons who are visually impaired.
The EU directive is based on the Marrakesh Treaty of the World Intellectual Property Organisation. The treaty was adopted in 2013 and it entered into force on 30 September 2016. The conclusion of the Marrakesh Treaty falls into the exclusive external competence of the EU because the obligations provided for by the treaty fall into an area covered by EU common rules.
The Bill on Amendments to the Government of the Republic Act and Other Acts (merger of the Consumer Protection Board and the Technical Regulatory Authority, and elimination of the deficiencies pointed out in the infringement procedure no. 2017/2072) (651 SE), initiated by the Government, is intended to merge the Consumer Protection Board and the Technical Regulatory Authority as of 1 January 2019 in order to enhance state supervision and to increase the number of services offered.
The merger of the authorities proceeds from a more general principle of the state reform which is reduction of duplication in state offices, reduction of the number of administrative agencies and improvement of the quality and availability of public services. In preparation for the merging of the divisions of the area of government of the Ministry of Economic Affairs and Communications, amendments will need to be made to 55 Acts.
In addition, the Bill will amend the Government of the Republic Act and the Civil Service Act in order to eliminate the deficiencies in Estonian law due to insufficient transposition of the relevant directives on the electricity market and natural gas, in regard to which the European Commission has started infringement proceedings against Estonia. An additional restriction on the term of office of the Director General of the Estonian Competition Authority will be included into the Civil Service Act. In the future it will be possible to extend the five-year term of office only once. An exclusion under which the minister will have no right of supervisory control of the Competition Authority with regard to functions arising from the Electricity Market Act and the Natural Gas Act will be included into the Government of the Republic Act.
The principal purpose of the Bill on Amendments to the Railways Act (670 SE), initiated by the Government, is to transpose the EU directive laying down and specifying requirements to ensure the independence of infrastructure managers and non-discriminatory treatment of applicants for capacity, and efficient competition. In addition, the rights of the regulatory body when performing supervision will be specified.
The proposed amendments regarding the opening of the market for domestic passenger transport services and the governance of the railway infrastructure meet the objectives of the railway system and improve its competition conditions and efficiency. The amendments will facilitate economic growth, increase possibilities for use and the performance of the railway infrastructure, and reduce barriers and obstacles to entering the market, thanks to elimination of conflict of interest. The amendments will also ensure financial transparency and reduce regulatory costs by limiting the cost of implementation of the amendments.
The impacts of the amendment to the directive are positive on the European rail market and suitable for Estonia because we already have an open rail market and separate infrastructure managers and transport operators which ensures equal treatment of shippers. The directive gives Member States the possibility to restrict the passenger market under certain conditions, but Estonia does not consider this possibility viable and will not provide for stricter requirements than provided for by the directive, and will not implement the requirements of the directive before the date of its entry into force.
The Bill on Amendments to the Government of the Republic Act and Other Acts (662 SE), initiated by the Government, will make the regulations more flexible and give ministers the possibility to delegate the performance of acts and the decision-making to officials on behalf of the authority. According to the Government of the Republic Act, the Planning Act and the Acts concerning the ownership reform, as a general rule, at present, the minister responsible for the field conducts administrative proceedings and exercises administrative supervision.
The Bill will give a minister the right to authorise a cooperation body of a local government to carry out an administrative duty of the state related to implementation of a national support programme. Under the current legislation, state authorities or, under the authorisation of a minister, state foundations have the right to perform such administrative duties. However, by their essence, several regional support programmes are better implemented at the local government level (for example, the local self-initiative programme and the sparsely populated areas programme).
With the amendment to the Land Reform Act, the minister responsible for the field will be given the right to authorise an authority of the area of government the Ministry of the Interior (the Police and Border Guard Board or the Internal Security Service) to provide a position of the Ministry of the Interior for the privatisation of border land areas.
In addition, the amendment to the Government of the Republic Act will abandon the requirement of higher education in law for the post of the State Secretary, because the changed functions and activities of the Government Office no longer necessarily require it.
The sitting ended at 7.38 p.m.
Verbatim record of the sitting (in Estonian) http://stenogrammid.riigikogu.ee/en/201809261400.
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.)