At the second reading of the State Budget for 2016 Bill (103 SE), initiated by the Government, Chairman of the Finance Committee Remo Holsmer gave an overview of the course of the proceedings.
Holsmer explained that the volume of the budget expenditure is 8.9 billion euro, which exceeds the amount planned for this year by 358 million euro. The Government aims to maintain the budget in structural surplus of 0.6 per cent of GDP. Nominal deficit is 0.1 per cent of GDP, that is, 25 million euro. The tax policy is based on the principle that the tax burden would be shifted from the labour taxes more towards consumption. “Estonia will continue with a simple and uniform tax policy. Of the tax policy changes in the next year, I would highlight that the basic exemption from income tax will increase to 170 euro. The general tax burden as a proportion of GDP will remain at approximately the same level, that is, 3 per cent,” Holsmer noted.
He highlighted that government sector investments will be of significant importance for supporting economic growth next year. They will increase together with investment subsidies in the state budget by 22.5 per cent compared to this year and will amount to 480 million euro. Economic growth will also be promoted through the valuing of education. Holsmer said that teachers’ salaries will rise in the next years, and a longer-term aim is to raise teacher’s salary to 120 per cent of the average salary in Estonia. A total of 307 million euro will be directed to the building and reconstruction of roads and road management, which is 22 million more than this year.
Holsmer noted that, in the course of the proceedings of the state budget, the Finance Committee has listened to all Government ministers in order to get a detailed overview of the budgets of the areas of government.
The members and factions of the Riigikogu submitted 37 motions to amend the Bill by the deadline for submission of motions to amend. The Finance Committee has drafted a motion to amend that to a great extent consists of technical amendments between and within the areas of government of ministries, and specifications of the sections in the text. The amendment by the Committee proposes, among other things, consolidation of the finance and personnel records to the State Shared Service Centre, and growth of the labour costs of culture workers, the budgetary specific distribution, so to say. 1.5 million euro will be reallocated within the Ministry of Rural Affairs for the development of the rural development subsidy system of the Estonian Agricultural Registers and Information Board. The salary growth in the Ministry of the Interior will be distributed between divisions. Also, through rearrangement of the funds of the National Institute for Health Development, funds will be allocated for the implementation of the prevention activity.
The Finance Committee did not support the motions to amend submitted by the factions and members of the Riigikogu. Holsmer said that the main problem with the motions was that one-off sources for covering were intended to be used for increasing fixed costs, which is not sustainable in terms of the budget. Likewise, the Committee did not consider it reasonable to reduce the expenses planned for celebrating the 100th anniversary of the Republic of Estonia and for Estonia’s presidency of the European Union. Also, it was considered impossible to spend practically all of the Government reserve, which will total 49 million euro next year. Nor did the Committee support the proposal to sell the liquid fuel stocks which would have meant a great loss to the state at today’s low fuel prices.
Holsmer stressed that the next year’s budget supports economic growth and strengthens national defence and social responsibility.
Aadu Must, Erki Savisaar, Marika Tuus-Laul, Laine Randjärv, Tarmo Tamm, Andres Ammas, Külliki Kübarsepp, Toomas Vitsut, Krista Aru, Märt Sults, Monika Haukanõmm, Siret Kotka, Peeter Ernits, Jüri Adams, Jaanus Karilaid, Jaanus Marrandi, Artur Talvik, Mart Helme, Maire Aunaste, Helmen Kütt, Viktor Vassiljev, Aivar Kokk, Kadri Simson and Andres Herkel took the floor during the debate.
The Riigikogu reviewed the motions to amend the budget and concluded the second reading of the coming year’s state budget Bill. The deadline for submission of motions to amend for the third reading is 25 November at 3 p.m.
Riigikogu passed two Acts
The Act on Amendments to the Act on Narcotic Drugs and Psychotropic Substances and Precursors thereof (64 SE), initiated by the Government, was passed with 84 votes in favour.
The current Act was specified according to the amendments that have taken place in European Union law under which operators have to register with the Agency of Medicines if they wish to begin to acquire precursors of narcotic drugs and psychotropic substances. Also, it is possible for state forensic institutions to give narcotic drugs and psychotropic substances and precursors thereof to authorities for research and development activities.
The Act on Amendments to the Communicable Diseases Prevention and Control Act and Other Acts (74 SE), initiated by the Government, was passed with 83 votes in favour.
The Act amends the provisions concerning the imposition of involuntary treatment on persons suffering from extremely dangerous communicable disease. It also specifies the obligation of the family physician to ensure the availability of immunisation to the patients on his or her practice list. The Act reduces the obligation of employers to organise and finance medical examination of employees in areas of activity with a major risk of spreading infection. According to the Act, regular medical examination of employees in regard to communicable diseases will no longer be required in the future.
The Riigikogu concluded the second reading of three other Bills
The Bill on Amendments to the State Budget for 2015 Act (120 SE), initiated by the Government.
The Bill introduces amendments to this year’s state budget with which the expenditure is adjusted in connection with changed needs. The total volume of the state budget revenue and expenditure will not change as a result of that but the current year’s expenditure of ministries and other authorities will be specified. The Bill contains 84 motions to amend.
The Bill provides for the allocation of 3 million euro top-up additional payments to alleviate the difficult economic situation of the agricultural sector already before the end of the year. The additionally allocated money will be added to the extraordinary aid from the European Union.
As the needs-based family benefits have taken up less money than was forecast this year, the 6.27 million that was released can be directed to the Ministry of Social Affairs for shortening the waiting lists for technical aids and rehabilitation, to laboratory equipment for the Health Board, to working clothes for the Labour Inspectorate, and to the recovery of the reserve of the Government of the Republic.
The budget for the special defence equipment of the Ministry of Defence will be increased by 9 million euro. A part of the currently unused funds for investments into buildings and constructions will be used for that.
In the budget of the Ministry of Economic Affairs and Communications, 6.77 million will be released from the funds planned for the national roads project and the procurement of ships for the connection with small islands. The Government directed it mainly to support Estonian Railways Ltd that develops infrastructure. Elron which organises carriage of passengers will receive additional 2.25 million euro for lease payments for trains.
The explanatory memorandum notes that 5.9 billion euro of the revenue planned with the state budget for 2015, that is, 69.8 per cent of the amount planned for the year, has been received in nine months of this year. The expenditure incurred in the same period amounted to 5.98 billion euro which is 69 per cent of the amount planned for the year.
The Bill on Amendments to the Act on Amendments to the Social Tax Act, the Income Tax Act and Other Acts, and the Income Tax Act and the Social Tax Act (99 SE), initiated by the Government.
The Bill will postpone the rises in excise duty for fuel planned for 1 January 2016 by one month, that is, to 1 February 2016. The excise duty rise will be postponed with the aim of raising the receipt of excise duty on fuel in 2016. The Bill will have a positive impact on interest groups (excise warehouses, sellers and consumers of fuel) although the impact will be small as the excise duty rise will be postponed by only one month.
The Bill on Amendments to the Fisheries Market Organisation Act (101 SE), initiated by the Government.
The Bill introduces amendments and specifications in the Act that are necessary particularly for better organisation of the grant of support from producers’ organizations in the fishery and aquaculture sector and from the European Maritime and Fisheries Fund (hereinafter EMFF), and state aid to fisheries. The amendments are necessitated by new legislation issued by the European Commission that was not in place at the time of the passing of the Fisheries Market Organisation Act, and the need to resolve the issues that have been raised in practice.
The Bill specifies the conditions for the recognition of producers’ organizations by introducing a provision into the Act under which producers’ organizations will be recognised as regards economically important species. The deciding on the grant of production and marketing plan support (which is one of EMFF supports) will be transferred to the competence of the Estonian Agricultural Registers and Information Board. Issues relating to the implementation of the local development strategy are specified.
The Riigikogu concluded the first reading of ten Bills and Resolutions
The Bill on Amendments to the Guarantee Fund Act and Amendments to Other Associated Acts (119 SE), initiated by the Government.
The amendments made by the Bill will increase the feeling of security of depositors and protect them better from the consequences of possible bankruptcy of banks. The Bill is based on the relevant EU directive.
The Bill provides that only deposits of private persons and ordinary companies will be covered by the Deposit Guarantee Sectoral Fund of the Guarantee Fund. An investment fund with risk premium where the amount initially invested may no longer be recoverable in full will no longer be covered by the sectoral fund. Deposits of other financial institutions, for example, deposits of undertakings issuing consumer loans, will also be not covered.
The amount of the deposit covered will remain unchanged. It is up to EUR 100 000, together with interests, per depositor per bank. The Bill provides that the money received from the sale will be guaranteed to the extent of up to EUR 50 000 to a person who has sold a residential property. This money will be refunded within six months as of the receipt of the money from the sale and purchase transaction.
According to the Bill, the period of payment of compensations to depositors in the event of bankruptcy of the bank will be reduced from the current 20 working days to seven working days.
According to the Bill, the financing of the Deposit Guarantee Sectoral Fund of the Guarantee Fund by banks will also be changed. The relevant payments by the bank will be partly dependent on the risk degree of the bank. At present, banks make advance payments to the Guarantee Fund. The explanatory memorandum notes that the funds raised to the Guarantee Fund amount to 206 million euro.
The Guarantee Fund guarantees the deposits of only the banks that have been authorised in Estonia. Deposits in branches set up by banks of other Member States in Estonia will be covered by a guarantee scheme in the host Member State.
The Bill on Amendments to the Packaging Act (125 SE), initiated by the Government.
The Bill will mitigate undertakings’ obligations regarding the audit of the data to be submitted to the packaging register. Packaging undertakings who place on the market less than five tonnes of packaging per year will be exempt from it. According to statistics, there are circa 2000 such small undertakings in Estonia. The share of the quantity of packaging placed on the market by these undertakings in Estonia is below 2 per cent. The Bill also reduces the thoroughness of the auditing of the quantities of packaging of some packaging undertakings and recovery organisations. In the future, as a general rule, the checking of the source documents of the goods will be sufficient. Additional auditing will be carried out as necessary only in the case when the sworn auditor has reason to believe that there are significant misrepresentations in the packaging records.
Draft Resolution of the Riigikogu “Use of the Defence Forces in the Performance of the International Commitments of the Estonian State in the Composition of the NATO Response Force” (131 OE), submitted by the Government.
The draft Resolution provides for the use of up to 210 active servicemen of the Defence Forces in the composition of NATO Response Force NRF in 2016 as necessary. Next year, Estonia wishes to contribute with active servicemen of special forces to the very high readiness force VJTF (Very High Readiness Joint Task Force) in the composition of the NRF; with a minehunter, a crew and staff officers to the standing naval units SNF (NATO Standing Naval Forces) in the composition of this Force, and with an infantry company together with a logistics element to the IFFG (Initial Follow On Forces Group).
Draft Resolution of the Riigikogu “Extension of the Time Limit for the Use of the Defence Forces in the Performance of the International Commitments of the Estonian State in the Peacekeeping Mission in Kosovo” (132 OE), submitted by the Government.
The draft Resolution will extend the time limit for the use of up to three active servicemen of the Defence Forces in the membership of the NATO-led Kosovo peacekeeping force KFOR (Kosovo Force) to 31 December 2016. Estonia has participated in the NATO peacekeeping mission in Kosovo since 1999.
Draft Resolution of the Riigikogu “Use of the Defence Forces in the Performance of the International Commitments of the Estonian State in the European Union Military Mission EUNAVFOR Med” (133 OE), submitted by the Government.
The draft Resolution provides for the use of up to two active servicemen in the composition of the European Union military mission EUNAVFOR Med (EU Naval Forces in the Mediterranean) from 1 January to 31 December 2016. The aim of the operation is to disrupt the activities of human traffickers in the central area of the Mediterranean: between the territorial seas of Italy and Malta, and Libya. Estonia is participating in the EUNAVFOR Med operation with a logistics staff officer starting from August this year. In 2016, participation will be continued with one staff officer at the mission headquarters.
Draft Resolution of the Riigikogu “Extension of the Time Limit for the Use of the Defence Forces in the Performance of the International Commitments of the Estonian State in the European Union Training Mission and the UN Peacekeeping Mission in Mali” (134 OE), submitted by the Government.
The draft Resolution will extend the time limit for the use of up to ten active servicemen of the Defence Forces in the European Union Training Mission EUTM Mali (European Union Training Mission in Mali) from 1 January to 31 December 2016. The time limit for the use of up to ten active servicemen of the Defence Forces in Mali in the UN peacekeeping mission MINUSMA (United Nations Multidimensional Integrated Stabilization Mission in Mali) will also be extended until the end of the next year. In 2016, Estonia will contribute to the EUTM Mali mission with instructors whose task will be military training of the units in Mali. Contribution will also include staff officers who will participate in the planning and advising process of the training of the units in Mali. Next year, Estonia will contribute to the MINUSMA with two staff officers and an observation and advising team who will serve in the All Sources Information Fusion Unit ASIFU led by Holland in the composition of the MINUSMA.
Draft Resolution of the Riigikogu “Use of the Defence Forces in the Performance of the International Commitments of the Estonian State in Another International Military Operation Led by the North Atlantic Treaty Organization or its Member State, the European Union or the UN upon the First Contribution thereto” (135 OE), submitted by the Government.
The draft Resolution provides for the use of up to 50 active servicemen, as necessary, in an operation led by the North Atlantic Treaty Organization or its Member State, the EU or the UN, or in another international military operation in compliance with the generally recognised principles of international law next year. The exact contribution of Estonia and the amount will depend on the needs of a specific operation and the possibilities of the state. Estonia can contribute with staff officers as well as certain units, for example, mine clearance team, infantry platoon or special forces. The draft Resolution will ensure that rapid and flexible contribution to operations is guaranteed with a Resolution of the Riigikogu.
Draft Resolution of the Riigikogu “Extension of the Time Limit for the Use of the Defence Forces in the Performance of the International Commitments of the Estonian State in the Training and Advisory Mission in Afghanistan” (136 OE), submitted by the Government.
The draft Resolution will extend the time limit for the use of up to six active servicemen in the composition of the NATO-led advisory and training mission Resolute Support (RSM) in Afghanistan until the end of 2016. Estonia will continue contribution with a four-member mine clearance team in the North-Afghanistan region led by the framework country Germany. The Estonian state has participated in the ISAF (International Security Assistance Force) Afghanistan operation for 11 years (2003-2014), and is participating in the RSM starting from 2015.
Draft Resolution of the Riigikogu “Extension of the Time Limit for the Use of the Defence Forces in the Performance of the International Commitments of the Estonian State in the Post-Conflict Peacekeeping Mission in Lebanon, Israel, Egypt and Syria” (138 OE), submitted by the Government.
The draft Resolution will extend the time limit for the use of up to six active servicemen in the UN-led peacekeeping mission UNTSO (United Nations Truce Supervision Organization) in Lebanon, Israel, Egypt and Syria until the end of next year. Estonia mans positions of staff officers as well as senior staff officers. The function of the UNTSO is to observe adherence to peace agreements and armament agreements in the Middle East, and to prevent escalation of conflicts. The Estonian military observers have been participating in the membership of the UN military observation mission since 1997.
Draft Resolution of the Riigikogu “Extension of the Time Limit for the Use of the Defence Forces in the Performance of the International Commitments of the Estonian State in the UN Peacekeeping Mission in Lebanon” (137 OE), submitted by the Government.
The draft Resolution will extend the time limit for the use of up to 50 active servicemen in the composition of the UN-led international peacekeeping mission UNIFIL (United Nations Interim Force in Lebanon) in Lebanon until the end of next year. The rotation of the Estonian servicemen participating in the operation takes place twice a year. Therefore, both leaving and arriving units can stay in the operation area simultaneously in the rotation period. For that purpose, the draft Resolution provides that the maximum limit for the Defence Forces for participation in the Lebanon operation can be increased in the rotation period to up to 100 active servicemen within one month as of the arrival of the members of the Defence Forces who participate in the rotation in the operation area. The majority of the Estonian contingent consists of a mechanised infantry platoon together with a logistics element and staff officers. The duties of the group will be observation, patrols and the manning of checkpoints, which will also involve cooperation with the Lebanese armed forces.
The sitting ended at 9.27 p.m.
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
Gunnar Paal, 6316351, 51902837