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At today’s sitting of the Riigikogu, the Auditor General Alar Karis gave an overview of the use and preservation of state assets in 2016-2017.

“The accounting of the state continues to be in order,” Karis said. In his words, the accounting of the state is well organised and the annual accounts of 2016 are reliable. At the same time he emphasised that transition to activity-based budgeting needed consideration because the intelligibility of the state budget would decrease with it. “It is the parliament who could tell the Government in what way the budget must be submitted so that every taxpayer, when looking at it, could understand what is done for his or her money, what the money is spent on and where the money comes from,” Karis stressed.

Karis said that the Estonian economy had grown faster than expected – construction and domestic consumption played a great role in that. State assets had increased by more than 200 million euro to nearly 29 billion euro over a year, he said. Karis underlined that when economy was doing well, it was reasonable to use the revenue to increase the state reserves and to prepare for worse times.

Karis pointed out that in 2016 the fixed expenditure had accounted for 78 per cent of the state budget, and in 2020 the share of such expenditure would amount to nearly 80 per cent of the budget, according to the forecast. The Auditor General also noted that nearly a half of the state budget went to social and health care expenditure. “Year by year, proportionally, increasingly less money remains for development,” he gave a warning.

Karis also said that Estonia had benefited much from foreign support which however was going to decrease after 2020. He expressed the conviction that Estonia was capable of managing without European funds, but he stressed that it was necessary to prepare for life without foreign support as early on as possible and with forethought.

During the debate, Andres Ammas from the Free Party Faction, Tanel Talve from the Social Democratic Party Faction, Aivar Sõerd from the Reform Party Faction and Mart Helme from the Estonian Conservative People’s Party Faction took the floor.

Three Bills passed the second 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.

In connection with the elimination of county governments, the right to organise the substitute home service will be transferred to local governments as of the new year. The current functions of county governments relating to the substitute care will be distributed between local governments and the Social Insurance Board. The right to issue activity licences will be transferred to the Social Insurance Board who will also exercise supervision in the future.

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.

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 European Union’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 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 without a credit card or the bank link service of a specific credit institution. Such 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 Bill on Amendments to the State Budget for 2017 Act (510 SE), initiated by the Government, will adjust the budget expenditure in connection with changed needs. The total volume of the revenue and expenditure will not change as a result of that. The current year’s expenditure of ministries and other authorities will be specified. Amendments to the state budget for current year have been made every autumn in the same manner.

The Government had submitted a total of 54 motions to amend to the Riigikogu. At the expense of the surplus of the co-funding of European funds, three million euro will be directed at the provision of social services, incl. the rehabilitation of children with special needs and elimination of the waiting list for technical aids. From the surplus of the co-funding, a total of 1.4 million euro will also be directed to agencies under the Ministry of Social Affairs, the Ministry of Justice and the Ministry of Rural Affairs for procurement of laboratory devices. In the area of government of the Ministry of Education and Research, 2.4 million euro will be directed to the Government’s education expenditure support fund to local governments for teachers’ salary. Within the area of government of the Ministry of Social Affairs, 100 000 euro will be directed from the medicinal product budget surplus to Põlva Hospital, in order that they could better cooperate with Tartu University Hospital. Also, on account of the surplus of the medicinal product budget, 186 000 euro will go to the emergency medical care service and 14 000 euro for the helicopter field in Kihnu which is necessary to provide the emergency medical care service. A number of other amendments were made in redirecting the budget money.

Three drafts passed the first reading in the Riigikogu:

The Draft Resolution of the Riigikogu “Approval of the Consolidated Report of 2016 of the State” (500 OE), submitted by the Government.

The aim of the consolidated annual report of the state is to give an overview of the achievement of the goals set in the state budget, and of the financial situation, economic result and cash flows of the state, and to enable the Riigikogu to exercise its auditing function with regard to the Government. The report also to provides the Government with the opportunity to explain its activities and to submit the necessary information to the Riigikogu for making new budgetary decisions.

The document contains the management report (the general economic indicators of the state, the financial indicators of the public and the government sector, the number of government sector employees, labour expenses and the average wage, the implementation of the action plan and the internal audit systems of the state), the consolidated and unconsolidated annual accounts of the state, and additional information concerning local governments and public sector and government sector. The consolidated report also includes the audit report of the National Audit Office.

Jürgen Ligi from the Reform Party Faction took the floor during the debate.

The Bill on Amendments to the Support of Enterprise and State Loan Guarantees Act (523 SE), initiated by the Government, provides for increasing the permitted total amount or limit of guarantee contracts for the business and housing loans guaranteed by the state through Foundation KredEx, in order that the Foundation could continue to provide sureties for loans of businesses and home owners.

In the case of business loans, the permitted total amount of guarantee contracts will rise from 160 million euro to 220 million euro, and in the case of housing loans, from 96 million euro to 170 million euro. This will enable to continue to guarantee loans to the extent projected until 2022.

The raising of the limits will enable to provide sureties mainly for loans of small and medium sized enterprises to a larger number of enterprises to a larger extent. This will help establish enterprises, extend their activities, or make the working process more efficient and find new solutions. The amendment will also enable to continue to provide sureties for loans taken in order to acquire housing or improve living conditions.

The Waste Bill (495 SE), initiated by the Government. The new version of the Waste Act has been prepared within the framework of the organisation of environmental law and will replace the Waste Act and the Packaging Act that have been in force so far.

One of the important amendments for the population and the waste management facilities will be the formation of the price of the service of transport of municipal waste. In order to motivate people to sort waste more, under the new procedure, the prices for separately collected waste and for mixed municipal waste will have to be indicated separately on the refuse collection bill. Since the giving away of separately collected waste is significantly cheaper than the giving away of mixed municipal waste, by setting out the price difference on the bill, customers can be motivated for example not to discard paper and packaging with mixed municipal waste.

In order to make the using of public collection containers clearer, the Act will harmonise the colour solutions for bins according to the type of packaging waste that may be discarded in them. New paper and cardboard packaging waste containers will have to be blue, glass packaging waste containers will have to be green and mixed packaging waste containers will have to be yellow. The existing collection containers will not have to be repainted because this would be too costly.

The requirements for the financial guarantee of producers and the producer responsibility organisation will be specified. The financial guarantee of a producer of products of concern will have to cover the costs of both the organisation of the management and the management of the waste from the products it places on the market. For example, if a pile of tyres is discovered in a forest, it will be removed and the costs will be covered from the guarantee.

There will also be amendments in the organisation of the collection and recovery of end-of-life tyres, waste batteries and accumulators, and WEEE from private households. In the future, the producers or manufacturers, or importers of such products will be required to accede to a producer responsibility organisation or to enter into a contract with a producer responsibility organisation. This has been voluntary so far.

At the beginning of today’s sitting, Rein Randver took his oath of office. He assumes membership of the Riigikogu, replacing Ivari Padar who will go to the European Parliament.

Verbatim record of the sitting (in Estonian).

Photos of the sitting of the Riigikogu.

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
Merilin Kruuse
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