Government unsure if state budget funds sufficient to boost salaries
At the end of August, the Estonian government will begin drafting next year's state budget. Although members of the ruling coalition would like to raise the salaries of teachers, police officers, rescue workers, and cultural workers next year, it is not yet certain whether there will be enough money to do so.
Minister of Education and Eesti 200 Chair Kristina Kallas said one of the most important issues when preparing next year's state budget is ensuring workers' salaries are at a level that better enables them to get by.
"The salaries of teachers, rescue workers, cultural workers and police officers have fallen behind over the last two years, so I think this is definitely a priority, in order for us to be able to bring the salaries of workers in these fields back to a level where their purchasing power is not so low," Kallas said.
"Teachers and cultural workers have been on the same salary for a long time. Last year and this year, public sector salaries have been driven by the large sector of medical workers, but teachers, cultural workers, and internal security are definitely at the top of the list when it comes to raising salaries a little bit," said Annely Akkermann (Reform), chair of the Riigikogu's Finance Committee.
On August 26, the Ministry of Finance will publish its summer economic forecast, showing the state of the country's finances and what expenditures can be planned into the state budget. According to Akkermann, those receiving social benefit recipients will need assistance.
Prime Minister Kristen Michal (Reform) has suggested that if tax revenues are higher than expected and the budget allows, the income tax increase planned for next year could be abandoned. According to the current plan, income tax is due to rise from 22 percent to 24 percent from January next year. However, both the chair of the Finance Committee and the minister of education are cautious about that proposal.
"We can discuss it in real terms once the summer economic forecast is on the table. Somehow, what has been overlooked is that a decision has already been made to grant everyone a tax-free allowance of €700, which will significantly reduce personal income tax and amount to €500 million and 1.2 percent of GDP," said Akkermann.
"Increasing the budget deficit is not in the interests of the Estonian state and economy. Nor is it in the long-term interests of future generations, who will have to pay back this debt. We run the risk of rapidly increasing this debt burden if we go into deficit," said Kallas.
Andres Metsoja, secretary general of opposition party Isamaa, said that money from the state budget is needed for road construction and education.
"The key to Estonia's success is education and access to education. This direction is extremely important, and we must not fall behind. We may end up in a situation where our educational landscape has been transformed," said Metsoja.
The government has to submit the proposed state budget to the Riigikogu by September 25 at the latest.
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Editor: Michael Cole, Johanna Alvin
Source: "Aktuaalne kamera"
