Prime Minister Kristen Michal (Reform) said that many people have gotten the impression the €800 million surplus in the state budget should spark a rush to spend it.

"No. That €800 million will not be divided up in any new way. No one has found a pot of gold, no one has found a river of oil. It still means that the Estonian state is spending less and managing more frugally," he said.

"Let's be honest, this surplus has also come from a series of difficult decisions. The most important factor, of course, has been the well-being of Estonia's entrepreneurs, Estonia's enterprising people and the Estonian public, which has been somewhat better," he added.

"This means that more corporate income tax has been collected, more personal income tax has been collected, wages have risen — that is positive. But we have also managed to cut various administrative costs and postpone investments. That simply means some things will be done later and some things will not be done at all," Michal said.

"Last year, you'll remember, there were discussions about when different state buildings and projects would go forward. All those projects have been postponed where possible — some will happen, some will not. And that is likely how the state is also saving money," the prime minister said.

According to Michal, Estonian society has performed better as a state and public finances are stronger than expected. "I also understand that this creates two lines of thinking. One group says the surplus should now be distributed. The answer is that we will continue operating more frugally, and we will certainly make cuts. The other group says they simply don't want to believe it, because it doesn't fit their narrative that everything in Estonia is broken. Fine, let them continue saying that. But Estonia's public finances are in better shape than expected. That is a fact, in numbers," Michal said.

Michal reiterated that the government is discussing the possibility of canceling next year's planned income tax increase while also finding ways to raise the salaries of teachers, cultural workers, rescue workers and police officers.

Education Minister Kristina Kallas (Eesti 200) added that while over the last three years the government worried about having to borrow money to cover the state's fixed costs, those costs are now under control.

"This effort that the Estonian people have made to keep our country viable and sustainable, to keep our fixed costs in order — we have now achieved that. Our structural deficit has turned into a surplus. The state budget is in order and this gives us the opportunity going forward to talk about potential investments," Kallas said.

Active discussions on the state budget began this week.

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