On August 28, 1920, the Law on the Abolition of Estates, passed by the Constituent Assembly, came into force. With it, Estonia abolished social estates (the nobility, clergy, townspeople and peasants), along with all laws and regulations that granted class-based rights, privileges, obligations or restrictions.

And yet, a century later, we find ourselves in a situation where a new privileged class has emerged: civil servants and employees in the government sector. I don't recall any election promises that included granting special privileges to public sector positions, yet somehow these have quietly come into being.

€150 million worth of privileges

Everyone gets at least 35 days of paid vacation. The law requires only 28 days, but in the government sector, it's 35. For some positions, additional vacation days are granted based on years of service.

If all these positions are genuinely necessary, then one extra week of vacation amounts to roughly a 1.9 percent increase in the number of state-paid employees. Based on first-quarter 2025 data (stat.ee tbl PA115), this translates to approximately €94 million in additional annual salary expenses — assuming replacements are not hired just to cover vacation periods. It's understandable that positions involving life-threatening duties merit longer vacations, but why should every office worker or civil servant receive the same?

On top of that, starting from the 11th year of public service, a person's old-age pension is increased by 10 to 50 percent. Higher salaries already result in higher pensions compared to the private sector and now seniority bonuses are tacked on as well.

No wonder public administration has been the most popular university major for years. In 2024, a total of 10,628 individuals received public service pension supplements, amounting to around €28 million (according to a response to a public information request). It's worth noting that since April 2018, no new recipients should have been added to the enhanced pension scheme, but based on the principle of legitimate expectation, these supplements will continue to be paid out for decades — costing tens of millions of euros annually.

On top of that, there are still special pensions for years of service — most recently awarded to 6,887 people — and the annual indexed salary increases for high-ranking public officials, which were established by law in 2009, during a period often described with terms like "economic crisis" and "budget squeeze."

In sum, I estimate the cost of public sector employee privileges to the state budget could be in the ballpark of €150 million annually.

Proposal: eliminate the 35-calendar-day standard vacation in the public sector and align it with the private sector's 28-day requirement.

No overview of state officials' training budget

Despite all the aforementioned privileges, it seems a public servant can be a complete dilettante in their role — otherwise, why would they need constant training? The Ministry of Finance responded to a public information request by saying it does not know the total amount spent on training in the government sector.

I assume we're talking about several tens of millions of euros. But I can't confirm that, since even the Ministry of Finance claims not to know. Or, more likely, they simply don't want to disclose the figures, because according to the website of the State Shared Service Center, the portal consists of six modules, including one for training, and allows for tracking down to the individual level.

This suggests that government agencies actually have very comprehensive data on state employee expenditures, but those figures are probably too embarrassing to publish — so they deny having the information.

Training costs are most likely buried within personnel expenses. Somewhere in there are the costs of attending all sorts of conferences. Companies with "conference" in their name received a total of €4.25 million in transfers over the past four years; this year alone, €522,252. One Finnish company, Nordic Business Forum Oy, has been "gifted" €418,739 from 2021 to 2025.

Especially odd is that employees of the highest government body — the Government Office — have been trained by a company called Arengupartner OÜ to the tune of €80,325 over the past four years. This company specializes in coaching. According to their website, coaching is described as: "A partnership that brings clarity, helps set goals, inspires and empowers. As a coach, I help you think, make decisions and move forward. Coaching helps you make sense of your life and realize your potential." If even the Government Office team needs coaching, what are we supposed to think?

There's nothing inherently wrong with training. But it should produce a measurable positive effect — reflected in the state budget as reduced administrative costs or increased efficiency. If that effect doesn't materialize, then spending millions on training is not just wasteful — it's actively harmful.

Officials have become procurers

The government sector engages in a great many activities that generate direct financial costs — activities that are supposedly meant to improve something. And yet, those improvements are nowhere to be found in the state budget, nor are they felt by the average citizen.

There was a time when civil servants themselves prepared development plans and strategic documents. That meant they had to be trained in their subject areas, relied on their own expertise and were also accountable for the results. Now, almost everything is outsourced: training, studies, development strategies, public relations and consulting services — all subcontracted to the private sector. Civil servants have effectively become procurement officers.

A new economic sector has emerged — what might be called a shadow government sector. These are private companies that carry out a large share of core public sector and municipal functions. And they don't come cheap. Most are microenterprises with one or two employees, producing development plans, studies and other "folders" on behalf of officials — documents whose actual usefulness is highly questionable, if not outright harmful.

If the content of these "services" weren't harmful, we wouldn't be seeing a growing state budget deficit. The economy would be developing and the efficiency of governance would be improving. But perhaps the need to outsource core functions arises from the fact that, by some reports, nearly half of government employees are working from home. It brings to mind an old saying from the Russian army: "The soldier sleeps, but the service time counts."

Two random examples:

• Consultare OÜ. Primarily produces comprehensive plans, environmental studies and inventories, energy and climate strategies for municipalities and government institutions. One example: "Climate resilience assessment and 'do no significant harm' (DNSH) evaluation of the Märjamaa School of Music and Art." The company has the equivalent of two full-time employees. From 2021 to 2024, it earned €826,401 in revenue, of which €392,725 was profit. In just the first eight months of 2025, its revenue from the public sector has already reached €204,904.
• Cumulus Consulting OÜ. Specializes in strategic planning and development documents for local governments and public institutions. One example: "Development Plan for Prangli Island 2020–2030." With the equivalent of three full-time employees, the company earned €2,022,090 in revenue from 2021 to 2024, with €909,962 in profit. Its public sector revenue in the first eight months of 2025 is already €269,693.

The "usefulness" of all these document folders is clearly reflected in the state budget.

Why does an ornithologist make double what a rescue worker does?

Let's talk about studies. In 2024, the Ministry of Climate commissioned a study from a company called Roheline Rada OÜ, titled "Assessment of the macro- and socio-economic impacts of the most important additional measures needed to achieve climate goals." The company was paid €53,680 for this.

Between 2023 and 2024, the Ministry of Economic Affairs and Communications commissioned another study from the same company via public procurement: "Development of a methodology for assessing the direct and indirect socio-economic impact of internationally relevant cultural and sports events." The sole beneficiary of this OÜ is hydrobiologist Kristjan Piirimäe. He was paid €99,893 for the project. The company's labor costs over those two years amounted to just €4,091, while the profit totaled €53,673.

Meanwhile, no socio-economic impact assessments have been carried out for the numerous nature protection restrictions that have tangibly worsened both people's livelihoods and the state budget. Yet we're commissioning studies on niche topics like tourism. Why are we commissioning socio-economic impact assessments from a hydrobiologist in the first place? Do we no longer have economists?

According to Statistics Estonia, there were 44,001 non-profit organizations (NGOs) in 2024. The Business Register, as of September 16, 2025, reports 23,976 such entities when including foundations. Either way, the number is vast. Among them are also public transport centers. If you exclude the funds allocated to those, the total amount distributed to the remaining NGOs by government agencies last year was €201.5 million.

Certainly, many NGOs do essential work. But we're still talking about enormous sums of money — money that primary taxpayers have to work very hard to generate for the state. Distributing such amounts should require very strong justification.

For instance, the Estonian Ornithological Society received €877,734 last year. In previous years, their annual funding exceeded half a million euros. They had the equivalent of nine full-time employees, earning an average salary of more than €3,100 per month. How is that justifiable when, for example, the average salary of a firefighter is about €1,600 — and governments have repeatedly claimed there's no money to raise it? And this NGO is far from unique.

Proposal: eliminate public subsidies to all interest group NGOs. That would save the state many millions of euros. Let interest groups fund their own organizations through membership fees. If the interest is genuine, people will be willing to invest in it — and they can set salaries according to what they deem appropriate.

Change needs to begin with education

What happens in education largely determines how many students will go on to contribute to society, generate redistributable added value or fill essential roles.

The Estonian Qualifications Authority (Kutsekoda) has, for years, produced OSKA reports that outline which professions are in demand in the labor market — and which are not. And yet, there's still a reluctance to steer higher education in line with the needs of society. Mass training continues in low-demand fields simply because those programs are popular.

There is one exception: in medical education, the number of residency positions is used to regulate the specialization paths of medical graduates according to societal need. Why can't the same principle be applied across all fields of higher education? Why don't equal rights and responsibilities apply to everyone in Estonia? And if OSKA reports aren't being used anyway, then perhaps the Estonian Qualifications Authority should be dissolved. The savings last year alone would have been around €3.9 million.

By comparison: entrepreneur Taavi Kotka, who is committed to advancing young people's education, has said that providing basic engineering education to every child in Estonia would cost about €2.5 million per year.

I personally can't tally up how many tens — or possibly hundreds — of millions of euros are spent each year on completely useless activities. But the Ministry of Finance should be required to do so, because they have the data — as evidenced by their website, which is also the source of most of the figures cited in this commentary.

Proposal: ban all outsourced studies, trainings, development strategies, environmental impact assessments and similar activities in the government sector for the next three years — with the sole exception of national defense. This would leave standing only those vocational, scientific and technical enterprises for which there is real market demand and officials could focus solely on the tasks that are genuinely necessary.

From state nobility back to statesmanlike conduct

There are many areas where savings could be found in the public sector. But first, the government must come to understand that efficiency in governance or a balanced state budget are not goals in themselves — they are tools. The actual goal should be the broadest possible well-being of the citizenry, not just that of the governing elite. And citizens' well-being also means taxing them only as much as is truly necessary — and primarily for essential societal needs.

Whether we like it or not, the distinction between primary and secondary taxpayers is a fact. You won't find this in textbooks, of course, but it also doesn't imply judgment.

The first group consists of people in the business sector; the second group comprises those employed in the public sector. Public sector wages and taxes can only exist if the business sector first contributes tax revenue. I stress the word "contributes," because not everyone fulfills their civic duties honestly.

Since the redistribution of contributed tax revenue has been entrusted to a very small group of secondary taxpayers — top politicians and senior officials — we should expect from them a sense of statesmanship. That means prioritizing society's essential needs in that redistribution, rather than favoring themselves and their own pet initiatives.

The long-standing failure of this sense of duty is precisely what we now see reflected in the current state of the national budget.

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