Opposition wants tax cuts, increase in child benefit in 2026 state budget
Opposition parties have submitted a range of tax changes and increases in family support among their amendments to the state budget bill for 2026.
The deadline for doing so is Wednesday afternoon.
The Center Party's parliamentary group made eight amendment proposals with the stated aim of improving living standards and addressing the demographic crisis.
Faction chair Lauri Laats said inflation and the economic downturn have worsened the living conditions for Estonian families, while next year's budget fails to offer solutions to the main problems.
Center calls for a VAT cut on food, abolishing the car tax, reinstating free in-county public transport, and boosting child benefits for the first and every subsequent child, to €100 a month, a policy it holds in common with the Social Democrats (SDE). The party also supports raising the support for single pensioners by €100, to €300.
SDE made 17 amendment proposals to the budget, five from its parliamentary faction and 12 from individual MPs.
SDE Deputy Chair Riina Sikkut said the state budget as planned will bring more social problems and injustice to society, adding the government's tax decisions reward well-off, high-income earners. SDE has proposed raising the subsistence minimum from the current €200 to €300, and allocating €30 million to alleviate the crisis in special care services.
SDE also wants to double hobby education support, boost school meal support from €1 to €1.50 per child, and, similar to Center, raise the allowance for the first and second child from €80 to €100.
Kindergarten and cultural workers' pay was also on their agenda.
"Kindergarten teachers deserve a pay rise similar to that of schoolteachers, which is why four million euros should be directed to their salary support. The salary issue of the ERSO orchestra musicians also needs to be resolved," said Sikkut in a press release.
The party also called for promoting regional development by allocating €20 million for paving local roads, hiking the local government equalization fund by €14 million, providing €10 million to mitigate damage done by the recent African Swine Fever epidemic, plus €1.5 million for the sparsely populated area program and €1 million to be spent on bus lines.
Isamaa came up with 10 amendment proposals.
"Isamaa's alternative proposal foresees that we must make an effort so that in the coming years the budget deficit is not 4.5 percent but three percent," party leader Urmas Reinsalu said.
Reinsalu stressed that the government has not considered how the budget would again fit within the limits once the defense spending exemption clause expires; the party unveiled its alternative state budget proposal on Wednesday. Speaking at a press conference, Reinsalu highlighted the budget council's criticism of the 2026 state budget in its current form.
As sources of funding for its plans, Isamaa proposes abandoning the idea of eliminating the income tax "hump," referring to bracket creep, and suspending payments to the second pension pillar. "Election promises cannot be fulfilled with borrowed money," Reinsalu said.
Isamaa says the tax burden must not increase further, while any tax cuts should have a targeted strategic goal, primarily to curb inflation and rising prices. Reinsalu also said that July's VAT increase should be reversed.
Isamaa would temporarily reduce VAT on basic food products. The party further wishes to introduce income tax exemption starting from the first child.
The deadline for submitting amendments is 5:15 p.m. Wednesday, ahead of the bill's second Riigikogu reading.
Reform MPs also submit amendments
As well as the opposition's 39 amendments, two Reform Party MPs, Aivar Sõerd and Mart Võrklaev, submitted their own amendments to the state budget bill ahead of Wednesday's deadline, both focused on re-routing the €14 million allocated to the Ministry of Climate's budget.
Võrklaev, a former finance minister, called for cutting the budget for other subsidies in the marine and water program by €9 million and redirecting that money toward reducing state expenditures.
"The purpose of the amendment proposal is to cut expenditures from a program that has previously supported and plans to support companies related to passenger shipping, primarily AS Tallink Grupp and its affiliated companies," he noted, adding that this type of support was left over from the Covid era.
Sõerd, also a former finance minister and current Riigikogu Finance Committee member, proposed reallocating €5 million from funds earmarked for growth in green reform and environmental awareness spending, to the field of competitiveness development, which falls under the remits of the Ministry of Justice and the Ministry of Digital Affairs.
"A competitive business environment is a decisive factor in putting the economy back on a growth path. The aim of the amendment proposal is to direct more money into the area of a competitive business environment," Sõerd said.
The Riigikogu's Finance Committee is to discuss the amendment proposals on Thursday afternoon.
Substantive amendments can only be made between the first and second readings. Only cosmetic changes such as fixing typos can be done between the second and third (and final) reading, aimed for mid-December ahead of the Riigikogu going on its winter recess.
Editor's note: This piece was updated to include information on the Reform Party MPs' amendments.
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Editor: Andrew Whyte, Barbara Oja
