A month ago, the Reform Party board proposed reducing next year's budget deficit to 4 percent of GDP. According to the Ministry of Finance, this would require cuts of roughly €400 million.

So far, the Reform Party has not presented concrete proposals on how to achieve this, and another coalition member, Estonia 200 has already said such large cuts are neither sensible nor realistic.

Former finance ministers Aivar Sõerd and Mart Võrklaev have now put forward several specific areas where the state could save money. If their ideas were combined, they say more than €100 million could be saved — though not immediately next year.

For now, the discussion focuses mainly on cuts — both MPs say little about increasing revenues, apart from reversing the remote‑gambling tax reduction championed by Estonia 200 MP Tanel Tein.

"I don't think we should introduce new major tax changes; I would focus on savings," one former finance minister said.

Tartu cultural centre could be postponed

Both MPs said the state should postpone construction of nationally important cultural buildings — the Tartu city‑centre cultural hub Siuru, the Tallinn film campus, and the Estonia opera house expansion.

Võrklaev noted that building Siuru is expected to cost around €100 million.

"In difficult times we can manage without these, and when times are good again, we can use the money and build," he said.

"These are all good and nice projects. But we are living on borrowed money, the debt is growing quickly and unsustainably, and we will have to repay loans taken now with loans carrying higher interest later," Sõerd said.

Tartu Mayor Urmas Klaas (Reform Party) said that the building process of Siuru has already begun and is not financed through loans, but through Cultural Endowment funds.

"Siuru is being built from actual gambling‑tax revenues, and the work is already under way: extensive archaeological excavations are taking place in Tartu. The work has begun, and it is extremely irresponsible to raise talk in some quiet Tallinn office about postponing Siuru," Klaas noted.

Wealthy municipalities should receive less income‑tax revenue

Võrklaev, a former Rae municipal mayor, also suggested that the state could direct a smaller share of income‑tax revenue to wealthier municipalities in the future. He said incomes are rising rapidly in affluent areas.

Municipalities receive a fixed percentage of residents' salaries. Because salaries in wealthy municipalities such as Tallinn are higher and rising faster, their budgets grow more quickly each year. Võrklaev said the system is unfair.

"Tallinn hands out free things and makes relatively populist decisions that other municipalities or the state cannot afford," he said.

He stressed that the plan is not to cut the budgets of Tallinn or other wealthy municipalities — their budgets would not shrink, but future growth would slow. Municipal budgets grow by around €100 million a year, most of which goes to wealthier municipalities.

"Whether to take a third or half — that needs serious calculation and discussion with municipalities. […] I think Tallinn alone could contribute more than €20 million," he said.

Tartu Mayor Klaas rejected the idea to reduce the share of income tax transferred to wealthier cities and municipalities.

"I must say this is yet another unprofessional proposal, which shows that the people making these suggestions should look more closely into the matters they are talking about," he said.

Klaas noted that Tartu already lost €17 million in revenue over four years due to the previous income‑reduction reform, commonly known as the Robin Hood reform — a very large sum for the city.

"Municipalities have very clear responsibilities in providing public services. We all see how much money, for example, the implementation of the care reform requires. So to talk about further reducing municipal revenues — I say this also as the vice‑chair of the board of the Association of Estonian Cities and Municipalities — it simply is not possible. It is not possible," Klaas stated.

Proposal: reduce public‑sector holidays

Both MPs said long‑term savings could also come from aligning public‑sector holiday length with the private sector — 28 calendar days.

Võrklaev said around 130,000 people in Estonia have 35‑day holidays, and they are not only ministry officials but also many employees of state‑owned companies.

He said that if some of these employees had shorter holidays, some positions could be eliminated.

"The same work could be done with fewer people," he said.

The idea of reducing holiday days was discussed two years ago when Võrklaev was still finance minister. At the time, the Chamber of Commerce and Industry proposed it, and initial ministry calculations showed savings of at least €50 million.

Jürgen Ligi, who later became finance minister, opposed the idea.

Paid university programs and higher doctor visit fees

The MPs also suggested that some currently free university programs could become fee‑based.

"If we want to continue offering high‑quality higher education, we should open a discussion about greater co‑payment for certain fields under certain conditions," Võrklaev said.

Sõerd said people should pay a higher fee for doctor visits.

"Starting with visit fees, there are places where co‑payment simply needs to increase. As of May, the Health Insurance Fund deficit was, if I recall correctly, €67 million. More than €100 million is planned for the year," Sõerd said.

Biggest savings: stop carrying unused funds forward each year

According to Sõerd and Võrklaev, the largest potential savings next year would come from reducing the amount of money ministries carry over from year to year.

ERR has reported that around €390 million earmarked specifically for last year remained unused.

Võrklaev explained that if a ministry plans €100 million for an activity but uses only €90 million, there is no reason to carry the remaining money forward. He said ministries tend to spend carried‑over funds on activities that were never planned.

 "If you look closely, around €100 million could be removed from the base budget by identifying activities that are not actually carried out but are allocated money every year. Then we can plan lower expenditures in the budget, and that immediately reduces the deficit," he said.

Õnne Pillak, chair of the Reform Party's parliamentary group said that final decisions will be made during the drafting of next year's state budget, and various proposals are part of the broader budget discussion.

This article has been updated on July 15 to include reactions from within the Reform Party.

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