Estonian opposition criticizes government tax decisions — ERR News

In Estonia, Riina Sikkut, deputy chair of the Social Democratic Party, said that abolishing the so-called tax hump in the income tax system became the main cause of state budget problems. As ERR News reports, she said the government covered nearly €800 million in the costs of this decision and the cancellation of a planned income tax increase through borrowing.

Sikkut believes that because of these decisions, the government has fewer opportunities to fund the needs of teachers, rescuers, healthcare workers and the specialized care sector. She called this approach unfair.

Deficit and Rail Baltica

According to the politician, the government tried to keep the budget deficit within 4% through accounting decisions: some expenditures were shifted to the current year, while other costs were postponed. Among such deferred expenses, she mentioned the construction of Rail Baltica.

Sikkut also said that the Social Democrats would not support the budget in exchange for individual decisions beneficial to the party. In her view, the problems cannot be fixed by amending individual budget items after the document has been considered by the Riigikogu.

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Care and public debt

Sikkut named healthcare financing, particularly specialized care, as one of the main risks. According to her, the Supreme Court found a two-year wait for specialized care for people with mental disorders unacceptable, but the new budget did not provide funding to resolve this problem.

The politician is convinced that the state budget will be reviewed after the Riigikogu elections scheduled for March. She also drew attention to Estonia's rising debt servicing costs: several years ago they amounted to €20–30 million, now they are €200–300 million, and in four years, in her estimate, they may exceed €600 million.

Sikkut stressed that borrowing may be justified for investments, but regular expenditures, including pensions and salaries, must be covered by regular budget revenues.