28.09.2015, 16:44
Goverment of Estonia: Approved budget for 2016 contributes to security and growth
OREANDA-NEWS. The draft state budget for 2016 was approved at today’s extraordinary Government session. Tomorrow, the Prime Minister will present the draft budget to the Riigikogu. According to Prime Minister Taavi Rõivas, the state budget for 2016 will strengthen security, continue to ensure sound and responsible public finances and improve the livelihoods of people.
The Government priorities forming the basis for the budget include the increased security of Estonia, improved livelihood of families with children, improved livelihood of low-paid workers, higher economic growth, public administration and local governance reforms as well as preventing the marginalisation of border regions and preparations for Estonia’s Presidency of the European Union in 2018.
The national budget for the coming year is 8.9 billion euros – 4.2 percent, or 358 million euros more than the state budget for 2015. The Government aims to reach a structural surplus of 0.6% of GDP. The tax burden will remain at about the same level – 33%. The impact of labour taxes on the tax burden is expected to decrease next year by 0.66% of GDP.
The Government intends to increase the salary fund of teachers, cultural and social workers, police officers and other internal security professionals by 4%. Exact wage increases will be decided by the relevant ministries. Compared with this year, more pensions will be paid out and more will be contributed to health care. The total amount of state pensions will increase by 88.9 million euros. The average old-age pension for people with 44 years of employment will increase by 5.5%, or to 396 euros per month. Old-age pensions are exempt from income tax.
Next year, the government will allocate 51.8 million euros more to health insurance than this year. A total of nearly billion euros will be spent on health insurance. The additional funds will be used to ensure the availability of health services to insured persons at the present level and to perform the obligations under collective wage agreements with health care professionals.
National defence expenditure will continue to exceed 2% of GDP, reaching 2.07% according to the estimate made during the summer. Compared with this year, the national defence budget will increase by 37.1 million euros, or 9%. The two percent expenditure will be supplemented by the costs of ensuring the permanent presence of Allied troops in our region. The national defence budget of 451 million euros will ensure the development of defence capabilities and our ability to meet the challenges of the changed security situation. In 2016, we will continue to acquire new major weapons systems, such as infantry combat vehicles and anti-tank guided missile systems.
371 million euros are earmarked for strengthening internal security. Besides increasing the salaries of police officers and other internal security professionals, the priorities of 2016 include the completion of fortification works along Estonia’s eastern border with Russia (20 million euros), improving Estonia’s rapid response capability and upgrading the equipment used by the Police and Border Guard Board and Rescue Board. Moreover, the renovated Piusa border guard station and border crossing point Narva-2 will be put into service next year.
In order to improve the livelihood of families with children and to continue the development of an environment that is conducive to having children, family allowances will increase by a total of 16.1 million euros and parental benefits by 10.5 million euros. As of 1 January next year, child allowances for the first and second child will increase to 50 euros per month. The amount of allowance for the third and each subsequent child is 100 euros per month and that of foster care allowance is 240 euros per month. The amount of multiple birth allowance (starting from triplets) is 1,000 euros per child.
In order to improve the livelihood of low-paid workers and to retain them in employment, the Government will increase the tax-free income threshold from 154 to 170 euros per month, or from 1,848 to 2,040 euros per year. Low-paid workers will also have an opportunity to have reimbursed personal income tax paid during the year. The implementation of the work capacity reform in January 2016 will result in an extensive range of services targeted to people with reduced capacity for work and their potential employers.
Decreased labour taxes will ensure a more growth-friendly fiscal environment. The Government will continue its long-term contributions to the economy, in particular through giving priority to education. Therefore, teachers’ salaries will be increased next year. Growth is supported by decreasing the tax burden imposed on labour. The rate of social tax will also decrease. Maintaining a transparent fiscal system that includes very few exceptions and supporting it with efficient tax collection schemes will contribute to fair competition. 307 million euros – over 21 million euros more than last year – will be earmarked for the construction and renovation of roads.
In order to reform public administration and to prevent the marginalisation of border regions, it is the policy of the Government to ensure that employment in the public sector is proportional to the size of the working-age adult population. Next year, the number of people working in the government sector will decrease by 750. Reducing the number of officials will enable us to save a total of 13 million euros on general government expenditure.
The Government priorities forming the basis for the budget include the increased security of Estonia, improved livelihood of families with children, improved livelihood of low-paid workers, higher economic growth, public administration and local governance reforms as well as preventing the marginalisation of border regions and preparations for Estonia’s Presidency of the European Union in 2018.
The national budget for the coming year is 8.9 billion euros – 4.2 percent, or 358 million euros more than the state budget for 2015. The Government aims to reach a structural surplus of 0.6% of GDP. The tax burden will remain at about the same level – 33%. The impact of labour taxes on the tax burden is expected to decrease next year by 0.66% of GDP.
The Government intends to increase the salary fund of teachers, cultural and social workers, police officers and other internal security professionals by 4%. Exact wage increases will be decided by the relevant ministries. Compared with this year, more pensions will be paid out and more will be contributed to health care. The total amount of state pensions will increase by 88.9 million euros. The average old-age pension for people with 44 years of employment will increase by 5.5%, or to 396 euros per month. Old-age pensions are exempt from income tax.
Next year, the government will allocate 51.8 million euros more to health insurance than this year. A total of nearly billion euros will be spent on health insurance. The additional funds will be used to ensure the availability of health services to insured persons at the present level and to perform the obligations under collective wage agreements with health care professionals.
National defence expenditure will continue to exceed 2% of GDP, reaching 2.07% according to the estimate made during the summer. Compared with this year, the national defence budget will increase by 37.1 million euros, or 9%. The two percent expenditure will be supplemented by the costs of ensuring the permanent presence of Allied troops in our region. The national defence budget of 451 million euros will ensure the development of defence capabilities and our ability to meet the challenges of the changed security situation. In 2016, we will continue to acquire new major weapons systems, such as infantry combat vehicles and anti-tank guided missile systems.
371 million euros are earmarked for strengthening internal security. Besides increasing the salaries of police officers and other internal security professionals, the priorities of 2016 include the completion of fortification works along Estonia’s eastern border with Russia (20 million euros), improving Estonia’s rapid response capability and upgrading the equipment used by the Police and Border Guard Board and Rescue Board. Moreover, the renovated Piusa border guard station and border crossing point Narva-2 will be put into service next year.
In order to improve the livelihood of families with children and to continue the development of an environment that is conducive to having children, family allowances will increase by a total of 16.1 million euros and parental benefits by 10.5 million euros. As of 1 January next year, child allowances for the first and second child will increase to 50 euros per month. The amount of allowance for the third and each subsequent child is 100 euros per month and that of foster care allowance is 240 euros per month. The amount of multiple birth allowance (starting from triplets) is 1,000 euros per child.
In order to improve the livelihood of low-paid workers and to retain them in employment, the Government will increase the tax-free income threshold from 154 to 170 euros per month, or from 1,848 to 2,040 euros per year. Low-paid workers will also have an opportunity to have reimbursed personal income tax paid during the year. The implementation of the work capacity reform in January 2016 will result in an extensive range of services targeted to people with reduced capacity for work and their potential employers.
Decreased labour taxes will ensure a more growth-friendly fiscal environment. The Government will continue its long-term contributions to the economy, in particular through giving priority to education. Therefore, teachers’ salaries will be increased next year. Growth is supported by decreasing the tax burden imposed on labour. The rate of social tax will also decrease. Maintaining a transparent fiscal system that includes very few exceptions and supporting it with efficient tax collection schemes will contribute to fair competition. 307 million euros – over 21 million euros more than last year – will be earmarked for the construction and renovation of roads.
In order to reform public administration and to prevent the marginalisation of border regions, it is the policy of the Government to ensure that employment in the public sector is proportional to the size of the working-age adult population. Next year, the number of people working in the government sector will decrease by 750. Reducing the number of officials will enable us to save a total of 13 million euros on general government expenditure.
Комментарии