Draft law amending the Accounting Act and, as a consequence, amending other laws (516 SE) – first reading
Session: 15th Riigikogu, 4th session, plenary session
Date: 2024-10-22 15:03
Participating Politicians:
Total Speeches: 80
Membership: 15
Agenda Duration: 1h 26m
AI Summaries: 80/80 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The Riigikogu considered the second reading of bill 516, the Act amending the Accounting Act and, consequently, other Acts, initiated by the Government of the Republic. The purpose of the bill is to implement sustainability reporting and to specify its content and formal requirements in accordance with the European Union’s sustainability reporting directive, which is part of the European Commission’s Green Deal framework. The bill prohibits and/or restricts certain obligations for large enterprises and raises the thresholds for accounting obligations and audit control, but at the same time introduces clearer requirements for adherence to and standardization of reporting. The sustainability report will be part of the annual financial statements and will be published digitally; the aim is to align reports with European standards, allowing for a better overview of the environmental, social and governance impacts and risks of enterprises. The debate focused primarily on assessing the size of the administrative burden and costs and on how the regulation will affect the economy and competitiveness.
Decisions Made 1
The first reading has been concluded. The proposal by the Isamaa faction and the Conservative People's Party of Estonia faction to reject the first reading of the bill did not receive approval. The vote result: 22 members of the Riigikogu voted in favor, 22 members of the Riigikogu voted against (a total of 44 votes). Therefore, no direct rejection occurred; the first reading continues, and the deadline for submitting amendments is November 5th at 5:15 PM. The bill's proceedings will continue according to the protected agenda, and further discussion and consideration of amendments are expected in the second reading.
Most Active Speaker
The most active speaker was Evelin Poolamets (Isamaa faction), whose ID is a1RqRq2rgr4. She represents a right-wing/conservative viewpoint and her participation in the discussions on the bill was significant – she raised several questions and addressed the committee, drawing attention to various aspects ranging from administrative burden to the essence of substantive questions and coalition promises being consistent. Therefore, she can be described as a figure operating within a cooperative faction on the right, whose contribution to the debate was notably central.
Aseesimees Arvo Aller
AI Summary
Under the second item on the agenda, the first reading of Bill 516, initiated by the Government, concerning the amendment of the Accounting Act and the consequent amendment of other acts, will be discussed. The presentation will be given by Minister of Finance Jürgen Ligi.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi stated that the draft bill implements the Sustainability Reporting Directive within the framework of the Estonian Green Deal, establishing the obligation to prepare sustainability information, defining its content and formal requirements, and mandating auditing. Furthermore, it requires large undertakings, large groups, and companies listed on regulated markets (excluding micro-undertakings on the stock exchange) to submit reports in a digital, machine-readable format. However, it also allows for voluntary sustainability reporting and raises the audit and review thresholds for accounting obligations by 25% to reduce the administrative burden and ensure reliability.
Aseesimees Arvo Aller
AI Summary
Vice-Chairman Arvo Aller thanked the minister, noted that the audience had questions, and invited Evelin Poolamets to take the floor.
Evelin Poolamets
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Evelin Poolamets asks the minister how large the increase in administrative costs for businesses will be resulting from the legal amendment in question.
Rahandusminister Jürgen Ligi
AI Summary
The purpose of the annual reporting, which costs 40,000 euros, is to increase the credibility of high-turnover companies and establish a functioning standard. Furthermore, for Estonian exports, the existence of data proving sustainability is often essential, as without it, companies cannot access the European market.
Aseesimees Arvo Aller
AI Summary
Vice-Chairman Arvo Aller asks that Siim Pohlak be called upon to speak.
Siim Pohlak
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Siim Pohlak critically questions how the Reform Party can believe they can save the climate through legislation, while simultaneously arguing that the government is unable to influence the economy or electricity prices.
Rahandusminister Jürgen Ligi
AI Summary
He emphasized that this is a government initiative, not a partisan undertaking, which is based on the approval of the previous government coalition and international agreements, and that the government's influence on the economy and the environment must come primarily through regulations, not direct management.
Aseesimees Arvo Aller
AI Summary
Deputy Speaker Arvo Aller calls upon Kert Kingo.
Kert Kingo
AI Summary
Kert Kingo is asking why restraining devices, a vehicle forced-stopping device, and a technical barrier are being added to the list of special equipment used by the Customs Board's investigation department, and what the purpose of these items is.
Rahandusminister Jürgen Ligi
AI Summary
He said that this bill does not regulate it.
Aseesimees Arvo Aller
AI Summary
Deputy Speaker Arvo Aller invites Helle-Moonika Helme to speak.
Helle-Moonika Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Helle-Moonika Helme is asking what exactly qualifies as significant environmental and social impacts in the operations of an accounting entity. She stresses that adopting the directive could exclude many businesses from the European market, prompting her to question whether we truly have a market economy anymore.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi said that businesses must increasingly take natural laws into account, and although reporting is currently voluntary and standards make the reports comparable, these are not mandates, but a voluntary choice.
AI Summary
Rene Kokk asks whether the government is considering proposing to the European Commission that the sustainability reporting requirement be made voluntary, so that companies that want to can prepare the report and others don't have to.
Aseesimees Arvo Aller
AI Summary
Deputy Chairman Arvo Aller asked Rene Kokk to speak.
Rahandusminister Jürgen Ligi
AI Summary
The line between voluntary and mandatory requirements is being debated; the law standardizes reporting, making the reports comparable and interoperable, and businesses, including international corporate groups, have already done this voluntarily in the first round.
Urmas Reinsalu
Profiling Isamaa fraktsioonAI Summary
Urmas Reinsalu asks the minister how to calculate the consolidated cost of the sustainability report — does it consist of the annual preparation cost multiplied by the number of every company, and multiplied by the sustainability report auditing costs, and when this burden applies to companies, and how quickly the initial report must be prepared upon the law entering into force.
Aseesimees Arvo Aller
AI Summary
This address is simply a request aimed at Urmas Reinsalu.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi stated that the annual cost of 40,000 euros is small compared to the turnover and assets of the companies, as well as what is gained from the market. He added that although the environment is highly regulated and ethically stringent, the reporting criteria remain voluntary and creative. This, he noted, is a political choice made by the previous coalition under the leadership of Jüri Ratas.
Aseesimees Arvo Aller
AI Summary
Deputy Chairman Arvo Aller calls upon Rain Epler to speak.
Rain Epler
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Rain Epler highlighted that banks have reduced their emphasis on ESG, shifting their focus back to profitability, and asked, in the context of European competitiveness, whether the EU's supplementary reporting requirements could be made more flexible—specifically, by setting a standard but not making the submission of the report mandatory.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi stated that ESG is an international trend and a growing sense of responsibility. He noted that the main problem within regulations is management culture, while emphasizing the importance of European competitiveness, the necessity of using US quality labels in reporting, and Estonian banks serving as an example for implementing this culture.
Aseesimees Arvo Aller
AI Summary
Urmas Reinsalu asks the presiding officer a question.
Urmas Reinsalu
Profiling Isamaa fraktsioonAI Summary
Urmas Reinsalu posed a very specific computational question regarding the consolidated cost of sustainability reports: Is this cost calculated by multiplying the number of companies by the costs of preparing the annual sustainability report and the costs of auditing the sustainability report, and then adding a one-time initial cost for preparing the sustainability report mid-year? Furthermore, what is the size of this consolidated sum, and did the director understand the answer?
Aseesimees Arvo Aller
AI Summary
Arvo Aller noted that the table on page 44 of the explanatory memorandum shows about 40,000 euros per company and the costs of approximately 270 companies, and these numbers could be multiplied for all companies before he gives the floor to Anti Poolamets.
Anti Poolamets
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Anti Poolamets accuses the party he considers liberal of having undergone a complete metamorphosis and transformed into a harasser of businesses, following a Marxist program that demands politically correct representation for racial and sexual minorities in every company, and he questions how this would work in practice in Ida-Virumaa.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi stated that he did not want procedural wrangling or engaging in partisan labeling, emphasizing that the debate must have substance and that labels are unhelpful. However, he agreed that if reports are produced and function in the market, they should be standardized by law.
Aseesimees Arvo Aller
AI Summary
Vice-Chairman Arvo Aller calls upon Mart Helme to speak.
Mart Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Mart Helme accuses the governing party of being neo-Stalinist and claims that the submitted bill is an example of this. He also asks what kind of competence entrepreneurs must possess to provide environmental assessments and how this must be reflected in their accounting.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi emphasizes that the competence required of a Riigikogu member necessitates continuous improvement in management quality, achieved through training for accountants and entrepreneurs and the assistance of auditors. Furthermore, discussions should be clear and focused on specific questions, rather than being rambling conversations or talking at cross-purposes, a point he illustrated using the example of the 'domestic salt question'.
Aseesimees Arvo Aller
AI Summary
Mart Helme raised a question regarding the conduct of the session.
Mart Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Mart Helme said that instead of receiving a substantive answer, he was once again subjected to personal attacks. He recalled his time as minister and how members of the opposing party shouted, mainly asking if he was ashamed or if he would resign. He added that this is politics, and if someone doesn't understand that this is politics, they should leave politics.
Aseesimees Arvo Aller
AI Summary
Deputy Chairman Arvo Aller stated that the question submitted to the presiding officer had not been found, and requested that they move on and call Helle-Moonika Helme.
Helle-Moonika Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Helle-Moonika Helme criticizes ESG requirements and over-regulation, arguing that they could force companies to compile ideological accounting or shut their doors, thereby damaging the market economy, as consumers often buy cheap goods from platforms that do not meet these requirements.
Aseesimees Arvo Aller
AI Summary
The speech calls for action, saying that now is your time.
Helle-Moonika Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
All in all, the market always sets things straight.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi highlighted that the free market economy is no longer sufficient in today's civilized world, noting that the economy is influenced, in addition to prices and legislation, by the laws of society and nature, externalities, and the diverse criteria guiding consumer and corporate decisions.
Aseesimees Arvo Aller
AI Summary
Helle-Moonika Helme raised a procedural question.
Helle-Moonika Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Helle-Moonika Helme notes that the discussion is once again a trap where the questioner-and-answerer pattern repeats. She emphasizes the topic that originated from the minister's initiative and states that she does not wish to descend to that low level, but asks for confirmation that the minister started [the conversation] from the kitchen and she merely continued the subject.
Aseesimees Arvo Aller
AI Summary
Deputy Chairman Arvo Aller notes that for procedural questions, an introduction is provided, and the transcript accurately reflects how both the question and the response were initiated, including quotations from the questioner or the preceding introductory remarks.
Rahandusminister Jürgen Ligi
AI Summary
The Minister of Finance thanked them for the answer and simply said: "Thank you."
Aseesimees Arvo Aller
AI Summary
Deputy Chairman Arvo Aller tells Urmas Reinsalu, "Next question."
Urmas Reinsalu
Profiling Isamaa fraktsioonAI Summary
Urmas Reinsalu asks how the consolidated administrative burden cost for companies is to be determined following the entry into force of the new law, claiming that calculations show a total of approximately 36 million euros (2 million decreases, 34 million increases), and questions why the coalition is not fulfilling its promise to reduce existing bureaucracy by the same volume, and where the reduction of the existing administrative burden is.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi said that Estonia is a regulated economy, rejected utopian promises to cut down on regulations by replacing one with another, and noted that companies can choose their own goals and the cost of an audit is unpredictable.
Aseesimees Arvo Aller
AI Summary
Urmas Reinsalu asked the chairman of the session a question.
Urmas Reinsalu
Profiling Isamaa fraktsioonAI Summary
Urmas Reinsalu stated that he had posed a very specific question twice concerning the cost of the consolidated administrative burden on businesses, and since the minister did not see fit to answer it, he then asked the presiding officer of the session how the calculation of this burden should actually be performed (referencing page 44).
Aseesimees Arvo Aller
AI Summary
Deputy Chairman Arvo Aller noted that while a quick calculation might be partially justified, the minister stated that he currently did not have the specific table available, and that officials have been working on it and can provide the figure during negotiations or later, as the total sums certainly exist within the ministry.
Evelin Poolamets
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
This draft bill mandates that companies assess social impacts, compile a report on them, and have that report audited. It requires focusing on sustainability aspects such as gender equality, equal treatment, and measures for preventing workplace harassment, and further requires explaining how these aspects are assessed and audited, while taking into account the needs of both the businesses and the monitoring bodies.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi said that the draft bill sets standards for the reports, which will make them comparable and uniform, but it does not affect the substantive content itself; businesses will receive information about these reports, and auditors will receive training.
Aseesimees Arvo Aller
AI Summary
The Deputy Speaker calls on Anti Poolamets.
Anti Poolamets
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Anti Poolamets accuses the minister of incompetence and increasing the administrative burden on Estonian companies, claiming this stems from fulfilling leftist ideological demands. He calls for a vote of no confidence and stresses that the question concerning the representation of sexual and racial minorities was left unanswered.
Rahandusminister Jürgen Ligi
AI Summary
This draft legislation concerns the comparability of reporting standards, and ideological slogans are simply irrelevant, as companies will decide the implementation themselves. I am merely the one transposing these directives in the final phase. If someone wishes to exert ideological pressure, please direct those questions to Martin Helme. I am not criticizing him, and I do not know the precise details that previous governments left me with.
Aseesimees Arvo Aller
AI Summary
Deputy Chairman Arvo Aller concludes the round of questions and asks the session chair, Helle-Moonika Helme, to take the floor.
Helle-Moonika Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Helle-Moonika Helme notes that Jürgen Ligi is a Reform Party minister and representative, but his response, in which he promises to implement the policies of Martin Helme and EKRE, demonstrates a schizophrenic shift and raises questions about his competence.
Aseesimees Arvo Aller
AI Summary
Deputy Chairman Arvo Aller said he was unable to give such an assessment, and they must accept that the rapporteur is from the Reform Party and Martin Helme is from EKRE. Following this will be the report of the lead committee, with the overview provided by Jaak Aab, Chairman of the Economic Affairs Committee.
AI Summary
Jaak Aab announced that during its session on October 14, the Economic Affairs Committee discussed draft bill 516, which amends the Government's Accounting Act. The discussion centered on raising the thresholds for mandatory auditing, the impact of inflation, and matters concerning the adoption of the sustainability report and the corresponding EU directive. It was unanimously resolved to appoint the speaker (myself) as the representative of the lead committee, place the draft bill on the plenary session agenda for October 22, and conclude the first reading.
Aseesimees Arvo Aller
AI Summary
Deputy Speaker Arvo Aller opens the debate, gives the floor to Urmas Reinsalu from the Isamaa faction, and notes that Reinsalu has requested three minutes of additional time.
Urmas Reinsalu
Profiling Isamaa fraktsioonAI Summary
Urmas Reinsalu stated that the coalition's promises are false, and that this bill will increase the administrative burden on businesses by approximately 34–36 million euros, rather than reducing it, which is why he calls for its withdrawal and emphasizes the need to reduce bureaucracy during an economic downturn.
Aseesimees Arvo Aller
AI Summary
Evelin Poolamets is invited to speak next on behalf of the EKRE faction.
Evelin Poolamets
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Evelin Poolamets warned that sustainability reporting requirements will impose a significant additional burden and audit costs on small, medium, and large enterprises, increase bureaucracy, and may reduce competitiveness and resources available for core activities. While clarity regarding the legislation is necessary, the government emphasizes the member states' obligation to transpose the directive and present it as clearly as possible.
Aseesimees Arvo Aller
AI Summary
Vice-Chairman Arvo Aller asks if you would like additional time.
Evelin Poolamets
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
He asks for a minute.
Aseesimees Arvo Aller
AI Summary
Deputy Speaker Arvo Aller asks for three minutes to be added to the time.
Evelin Poolamets
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
The EKRE faction intends to reject the government-initiated draft amendment to the Accounting Act during the first reading. They argue that the unfavorable economic impacts will result in massive bureaucracy, and they cannot accept this.
Aseesimees Arvo Aller
AI Summary
Toomas Uibo is requested to speak on behalf of the Eesti 200 faction.
Toomas Uibo
Profiling Eesti 200 fraktsioonAI Summary
Toomas Uibo stated that although the legislative proposal has many positive elements, the 25% auditing requirement is too heavy a burden for Estonian companies and should be raised to at least 50%, because Estonia's indicators do not align with the Eurozone's inflation and the rise in the consumer price index, and the actual scope is greater than the current figures suggest.
Aseesimees Arvo Aller
AI Summary
Deputy Chairman Arvo Aller asks for three additional minutes.
Toomas Uibo
Profiling Eesti 200 fraktsioonAI Summary
Toomas Uibo said that the 5.5 percent figure affects about a thousand companies, and as a legislator, it is appropriate to ask why we are doing this, because the economy needs oxygen right now and it costs the state nothing. Therefore, between the two readings, we should find an agreement that supports businesses.
Aseesimees Arvo Aller
AI Summary
There are no further requests for speeches from the parties or factions, but the minister still wishes to speak.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi stated that the purpose of the draft legislation is to reduce bureaucracy and increase business transparency by exempting approximately one thousand companies from mandatory auditing and raising the auditing threshold by 25%. He added that this is in the interest of the state and the economy and should not be subject to partisan debate or misleading figures presented to the public.
Aseesimees Arvo Aller
AI Summary
Deputy Chairman Arvo Aller requested an additional three minutes for the meeting.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi emphasized that the burden is not insurmountable for companies, the quality mark reflects the actual scope, and the cost of reporting is significantly lower, offering the benefit of a clean conscience and improved export capability.
Aseesimees Arvo Aller
AI Summary
The Vice-Chairman concluded the debate and announced that Urmas Reinsalu had registered for a right of reply.
Urmas Reinsalu
Profiling Isamaa fraktsioonAI Summary
Urmas Reinsalu stresses that the draft legislation imposes a significant administrative burden and costs on businesses, while the government’s calculation, presented with one-euro precision, and the minister’s response remain unclear. Consequently, Parliament must reject the bill, given that the estimated annual cost of audit control at the European level is between 2.6 and 3.9 billion euros.
Aseesimees Arvo Aller
AI Summary
The Steering Committee proposes concluding the first reading of Bill No. 516, but the motion put forth by the Isamaa and EKRE factions to reject the bill must be put to a vote.
Helle-Moonika Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
He expresses his thanks and announces that preparations for the vote are commencing, but states that before the vote, he is calling a ten-minute recess on behalf of the EKRE faction.
Aseesimees Arvo Aller
AI Summary
This announcement calls for a ten-minute break.
Aseesimees Arvo Aller
AI Summary
Deputy Speaker Arvo Aller put to a vote the proposals by the Isamaa faction and the Conservative People's Party of Estonia faction to reject, at the first reading, Government Bill 516 concerning the amendment of the Accounting Act and the consequential amendment of other acts.
Aseesimees Arvo Aller
AI Summary
The motion failed to gain support (22 in favor, 44 against). The first reading is closed. The deadline for submitting amendments is 5:15 PM on November 5th of the current year, and with that, we have concluded the second item on today's agenda.