First Reading of the Draft Legislation (736 SE) on the Amendment of the State Budget Act and the Act Amending the State Budget Act
Session: 15th Riigikogu, 6th Session, Plenary Sitting
Date: 2025-10-13 19:47
Participating Politicians:
Total Speeches: 52
Membership: 15
Agenda Duration: 49m
AI Summaries: 52/52 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
This agenda item concerned the first reading of Draft Act 736, initiated by the Government of the Republic, concerning the amendment of the State Budget Act and the Act amending the State Budget Act. Finance Minister Jürgen Ligi introduced the objectives of the draft act, which included the transposition of a European Union Council Directive to increase the state's short-term fiscal policy flexibility, as well as the improvement of the clarity and transparency of the state budget. A significant change is the integration of the activity-based and economic perspectives in the 2026 state budget, along with limiting the size of the government reserve to 3% of the volume of budget expenditures and investments. Furthermore, the grounds for granting and reclaiming domestic subsidies are specified. Regarding the financing of local governments, the distribution principles of the equalization fund and the support fund are being changed to increase financing flexibility and reduce bureaucracy. The debate focused on the increase in bureaucracy associated with the new rules and the question of how EU fiscal supervision affects the democratic decision-making process. Minister Ligi emphasized the importance of expertise and rationality in curbing political populism.
Decisions Made 2
The first reading of Bill 736 was concluded.
The deadline for submitting amendments was set for October 27th at 5:15 PM.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar announced that the session would now proceed to the fourth item on the agenda, which is the first reading of Draft Bill 736, initiated by the Government of the Republic, concerning amendments to the State Budget Act and related legislation. He then invited Minister of Finance Jürgen Ligi to the rostrum to deliver his report.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi introduced comprehensive amendments to the State Budget Basic Law, which transpose the updated framework for the European Union's fiscal surveillance into Estonian law. These amendments establish new structural deficit limits and the requirement for a budget structural plan. Furthermore, budget transparency is enhanced through the integration of the performance and economic perspectives, the conditions for granting and recovering state subsidies are specified, and local governments are granted greater flexibility in the use of support funds and case-by-case grants.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar thanked the esteemed minister, announced that he had at least one question to ask, and then requested Peeter Ernits to come to the podium to pose the question.
Peeter Ernits
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Peeter Ernits draws attention to the shortcomings of the reform's comparative material, questioning whether the page shaded gray concerning the 2026 data is a printing error, or if crucial operating costs and the budget figures for the Financial Intelligence Unit and the State Shared Service Centre were intentionally omitted from it.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi offered his thanks but refused to comment on the topic, while simultaneously requesting clarification as to which page the information in question was located on.
Peeter Ernits
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Peeter Ernits directed the listeners to the tenth page, noting that the topic under discussion was located right there.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi cleared up the confusion that had arisen while reviewing the document, explaining that the financial data being sought—such as interest and owner returns—are located in specific cells, not necessarily on the wrong page.
Peeter Ernits
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Peeter Ernits stressed with a short, surprised exclamation that the material being covered was extensive, saying: "A whole page!"
Rahandusminister Jürgen Ligi
AI Summary
Minister of Finance Jürgen Ligi briefly addressed issues concerning owners' income, also referencing the relevant annex to the law.
Peeter Ernits
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Peeter Ernits briefly stressed that the fundamental requirement is ultimately that the law must be correct and appropriate.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi clarified the data in the presented table, explaining that the blankness of the 2026 column is correct and intentional because the legal appendix that was valid in 2025 will be abolished. He did, however, find that this fact should have been clearly highlighted in the document.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar concluded his address with a brief thank you and subsequently gave the floor to Riina Sikkut.
Riina Sikkut
Profiling Sotsiaaldemokraatliku Erakonna fraktsioonAI Summary
Riina Sikkut is sharply criticizing the modified version of the domestic budgetary rule, which has become excessively long and bureaucratic. She questions why there is a need to create such an extensive administrative obligation and reporting system, especially in a situation where the rules are ostensibly being relaxed just to accommodate the government’s budgetary strategy.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi conceded that changes to budget rules inevitably lead to the expansion of bureaucracy, noting ironically that this road is usually paved with noble intentions, which is precisely the typical cause of bureaucratic growth.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar gave the floor to Rain Epler, calling him to the podium.
Rain Epler
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Rain Epler expresses concern regarding the new budgetary rules, which grant excessive control over national finances to the technocrats of the European Commission. He questions what role elections and the Riigikogu will play if Brussels pre-sets the rails for the state budget, making deviation impossible, thereby endangering the democratic process.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi expresses profound respect for financial expertise and scorns political arbitrariness, emphasizing that developed democracy relies on balancing mechanisms such as the separation of powers, the rule of law, and a free press, which are essential for curbing political populism and the abuse of power.
Esimees Lauri Hussar
AI Summary
The Chairman, Lauri Hussar, thanked the previous speaker and subsequently gave the floor to Peeter Ernits, asking him to present his second question.
Peeter Ernits
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Peeter Ernits sharply criticizes the reform of activity-based absurdities, using the metaphor of a crippled person whom dressing up will not make normal. He also questions whether such cosmetic reform makes any sense at all, or if it is simply being continued until the end of the current government's term in power.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi accused his opponent of stigmatizing people, calling them "wretches" and "abnormal," and explained that the activity-based budget is an international recommendation, the implementation of which was actually begun by the previous EKREIKE government, thereby highlighting the opposing side's political inconsistency and the binding lines in budget policy.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar thanked the previous speaker and then gave the floor to Rain Epler.
Rain Epler
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Rain Epler asks Jürgen to confirm whether he would genuinely prefer a stronger European Commission, one that would have intervened two years ago and prevented the current government coalition from making rushed tax and other decisions—decisions which are now gradually being reversed—despite the government having a strong mandate at the time.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi views the European Commission's role as curbing states with weaker discipline and populist tendencies. He emphasizes that Estonia has gone from being a former budget star student to a country running a chronic deficit, thanks to the changes in budget rules and the "tax hump" introduced by Jüri Ratas's coalition. Ligi supports sanctions against rule violators, preferring rationality over populism.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi gave the floor to Priit Sibul, inviting him to the rostrum.
Priit Sibul
Profiling Isamaa fraktsioonAI Summary
Priit Sibul expresses concern that the persistently large subsidies for Estonian Railways (Eesti Raudtee), amounting to around 45 million euros, are listed in the state budget strategy (RES) as a reserve rather than as planned expenditures. He asks the minister what the purpose of such concealment is, given that a recovery in rail transport is not anticipated.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi of the Ministry of Finance acknowledges that the railway infrastructure requires additional financing because current revenue is insufficient. However, the exact amount needed is unclear and will be determined over the course of the year. For this reason, the necessary funds are being held in reserve to avoid misleading the public with inaccurate figures, as he lacks the competence of a railway specialist to name the correct sum.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Chairman Toomas Kivimägi yielded the floor to Riina Sikkut, requesting that she begin her presentation.
Riina Sikkut
Profiling Sotsiaaldemokraatliku Erakonna fraktsioonAI Summary
Riina Sikkut addressed the minister, posing three specific questions requiring a simple yes or no answer, regarding the bill's impact on the easing of the domestic budgetary rule, the increase in bureaucracy, and the sustainability of state finances.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi responded to three questions, giving an affirmative answer to one of them. He explained that bureaucracy constitutes a necessary regulatory framework and stressed that while unavoidable national defense expenditures deteriorate the state's finances, this is a security policy decision that ultimately ensures, rather than diminishes, sustainability, even though this fact brings no pleasure to the Finance Minister.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi handed the floor over to Aivar Koka.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
Aivar Kokk questioned the minister regarding the experts responsible for the draft bill, asserting that the state budget must be significantly more transparent. He stressed that the budget should clearly delineate labor, economic, social, and investment expenditures, alongside revenues, ensuring its content is comprehensible to both members of the Riigikogu and the general public.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi sharply criticized the opposition party’s budget commentary, dismissing it as bought and biased expertise. He simultaneously stressed that making the budget structure rigid by strictly separating labor costs and operating expenses is unacceptable, arguing that ministries require flexibility, in line with international recommendations, both when implementing cuts and when addressing the serious public sector wage problem. This problem stems from salaries lagging behind the private sector, forcing ministries to reallocate operating expenses to cover wages.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi gave the floor to Priit Sibul, inviting him to the podium.
Priit Sibul
Profiling Isamaa fraktsioonAI Summary
Priit Sibul acknowledges the complexity of the situation, expresses skepticism about the government's plan to amend budget rules in order to take out loans and deliver on election promises, and demands a technical budgetary explanation from the Ministry of Finance regarding how moving unpredictable expenditures (around 150 million) into the reserve affects the deficit calculation.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi confirmed that reserves do not affect the deficit, but primarily focused his criticism on the fulfillment of poor election promises that have been financed by taking out loans and loosening the budget, stressing the need to correct the mistakes made by others, particularly in the area of taxation.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi invited Anti Allase to the podium.
Anti Allas
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Anti Allas requested an overview from the minister regarding how the ongoing draft legislation alters the regulations governing local municipalities, while also asking for clarification on the bill's most significant effects on these local governments.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi is introducing changes to the local government financing system. Under the new system, the distribution principles of the equalization fund will henceforth be determined in the state budget. Furthermore, the bases for allocating the support fund and permanent grants will be stipulated by area-specific laws and regulations. This simultaneously simplifies the responsible minister’s ability to provide local governments (LGUs) with case-by-case grants and requires a ministerial regulation concerning the financing of state tasks.
Aseesimees Toomas Kivimägi
AI Summary
Vice-Speaker Toomas Kivimägi gave the floor to Aivar Kokk so that he could ask his second question.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
Aivar Kokk highlights the issue of unfair budget flexibility, questioning why local governments are required to appear before the council for every single budget line amendment, while ministers are able to reallocate economic and personnel costs at their own discretion without the approval of the Riigikogu.
Rahandusminister Jürgen Ligi
AI Summary
Finance Minister Jürgen Ligi explains that the reallocation of the budget from economic expenditures to salary expenditures is a justified action in a challenging labor market, emphasizing that this should be done based on necessity, not discretion. He stressed that while this constitutes a general budget cut, certain sectors (the police, rescue workers, the Defense Forces, medicine, cultural workers, and special welfare) have exceptionally received an increase in their wage fund.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi concluded the question round with the minister, thanked him, and subsequently gave the floor to Maris Lauri, a member of the Finance Committee, to present the decisions reached by the lead committee.
Maris Lauri
Profiling Eesti Reformierakonna fraktsioonAI Summary
Maris Lauri provides an overview of the consensus decisions reached by the Finance Committee in preparation for the first reading of the draft bill, scheduled for October 13th. She emphasizes that the Estonian budget information system offers exceptionally high levels of detail and transparency in international comparison, which enables Riigikogu members to propose substantive amendments. She also notes that although budget rules and levels of detail were discussed, the activities and metrics of the programs require continued refinement and organization, which remains the responsibility of the ministries.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi concluded the previous discussion, noting that no questions had been asked, and subsequently opened the floor for debate, first giving the floor to Rain Epler, a member of the EKRE faction.
Rain Epler
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Rain Epler sharply criticizes the draft bill currently under discussion, which he assesses as detrimental to democracy because it grants the European Commission excessive control over national medium-term budgetary objectives, thereby excluding the Riigikogu from the decision-making process. Furthermore, he argues that it creates an opportunity for technocrats to use climate goals to neutralize the policies of ideologically unsuitable governments, which is why he is demanding the withdrawal of the bill.
Aseesimees Toomas Kivimägi
AI Summary
Vice-Speaker Toomas Kivimägi thanked the previous speaker and invited Aivar Kok to the podium on behalf of the Isamaa faction.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
Aivar Kokk criticized three budget-related draft bills, faulting the government for a lack of transparency in the allocation of large sums (such as SmartCap and the defense industry fund), noting that detailed explanations are missing. He also raised suspicions about a political ulterior motive behind the temporary shelving of the income tax increase, especially given that the overall tax burden has grown by nearly two billion euros. Finally, he highlighted the Isamaa party’s proposal to amend the State Budget Act to make the budget structure more readable and detailed for Riigikogu members (by presenting labor and management costs as separate programs).
Aseesimees Toomas Kivimägi
AI Summary
Deputy Chairman Toomas Kivimägi offered only an extremely brief affirmative response.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
Aivar Kokk sharply criticizes the opaqueness of the state budget and the excessive decision-making power of ministers in reallocating funds, demanding the detailed itemization of costs and subsidies for every legal entity and the revocation of the minister's right to alter budget limits. He cites, for example, the 2023 salary increase and an unexplained transaction amounting to 67 million euros, which is why the Isamaa Party is submitting amendments to the draft bill aimed at increasing transparency.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi thanked [the assembly/previous speaker] and then gave the floor to Maris Lauri to speak on behalf of the Estonian Reform Party faction.
Maris Lauri
Profiling Eesti Reformierakonna fraktsioonAI Summary
Maris Lauri criticized the positions taken by previous speakers, emphasizing the necessity of adhering to agreements related to the European Union and the euro, while simultaneously defending the imposition of restrictions on the use of EU funds. Furthermore, she strongly advised her colleagues to read the introductory section of the draft budget in order to understand the terminology and avoid incompetence, calling on everyone to do a more diligent job and to seek assistance from colleagues if necessary.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi closed the debate and announced that, upon the proposal of the lead committee, the first reading of Bill 736 had been concluded, setting the deadline for submitting amendments as 5:15 PM on October 27 of the current year, and thereby also concluding the proceedings on the fourth item on the agenda.