Interpellation concerning the rise in costs (No. 354)
Session: 15th Riigikogu, 3rd sitting, plenary session.
Date: 2024-01-08 18:33
Participating Politicians:
Total Speeches: 18
Membership: 15
Agenda Duration: 30m
AI Summaries: 18/18 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The agenda item concerned interpellation No. 354, submitted by Riigikogu member Aivar Kokk (pid: s_bVCA_wmFY), which addressed the rise in costs and the impact of tax packages on the regional and agricultural sectors, particularly local governments (KOV). Regional Minister Madis Kallas responded to the query. Kokk expressed deep concern over the cumulative impact of the tax hikes (VAT, fuel excises), which he estimated approaches half a billion euros, and highlighted that at least a third of local municipalities are in financial difficulties, seeking loan holidays and refinancing options. Furthermore, Kokk sharply criticized the activities of PRIA (Agricultural Registers and Information Board), which managed to pay out 600,000 euros in bonuses at the end of the year, while farmers’ subsidies remained unpaid on time.
Minister Kallas acknowledged that the 2% VAT increase affects the final prices of services and foodstuffs but stressed that the ministry is conducting continuous monitoring. He confirmed that the Ministry of Regional Affairs and Agriculture has submitted proposals to support local governments, focusing on alleviating regional inequality and assisting municipalities in need so they can secure their self-financing share for EU structural fund projects. Kallas emphasized the need to change the funding model for local governments so that it does not depend solely on the income tax of working-age residents, which has primarily shifted to the areas surrounding Tallinn and Tartu. Regarding the PRIA bonuses, the minister agreed that the timing was poor and that the bonuses should have been paid out only after all work tasks, especially those related to the payment of subsidies, had been fully completed.
Decisions Made 1
No official decisions were adopted, nor were any bills voted upon, during the response to the interpellation. This was purely an informative discussion between members of the government and the Riigikogu.
Most Active Speaker
The most active speaker was the submitter of the interpellation, Aivar Kokk (pid: s_bVCA_wmFY). He submitted the official query, added an oral question concerning PRIA premiums, posed a clarifying question to the minister, and concluded by giving a closing statement in the debate. Kokk represented the opposition (Isamaa party), and his stance was extremely critical of the government's tax policy. He stressed that the tax increases would push the Estonian economy into a deeper crisis, and criticized the government for conducting impact assessments retroactively, instead of before the laws were adopted. His primary concern focused on the financial stability of local governments and the negative effect of the government's decisions on regional development.
Aseesimees Toomas Kivimägi
AI Summary
The next item on the agenda is Riigikogu member Aivar Kokk's interpellation concerning the rise in costs (No. 354), submitted on May 13, 2023, and presented by Aivar Kokk.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
Aivar Kokk notes that although taxes are rising and the total sum is approaching half a million euros, the greater concern is the financial situation of local governments and the practice of paying out bonuses in state institutions, regarding which he is asking the minister for explanations and potential cost-saving measures.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi thanks the esteemed colleague and invites Minister Madis Kallas to the Riigikogu rostrum to answer the questions related to the colleague's interpellation.
Regionaalminister Madis Kallas
AI Summary
Regional Minister Madis Kallas confirmed that the 2% VAT increase will affect food prices, and this impact will be noticeable throughout the year. The ministry plans to address the funding and savings of affected local governments alongside measures to reduce regional inequality. Separately, they will analyze issues related to the payment of PRIA subsidies and the organization of bonuses, while also emphasizing the rising level of the minimum wage and the need to continue the critical review of costs.
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi thanks the minister, says he has a few questions, and then calls upon Anastassia Kovalenko-Kõlvart.
Anastassia Kovalenko-Kõlvart
Profiling Eesti Keskerakonna fraktsioonAI Summary
Anastassia Kovalenko-Kõlvart stated that the purpose of streamlining the income tax base is to redirect funds from larger municipalities to smaller ones, enabling them to invest or apply for European financing. She requested a report detailing how many municipalities have benefited and which ones received the additional funding, while also acknowledging that tax hikes could still take money directly out of citizens' pockets.
Regionaalminister Madis Kallas
AI Summary
He stated that 2.5% of pension revenue would be allocated to local authorities, and the income tax rate designated for them would be reduced proportionally, in order to ensure the funding of services and investments throughout Estonia. He also stressed that Estonia can only be strong if all local governments are capable of managing their affairs.
Aseesimees Toomas Kivimägi
AI Summary
Toomas Kivimägi invites Riina Solman to speak.
Riina Solman
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Riina Solman is criticizing the rigidity of the previous government’s regional policy schemes and the strict requirements for EU fund repayments. She questions why savings weren't achieved by foregoing the ministry’s move into the super-ministry complex or the construction of the environmental house, and she is demanding more flexible solutions regarding the equalization fund and the repayment of funds.
Aseesimees Toomas Kivimägi
AI Summary
He says it's time and turns to his colleague in a friendly manner.
Riina Solman
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Riina Solman describes a situation where people no longer dare to write new projects, and questions are being asked about the status of their savings plans.
Regionaalminister Madis Kallas
AI Summary
Regional Minister Madis Kallas said that the state has moved into the super-ministry building, plans are underway to invest in an environmental center that supports the timber sector, and to address the funding of local governments and European Union conditions in order to find a balance between state and local interests and reduce the damage caused by litigation.
Aseesimees Toomas Kivimägi
AI Summary
Deputy Speaker Toomas Kivimägi invites Aivar Kokk to speak.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
In summary, the speech notes that in Estonia, amalgamated municipalities often find themselves in a more difficult financial situation than those that did not have to undergo the merger.
Regionaalminister Madis Kallas
AI Summary
The main concern is not the merger itself, but the fact that local governments receive taxes primarily from the working-age population, and the working-age population is mainly moving to the Tallinn region. This causes a fundamental funding problem and requires changing the tax system so that life can be sustained across the whole of Estonia.
Aseesimees Toomas Kivimägi
AI Summary
He thanks the minister, states that there are no further questions, opens the debate, and addresses Aivar Kokk.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
Aivar Kokk emphasizes that before laws are adopted, their impact must be thoroughly analyzed, because tax increases and poor decisions made during mergers have plunged local government budgets into crisis and threaten the continued recovery of the Estonian economy.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas concluded the debate, and the interpellation has been answered.