State finances
Session: 15th Estonian Parliament, 6th sitting, press briefing
Date: 2025-09-24 15:13
Participating Politicians:
Total Speeches: 43
Membership: 15
Agenda Duration: 29m
AI Summaries: 43/43 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
The Riigikogu information hour addressed Prime Minister Kristen Michal's answers on the topic of state finance, focusing on the budget deficit, the growth of national debt, and the fairness of tax policy. Riigikogu member Martin Helme (EKRE) accused the government of record national debt growth and breaking the promise to move towards budget balance, calling the government's handling of state finance "a drunken sailor in a brothel." Helme claimed that the economic recession was caused by the government's energy policy and tax hikes. Prime Minister Michal defended the government's fiscal policy, emphasizing that the budget has been made more frugal (referring to the structural surplus in the interim years) and that the government has agreed upon cuts totaling 1.4 billion euros. Michal also highlighted the abolition of the progressive income tax starting in 2026, which will leave 780 million euros in tax reductions in the hands of the economy and the people, essentially giving the average wage earner a 13th salary. Varro Vooglaid (EKRE) continued the criticism regarding the breach of the promise to move towards state budget balance and the increase in interest expenses.
Lauri Läänemets (SDE) focused on the social fairness of tax policy, accusing the Prime Minister of lying before parliament regarding the effect of the tax hump. Läänemets claimed that the government's changes direct 114 million euros to support the wealthiest 10% of people, while lower-income individuals receive minimal relief. Michal rejected the accusation of lying, explaining that only the effect of the tax hump was discussed last week, and defended the abolition of the progressive income tax as a measure to support the middle class. Helir-Valdor Seeder (Isamaa), in addition to financial issues, also raised the topic of ETS2 and inquired about the government's financial disarray, referring to the ministries' lack of clarity regarding the use of funds. Michal confirmed that Estonia's position regarding ETS2 is postponement and cancellation, and defended the ministries' actions, noting that investments are being reallocated (e.g., into roads).
Decisions Made 1
No decisions were made
Most Active Speaker
Martin Helme (right) was especially active and critical during the debate, accusing the government of ruining the country's finances and breaking its promises. Prime Minister Kristen Michal was also active, defending the government's decisions and repeatedly countering the opposition's attacks.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar announced that the second item on the agenda is a question addressed to Prime Minister Kristen Michal, which will be posed by Riigikogu Member Martin Helme and concerns the state's finances.
Esimees Lauri Hussar
AI Summary
Speaker Lauri Hussar announces that we will proceed, and Martin Helme poses his second question to Prime Minister Kristen Michal regarding public finances.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme accuses the government of using Soviet-era propaganda and statistical sleight of hand to conceal Estonia's longest economic recession, which worsened during the Reform Party's time in power. He also calls into question the party's self-narrative as experts in state finance, pointing to the unprecedented growth in state debt and the budget deficit, and ridiculing the government's claims that the country is "in safe hands and well protected."
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme is accusing the Reform Party government of mismanaging the economy and public finances, claiming that Estonia has suffered a deep recession and rapid state debt growth in recent years, and he questions how the promised 4.5% deficit and 2 billion in additional borrowing are supposed to fix the nation's finances.
Peaminister Kristen Michal
AI Summary
Prime Minister Kristen Michal defended the government's budget consolidation strategy, highlighting that state finances have improved following the large deficits left by the previous coalition (EKREIKE). She emphasized that budget balance is being achieved primarily through cutting costs (a total of nearly 1.4 billion euros) in order to create a more efficient Estonian state with a lower tax burden, preferring this approach over raising revenues.
Esimees Lauri Hussar
AI Summary
Speaker Lauri Hussar offers his thanks and addresses the Prime Minister with a request.
Peaminister Kristen Michal
AI Summary
Prime Minister Kristen Michal emphasizes that the Estonian budget has become more fiscally prudent in recent years and is currently in a structural surplus. Cuts totaling approximately 1.4 billion have been agreed upon, which involve a 5% reduction this year, followed by 3% and 2% in subsequent years. This is complemented by an additional 20 million and further supplementary cuts planned for 2027. The ultimate objective is to rein in expenditures and enhance the state's efficiency without increasing the tax burden.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar thanked [the previous speaker/assembly] and called upon Martin Helme to pose a clarifying question.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar thanked [the previous speaker/participants] and immediately gave the floor to Martin Helme to ask a clarifying question.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme is accusing the Reform Party of the severe mismanagement of state finances, claiming that their budget and economic policies have increased the national debt and deficit, causing an economic slowdown and hardship for Estonian businesses, ultimately leading the country toward bankruptcy.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme sharply criticizes the government's fiscal policy, accusing them of completely disregarding the Reform Party's election promises regarding balancing income and expenditure, and blaming them for a record increase in spending that has sent the economy into a tailspin and killed Estonian entrepreneurship. He presents detailed figures showing a massive surge in state debt and actual budget deficit execution that far exceeded forecasts for 2022–2024. He compared the government's management of state finances to "a drunken sailor in a brothel," and asked what they had left to do besides pointing the finger at everyone else.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar gave the next speaker a brief and clear cue that their speaking time was now due.
Martin Helme
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Martin Helme delivered a scathing assessment, claiming that national defense has been neglected, the birth rate has been utterly ruined, and fiscal policy is leading the country straight to bankruptcy.
Esimees Lauri Hussar
AI Summary
He thanks Mr. Prime Minister and presents a request.
Peaminister Kristen Michal
AI Summary
Prime Minister Kristen Michal said the government will reduce the budget deficit in the coming years through spending cuts, the postponement of investments, and unprecedented tax relief. This includes abolishing the progressive income tax and halting the planned income tax increase, which will result in the average wage earner receiving about 1,800 euros more next year.
Peaminister Kristen Michal
AI Summary
Prime Minister Kristen Michal is defending the government’s budget policy, promising to gradually reduce the deficit through cuts and savings. He highlighted previous large shortfalls but emphasized, above all, the largest tax cut in history. This measure will leave 780 million euros available to the economy and abolish the progressive income tax, resulting in the average wage earner having approximately 1,800 euros more next year. This is expected to improve the situation for both individuals and the economy.
Esimees Lauri Hussar
AI Summary
The Chairman thanks [the previous speaker/the assembly] and announces that Varro Vooglaid will ask a supplementary question.
Varro Vooglaid
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Varro Vooglaid accuses the government of doing the exact opposite regarding two fundamental election promises—avoiding tax hikes and moving toward a balanced state budget. He emphasizes that the budget is moving away from balance, not toward it, and that citing new circumstances as an excuse is unwarranted. Furthermore, he demands clarification on how the government explains this to the voters, and he asks for the disclosure of the annual interest payments on the borrowed 2 billion euros, as well as what the total interest costs will be by 2030 if borrowing continues at the current pace.
Varro Vooglaid
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Varro Vooglaid claims that the coalition is not moving towards balancing the state budget and is acting in direct opposition to its promises regarding not raising taxes and achieving fiscal balance. He asks the public and us what the annual interest payment on the 2 billion loan is and how large the interest expense will be by 2030 if borrowing continues.
Peaminister Kristen Michal
AI Summary
Prime Minister Kristen Michal is defending the government's budget policy, refuting claims that there is no movement toward fiscal balance by highlighting a structural surplus and a reduced budget deficit. He stressed that significant political choices have been made that cannot be overlooked, such as €780 million in tax cuts, which leave more money in the hands of the public and the economy, and raising defense spending to 5% of GDP, noting that these are facts and a political choice, even if critics dislike them.
Peaminister Kristen Michal
AI Summary
Prime Minister Kristen Michal stated that the budget shows improvement: the structural surplus is larger, and the deficits stand at 1.5% last year and 1% this year (not 3%). Simultaneously, defense spending is being increased and taxes are being lowered, meaning that by 2026, a person earning the average wage will receive about 1,800 euros more, and there will be no income tax hike.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar thanks the audience and announces that the consideration of the second question for today has been concluded.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar proceeded to the third item on the agenda, the topic of which is public finances, and which Riigikogu member Lauri Läänemets will present for Prime Minister Kristen Michal to answer.
Esimees Lauri Hussar
AI Summary
The Chairman announces that they are moving on to the third question, which will be answered by Prime Minister Kristen Michal. The question will be posed by Riigikogu member Lauri Läänemets, and the topic is public finances.
Lauri Läänemets
Profiling Sotsiaaldemokraatliku Erakonna fraktsioonAI Summary
Lauri Läänemets accuses the minister of lying to parliament about the impact of the tax changes, claiming that the actual distribution channels the money to the wealthiest (up to 2,000 euros annually). He further asserts that approximately 114 million euros are being directed toward the incomes of the richest 10%, while a person earning 1,000 euros receives only 121 euros in additional income, and someone earning 1,400 euros receives 505 euros. Because of this, he asks why this decision was made and why they are failing to support those who are genuinely struggling to make ends meet.
Lauri Läänemets
Profiling Sotsiaaldemokraatliku Erakonna fraktsioonAI Summary
Lauri Läänemets is accusing the Prime Minister of lying to parliament regarding the true impact of the tax changes. Citing a fact-check, he points out that the reform allocates disproportionately large sums (up to 2,000 euros annually) to the wealthiest individuals, while those with lower incomes and those struggling to make ends meet receive only negligible support. He labeled this €114 million expenditure as irrational and unfair.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar thanks and addresses the Prime Minister with a request.
Peaminister Kristen Michal
AI Summary
Prime Minister Kristen Michal explains that the tax hump, or progressive income tax, burdens the middle class, but it will be abolished starting January 1, 2026. This change will bring the average wage earner approximately 1800 euros in additional annual income (a 13th salary).
Peaminister Kristen Michal
AI Summary
Prime Minister Kristen Michal sharply criticizes the progressive income tax, or "tax hump" (maksuküür), created by the previous government, which, in his assessment, unfairly burdens the middle class, such as teachers and journalists. He confirms that despite the opposition's affection for this system, it will be abolished starting January 1, 2026, offering those earning the average wage a tax relief essentially equivalent to a 13th salary.
Esimees Lauri Hussar
AI Summary
The Chairman thanks the speaker and invites Lauri Läänemets to ask a clarifying question.
Lauri Läänemets
Profiling Sotsiaaldemokraatliku Erakonna fraktsioonAI Summary
Lauri Läänemets criticizes the worsening state budget, pointing out that 114 million euros of taxpayer money is being allocated to the salaries of Riigikogu members. Simultaneously, defense spending is increasing, while aid fails to reach those who need it most, leading him to question why the money is flowing into the hands of the wealthiest 10%.
Lauri Läänemets
Profiling Sotsiaaldemokraatliku Erakonna fraktsioonAI Summary
Lauri Läänemets sharply criticized the government’s budget policy, arguing that tax breaks are unfairly directed only at the wealthiest 10% (those earning €5,000–€6,000), while low-wage earners are ignored. He further contended that increasing defense spending alongside revenue reduction creates a populist and economically destructive budget. The resulting massive deficit and growing debt burden (with over €400 million in annual interest costs) will ultimately have to be paid for through service cuts or tax hikes, which will hit lower-income individuals the hardest.
Lauri Läänemets
Profiling Sotsiaaldemokraatliku Erakonna fraktsioonAI Summary
Lauri Läänemets declares that his time has come, and addresses a request to the Prime Minister.
Esimees Lauri Hussar
AI Summary
Chairman Lauri Hussar initially granted speaking time to Lauri Läänemets, but subsequently corrected the procedure, inviting the Prime Minister to speak instead.
Peaminister Kristen Michal
AI Summary
Prime Minister Kristen Michal championed the cause of a lower tax burden and demonstrated how the reduction in the tax rate next year will boost the net incomes of workers across various professions. He stated that these individuals should be better off financially, contrasting this approach with the opposition's desire to maintain a progressive income tax and increase taxes on the wealthy.
Peaminister Kristen Michal
AI Summary
Prime Minister Kristen Michal affirmed his unwavering commitment to reducing the tax burden, stressing that the drop in the tax burden next year (from 36.6% to 35.2%) will foster economic growth. He further presented concrete examples illustrating how the proposed tax amendments will substantially boost the net income of working families—specifically those on lower and average wages—by hundreds to thousands of euros annually. Consequently, he stated he fails to comprehend who the opposition, in advocating for a progressive income tax, is actually fighting against.
Esimees Lauri Hussar
AI Summary
The Chairman thanks the previous speaker and announces that the follow-up question will be posed by colleague Helir-Valdor Seeder.
Helir-Valdor Seeder
Profiling Isamaa fraktsioonAI Summary
Helir-Valdor Seeder first criticizes the government's silence regarding the proposal to abolish the ETS2 system, but then sharply pivots to focus on the state's financial disarray. He cites examples from the Ministries of Education, Social Affairs, and Defense, where the ministers themselves are unaware of how the money is being spent, and demands an explanation from the Prime Minister concerning this systemic financial confusion and the budgets that the Chancellor of Justice has deemed unconstitutional.
Helir-Valdor Seeder
Profiling Isamaa fraktsioonAI Summary
In this speech, Helir-Valdor Seeder criticizes the government's financial disarray and the lack of transparency in funding, citing the positions of the National Audit Office and the Chancellor of Justice, and emphasizes that even the Riigikogu (Parliament) does not know where the money is going.
Esimees Lauri Hussar
AI Summary
The Chairman thanked the Prime Minister and made a request to him.
Peaminister Kristen Michal
AI Summary
Prime Minister Kristen Michal confirmed Estonia's stance on postponing or canceling ETS2 and addressed the recommendations in Jaak Aaviksoo's report regarding the reassessment of public sector investments. He stressed the necessity of cutting back on construction projects initiated during "good times" and redirecting funds toward operational substance. He further specified that car tax revenue—with concessions provided for families with minor children—will be channeled into road infrastructure (totaling approximately 280 million over four years). He also confirmed salary increases for special care workers and other public sector groups.
Peaminister Kristen Michal
AI Summary
Prime Minister Kristen Michal confirmed the postponement and cancellation of ETS-2. He emphasized the necessity of reviewing investments in light of Jaak Aaviksoo’s report and pledged that future budgets would allocate a greater share of resources to road infrastructure, simultaneously reducing investments in other areas.
Esimees Lauri Hussar
AI Summary
The Chair gives thanks, concludes the consideration of today’s third item, and moves the session forward.