The Riigikogu has passed the state budget for the year 2014, with planned revenue of 8.02 billion euros and planned expenditure of 8.06 billion euros. The increase in state revenue is five percent, soon to reach all spheres of life. The budget was prepared conservatively, as indicated by the 0.7 percent structural surplus measuring the substantive coping with expenditure.
Estonia’s budget for the coming year is also acknowledged by the European Commission which assessed it to be fully compliant with the rules of the Stability and Growth Pact.
Nearly four billion euros will directly reach the people again as various benefits from the 2014 state budget. A large share of that is the state pension and the second pillar pension paid from social insurance tax. The first and the second pension pillars will grow by a total of 10 percent i.e. to 1.8 billion euros; this is 21.9 percent of the entire budget revenue.
The pension increase in the year 2014 will be nearly 6 percent; it is the largest increase in the past six years and means an average of 240 euros more paid to each pensioner per year. Moreover, it was decided to increase the basic exemption, leaving the average pension to be fully exempt from tax.
The state will direct 900 million euros into the health insurance scheme; this is 70.6 million euros more i.e. 8.5 percent more than in the year 2013. There are plans to use this money for increasing the funding of general medical aid, for significant expansion of the list of special medical services and for ensuring additional means for community care.
Estonia spends more than the EU average on education; nearly a tenth of the 2014 budget is education expenditure. In relation to increasing accessibility of non-chargeable higher education, the activity support for higher education will increase in the next year and the minimum wage for teachers will grow by 12 percent.
In addition to teachers, the social and cultural field can also expect a higher than average wage increase. The salary funds of other areas of governing will increase by 5.1 percent. Regardless of the country’s small size, the government’s salary expenditure remains near the EU average.
In comparison with other EU Member States, the Estonian government sector’s investment volume is at the top, although the volume will decrease by 8.9 percent in the coming year, i.e. down to 832 million euros. As recently as in 2012, Estonia made nearly a percent of GDP more investments than Poland did on the second position.
Tax expenditure in the 2014 budget is ca. 332 million. This includes additional tax-exempt income for pensioners and for families with two or more children, deduction of residence loan interests, and other.
Source: Estonian Ministry of Finance
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