The Estonian Cabinet has signed the 2014 state budget bill, with Prime Minister Andrus Ansip set to hand it over to Parliament tomorrow at 14:00.As reported when the Cabinet reached an agreement last Thursday, expenditure will grow 4.9 percent, to 8.06 billion euros, with allocations by area of governance increasing more or less across the board. Revenues will grow 4.3 percent, reaching 8 billion euros, reported uudised.err.ee.
Thanks to higher-than-expected tax receipts, tax revenue will increase 6.5 percent, while other revenues are set to decrease by 8.3 percent due to a lower level of external resources. Tax burden will decrease by 0.3 percent to 32.1 percent, the lowest in six years, and public sector debt will be at 10 percent of GDP at the end of next year.
The government has planned for a nominal deficit of 0.4 percent and at the same time a structural surplus - leaving out cyclical, one-off and temporary factors - of 0.7 percent. One reason for the nominal deficit was a one-time increase of Estonian Air's share capital.
The salary fund will rise in all areas of governance by 5.1 percent, leaving ministers to allocate resources on an as-needed basis. Some areas may receive more generous salary raises as a result of reforms. For instance, structural reforms will allow the teachers' minimum wage to be raised by at least 12 percent, from the present 715 euros to 800 euros per month.
Pensions will grow 5.8 percent, a monthly increase of 20 euros. The income tax free minimum will also rise for pensions, so that the average pension will be tax free. The Culture Ministry will see the quickest proportional rise in its budget, by 21 percent. Plans are in store to build a new auditorium for the Nukuteater (the puppet theater in Tallinn), to update the Vanemuine Theater's stage equipment and to renovate the Ugala Theater.
Other major cultural projects include the construction of the National Museum, due for completion by summer 2016. Estonian authors writing for certain cultural publications will see their honorariums rise by 40 percent.
The Foreign Ministry's priorities next year include opening an embassy in Brazil. Over half of planned state investments will be in the Interior Ministry's area of administration, including the construction of rescue and police departments.
The Defense Ministry's budget will remain at 2 percent of GDP, as recommended by NATO. Three new military barracks will be completed next year in Võru, Jõhvi and at the Ämari air base, respectively. A building at the naval based will also be renovated. The ministry will also arm, equip and man one rapid response infantry brigade, and develop a second one.