OREANDA-NEWS. October 01, 2012. In submitting the budget for the coming year to the Riigikogu today, Prime Minister Andrus Ansip described the budget drafted by the government as optimistic, but planned with a sense of responsibility and considering the options open to the state. The budget emphasises the importance of raising families’ incomes and takes into account higher education reforms and needs-based study allowances.

According to the budget, the salary fund in the state sector will rise by 4.4% in 2013. “This will enable ministries to raise salaries where it’s needed most,” said the prime minister. “That includes teachers, health care workers, people working in the field of culture and those serving in the defence forces. Those involved in culture will see an average rise of 5%.”

The prime minister confirmed that family allowances would also increase next year, by almost 5 million euros or 5%. Much of this additional funding will be allocated to needs-based child benefit reforms, which are designed to double the support provided to children in the most needy families over the next two years. The childbirth allowance for triplets will increase more than three-fold, to 3000 euros. Paid paternal leave will also be reinstated.

“While pensions went up this year by 4.4%, next year the government is planning to raise them by 5%,” Ansip explained. “On average, that will mean 190 euros more per pensioner.” The unemployment benefit will also be raised, from its current rate to that of half the minimum salary – i.e. from 65 euros to 145 euros.

“More than anything else, our country’s future depends on how good the education is that our children receive,” the prime minister said. “We’re one of the top five countries in Europe in terms of how much we’re investing in education. And thanks to the contribution the state’s making and to the streamlining of resources in the sector, teachers’ salaries will be going up on average by 11%. Our most important reforms next year are indeed those we’re making in education.” Ansip says that the budget takes into account higher education reforms, including needs-based study allowances.

The prime minister also confirmed that the government would continue to invest 2% of gross domestic product in national defence.

Also being raised as part of the 2013 budget will be the resources of the Estonian Cultural Endowment, which will be used to finance projects in the field of culture. Compared to this year, the amount being directed towards such projects will increase by 5.2%. In order to ensure traffic safety and efficiency, the state will be investing around 160 million euros in roads, with 29.2 million euros set aside in the budget for the maintenance of local roads – 11.1 million euros more than was allocated to the same task this year. In terms of the environment, the emphasis in the 2013 budget is on investments in modern waterworks and clean drinking water, to the value of almost 100 million euros. In the field of agriculture the government will primarily be supporting efficient production: 24.3 million euros has been set aside for the payment of emergency and additional direct aid during the year.

Prime Minister Ansip underscored that Estonia’s finances are still in good order and that the state would continue to pursue the conservative budget policy which has so far proven so successful for the country so as to guarantee its ability to compete in rapidly changing economic conditions. “If we stick with this kind of policy, our economy will maintain its reputation for reliability,” he said. “And reliability is what brings direct foreign investment our way, what creates new jobs and what helps our economy grow.”

Revenue for the 2013 state budget is planned at 7.5 billion euros and expenditure at 7.7 billion euros. Compared to 2012, this represents a 1.1% increase in costs.