Minister: Cut in officials' pay rise to allow Estonia to save EUR 21.3 mln

2023-09-25
BNS/TBT Staff

TALLINN – Finance Minister Mart Vorklaev on Monday described slowing down salary increases for senior officials as one of the measures that will enable more cost-effective operation of the Estonian state over the next four years, allowing to save an amount of over 21.3 million euros.

"Together, we are taking steps towards improving the state of public finances, and the state's own contribution is very important in this. The salaries of senior civil servants will continue to rise, but in today's overall financial situation, we have agreed that they will rise by half as much as originally planned," the minister said in a press release.

For example, the salary of a minister now is 7,070 euros. Under the current arrangement it would have increased by 11 percent to 7,848 euros in 2024, but it will increase instead by 5.5 percent to 7,459 euros, which is still a respectable figure, the Reform Party minister noted.

Under the bill that the ministry is about to put before the government later this week, the increase in the salary of the prime minister, ministers, members of the Supreme Court, the prosecutor general, the head of the Government Office, judges, the public conciliator and the commissioner for gender equality and equal treatment will be reduced so that it constitutes half of the increase calculated according to the previous methodology for the four-year period. The draft is related to the 2024 state budget and the multiannual budget strategy.

The cut will not apply to MPs, the president, the chief justice of the Supreme Court, the auditor general, the chancellor of justice and members of the supervisory board of the central bank, whose salary increases will continue to be calculated according to the original index.

The legislative amendment will enter into force on March 15, 2024 and be valid until March 31, 2028, when the previous procedure for calculating salaries will be restored.

The pay of senior civil servants is indexed by April 1 each calendar year with an index the value of which is dependent 20 percent on the annual increase in the consumer price index and 80 percent on the annual increase in the receipt of the pension insurance part of social tax.