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Budget plans 'will wreck'

  • 2008-09-18
  • From wire reports
TALLINN - The government will cause misery to the vulnerable by cutting back on public services whilst at the same time it is raising tax, opposition leaders and Trade Unionist claimed.
Balancing the budget will raise the value-added tax on drugs, books and cultural events to 9 percent from 5 percent.

Despite this increase in revenue the government wants to trim the welfare state.
 Prime Minister Andrus Ansip recently compared child benefits to throwing money out of a plane.
"We pay benefits to each child of 300 kroons (19.1 euros) each month and we spend 700 million kroons per year that way. I'm convinced that the money doesn't help 20 percent of the children 's they need lot more than 300 kroons per month, but the taxpayers' possibilities are limited," Ansip said, answering questions from members of Parliament.

He concluded that the money is not necessary or helpful to 80 percent of the children.
"With social expenses we should look now, in my opinion,  how we can enlarge these sums at any cost, but primarily we should look how these expenses can be effective," said Ansip.
The statement drew criticism from the Union for Child Welfare, who said this attitude is very short-sighted and values only births, while raising a child also requires money.

"In countries where more children are born, this has been understood a long time ago. In the countries where families have all the responsibility and the country is subsidizing only the poor, like in Southern Europe, birth rate is the lowest," said Katrin Saks, president of the Union for Child Welfare.
Alar Tamm, chairman of the union, said that it is imperative to protect children in the cooling economic climate.
Meanwhile pensioners are still struggling with meager incomes.

"There are many pensioners who bring their valuables to pawn in order to buy their medicines. But they come and buy things back again. There are many SMS-loan takers who have interest and overdue charges," said Lidia Helm-Rosin, the manager of Starling Servis pawnshop to Aripaev.
Mai Treial, vice chairman of Rahvaliit and a member of Parliament, said the government was letting pensioners down.

"The minimal old-age pension   is 1,913 kroons a month, which certainly does not give any protection against poverty," said Treial.
Treial added that increased VAT will only make the situation worse as pensioners will have to spend more on food and other essentials. "[Whether the] pension is growing or not is shown by growth of buying power, not absolute growth," said Treial.
Treial said that Ansips' positions show clearly that he is not interested in the people.
Kalle Laanet, the chairman of Keskerakond's Center Party security committee, feels budget cuts were a threat to national security.

According to Laanet, the budget of the Ministry of Internal affairs decreased by 410 million kroons.
"The cut will bring about the laying off of 967 people who are guaranteeing internal security, of whom 424 are policemen, 184 are border guards and 296 are rescuers," said Laanet.