Coalition agreement sets reforms

TALLINN - The coalition agreement that the Estonian Reform Party and Pro Patria and Res Publica Union concluded on March 23 promises to reform the special pensions system and focus more on free university education, reports National Broadcasting. Reform Party chairman Andrus Ansip said that the coalition’s action program aims to achieve a state budget surplus by 2014 at the latest and reduce labor taxes from 2013. Work-related training will not be subject to the special fringe tax anymore. Starting 2014, there will be a ceiling in place for the social tax and the plan is to reduce income tax to 20 percent from 2015, Ansip said.

The parties agreed on reforming the special pensions system and they wish to create a work-related accidents and vocational illnesses insurance system.
PRU chairman Mart Laar said that he is satisfied that the new coalition will contribute to the education, birth rate and well-being of the people. “PRU fulfills the agreement with voters: free university education, a mother’s pension and lower home costs are clear aims of the next government,” he said.

Laar said that the law that enables all capable young people to get a free university education will be approved during this year: the state order to public universities will be increased by 40 percent for 2012-2014, and free university studies will be guaranteed to 12,500 university entrees a year.

Also, the parties agreed to introduce a so-called mother’s pension from Jan. 1, 2013, promoting the value of raising children. The coalition will also consider a transition to a 6-9-12 month-long conscript service system and aims to increase the number of professional military personnel by 125 every year, to reach a total of 4,000.