Standing income source needed for EUR 300 mln extra expense on child benefits

TALLINN – Estonian Prime Minister Kaja Kallas said in question time in the parliament on Wednesday that while no one is against increasing child benefits, additional recurring income must be found to cover the nearly 300 million euros in additional fixed expenditures per year.

"As this is an additional fixed cost, there are two options: either another fixed cost of the same amount is left out of the state budget, or additional taxes are collected to cover this additional fixed cost," the premier told lawmakers, replying to a question about the bill seeking to raise child benefits.

Kallas noted that an increase in child benefits could lead to an increase in births, but only in the short term.

She pointed out that there are numerus other concerns that need to be addressed with extra money, such as funding for higher education, long-term care and teachers' salaries.

Kallas said that the four parties that have joined the bill to amend the Family Benefits Act wish to do only the popular part of this equation. 

"It would be fair for you, and all the political parties that have come up with this idea, to do the unpopular part of the equation and say honestly what taxes will be raised to pay child benefits as high as this bill calls for," she said.

The prime minister said that we are currently in the midst of an energy crisis, a security crisis and, potentially, a food security crisis, and there is no need to have a government crisis on top of that. One possible solution, she said, is for the coalition partner, the Center Party, to step back  from the bill seeking a hike in child benefits and pursue a solution within the coalition, as is usually done in a coalition government.