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State Budget Strategy 2020-2023 and Stability Programme 2019

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STATE BUDGET STRATEGY 2020– 2023 AND STABILITY PROGRAMME May 2019 1 Table of Contents Table of Contents 21. PRIORITIES OF THE GOVERNMENT OF THE REPUBLIC 10 2. OBJECTIVES OF PERFORMANCE AREAS 16 2.1 National security and defence 17 2.1.1. Military defence programme 21 2.1.2. Programme for developing defence policy and supporting activities 23 2.1.3. Collective defence programme 24 2.1.4. Intelligence and early warning programme 25 2.2. Foreign policy 25 2.2.1. Foreign policy programme 28 2.2.2. Development cooperation and humanitarian aid programme 30 2.3. Internal security 31 2.3.1. Internal security programme 33 2.4. Public administration 34 2.4.1. Programme for supporting the Government of the Republic and the prime minister 36 2.4.2. Public finance programme 37 2.4.3. Administrative policy programme 38 2.4.4. Regional policy programme 40 2.4.5. Financial policy programme 41 2.4.6. Civil society programme 42 2.4.7. Archiving programme 43 2.5. Legal order 44 2.5.1.Reliable and effective judicial area 48 2.6. Agriculture and fishing 49 2.6.1. Agriculture, food and rural life programme 51 2.6.2. Fishery programme 52 2.7. Health 54 2.7.1. Environmental health programme 56 2.7.2. Health risk programme 57 2.7.3. Health care system programme 60 2.8. Social protection 62 2.8.1. Social security programme 64 2.8.2. Welfare programme 66 2.8.3. Gender equality programme 68 2.9. Education 69 2.9.1. Digital Focus programme 72 2.9.2. Programme on better connection between labour market and studies 72 2.9.3. School network programme 73 2.9.4. General education programme 74 2.9.5. Vocational education programme 76 2.9.6. Higher education programme 77 2.9.7. Adult learning programme 78 2.9.8. Youth programme 79 2.10. Research 80 2.10.1. Estonian Research, Development and Innovation programme 82 2.11. Culture 83 2.11.1 Culture programme 86 2.12. Sports 89 2.12.1. Sports programme 90 2.13. Integration 92 2.13.1. Integration programme 93 2.14. Family policy 95 2.14.1. Programme for children and families 97 3.15. Estonian language and identity 99 2.15.1. Language programme 101 2.16. Enterprise and innovation 102 2.16.1. Competitive business environment programme 104 2.16.2. Construction programme 106 2.17. Labour market 107 3 2.17.1. Labour market programme 108 2.18. Information society 110 2.18.1. E-government development and telecommunications programme 112 2.18.2. Cybersecurity programme 114 2.19. Transport 115 2.19.1. Transport programme 117 2.20. Energy 119 2.20.1. Energy programme 121 2.21. Environment 122 2.21.1 The environmental protection and use programme 124 3. FISCAL FRAMEWORK 125 APPENDICES 158 Introduction Essence of State Budget Strategy The objective of the State Budget Strategy is to ensure fiscal sustainability and to enhance the effectiveness of the government in steering national and sectoral policies. The State Budget Strategy ensures compliance between the state’s needs in sectoral policies and its financial opportunities resulting from forecasts. The first document to serve as a budget strategy was drawn up in 2000. According to the State Budget Act, the budget strategy must be approved by the Government of the Republic no later than eight months before the beginning of the next budgetary year. In the year of the regular elections to the Riigikogu, the Government of the Republic must approve the budget strategy no later than seven months before the beginning of the next budgetary year. The current State Budget Strategy is updated each spring by specifying the plans for the next three years and supplementing the plan for at least one year. This will ensure that medium- term plans are constantly adjusted to changes in the economy, fiscal environment and sectoral operating environment. The budget strategy includes the main directions of the state’s fiscal policy for the next four years, a forecast of economic development, priorities of the Government of the Republic, situation analysis of performance areas, targets with indicators, main policy changes, and a funding plan for line ministries. Implementation and updating of State Budget Strategy The State Budget Strategy is implemented via the implementation and action plans of sectoral development plans and via the state budget. For drafting the state budget, constitutional agencies, the Government Office and ministries submit draft budgets to the Ministry of Finance for the following year, i.e. action plans and financial plans for the first year of the development plans. In the year of the regular elections to the Riigikogu, the Government of the Republic will approve the draft state budget no later than seven months before the beginning of the next budgetary year. The Government of the Republic may continue with the draft state budget discussions after the economic forecast of the summer is published. The Government of the Republic will submit the draft state budget together with explanatory memorandum to the Riigikogu not later than three months before the beginning of the budgetary year. The Riigikogu will pass a state budget as an Act. Each year, ministries add another year to their development documents aimed at the achievement of the Government’s objectives, thereby ensuring a four-year outlook in strategic planning. The supplements are based on the current State Budget Strategy. As a rule, development plans are submitted to the Ministry of Finance no later than by 1 March. State Budget Strategy and monitoring thereof Over the course of the current financial year, regular overviews of the state’s financial situation are compiled. Monthly overviews of accrual of revenue, the use of budgetary instruments, changes in liquid assets, the budgetary position and the situation in the economy and the general government are prepared and published on the website of the Ministry of Finance. 5 At the end of each financial year, each governmental agency will prepare annual accounts and submit a report on the performance of action plans for that year to the Ministry of Finance. The State Shared Service Centre will prepare an overview of the state’s financial situation, financial performance and cash flows as well as the implementation of state budget. Based on those inputs, the Ministry of Finance prepares the annual accounts of the state, reflecting comprehensive information about the performance and resources of the general government. The Government of the Republic will approve the annual accounts of the state and submit those together with the audit report of the National Audit Office to the Riigikogu for approval. Preparation of State Budget Strategy 2020–2023 The State Budget Strategy 2020–2023 was prepared simultaneously and in substantive consistency with the preparation of the Government of the Republic Action Plan and the updating of the national competitiveness plan Estonia 2020 and the Stability Programme. The ministries presented their programmes for implementation of the objectives together with the financing plan to the Ministry of Finance on 30 April. The data received from the ministries was used as an input for preparing the economic forecast, the Stability Programme and the State Budget Strategy. As of 2020, the focus of the structure of the state budget is directed at the strategic objectives of performance areas, the budget is planned by programmes created to achieve those objectives. Budget-related strategic development documents contain a development plan and programme for the performance area. Cabinet meetings were held to discuss economic and fiscal policy objectives as well as budget priorities in May. The State Budget Strategy 2020-2023 was submitted to the Government of the Republic for approval on 30 May 2019. The document will also be introduced to the commissions of the Riigikogu. Inclusion of partners in preparation of the State Budget Strategy 2020–2023 The participation of partners in the preparation of development plans is organised by the responsible ministries. The inclusion of relevant interested persons and authorities and effective cooperation between sectors is unavoidable in order to achieve an integral perspective view and coordination of development documents. The Government has also provided the persons preparing the development plans with guidelines on good practice of inclusion. Structure of State Budget Strategy 2020–2023 This State Budget Strategy comprises three chapters. The first chapter describes in detail the priorities of the Government of the Republic, outlining the most important development activities to be implemented in the next four years. The second part includes a table of indicators and their target levels from the baseline to the next four years, as well as important activities by sectors for the next four years to achieve the objectives. The third part describes the economic and fiscal policy objectives and priorities of the Government of the Republic as well as the fiscal framework of the general government for the following four years, including the Stability Programme. Stability Programme The objective of the State Budget Strategy and Stability Programme is to express government policies in regard to fulfilment of requirements arising from the Stability and Growth Pact (SGP). The specific parts of the Stability Programme can be found in the fiscal framework chapter and Appendix 1 of this document. The submission and evaluation of Stability and Convergence Programmes is an integral part of the coordination and supervision of the economic policy of the European Semester. In regard to the European Semester, the Commission and the Council evaluate Stability and Convergence Programmes before making integral decisions regarding the preparation of next year’s budgets of Member States, so that policy recommendations could be given in regard to fiscal policy plans, if necessary.
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