Michal says government will curb pay growth for senior officials

Estonian Prime Minister Kristen Michal said the government had decided to reduce pay growth for senior state officials, ERR reported, describing the decision in an interview on the programme First Studio.

Michal said the measure would follow an earlier government decision. He noted that judges had already expressed dissatisfaction because they had expected their salaries to rise.

He said the pay gap between judges, members of parliament, ministers and committee chairs was already out of balance. Ministers earn less than committee chairs, despite differences in their responsibilities and, at times, workloads. Michal said the planned increase would be delayed or reduced.

On the budget, Michal said the government intended to carry out its planned spending cuts and reduce the deficit by 0.5 percentage points, as recommended by Eesti Pank and the Fiscal Council. He said the government had made cuts of 10 percent over the past three years, with pensions, teachers, defence capability and police as exceptions. If future governments also reduce the deficit by half a percentage point at a time, he said, debt growth would remain under control and the budget could eventually be balanced.

Michal said planned excise tax increases could be cancelled, as changes that benefit taxpayers are not subject to the six-month advance notice rule. Whether parliament would approve such a move would depend on fuel prices next spring, he said.

Senior state officials’ salaries are indexed. An amendment passed in 2023 temporarily halved their pay growth to save 20 million euros over four years. The previous arrangements were due to return in 2028.