The Ministry of Economic Affairs and Communications faces a 5 percent budget cut next year. However, the ministry does not plan to reduce staff positions or cut labor costs. Instead, the savings will primarily come at the expense of its subordinate agencies.

Minister of Economic Affairs and Industry Erkki Keldo (Reform) responded to a query from Riigikogu Finance Committee member Andrei Korobeinik (Center) regarding cuts to the Ministry of Economic Affairs and Communications (MKM). Keldo clarified that, as of now, there are no plans to lay off specific employees or reduce labor costs in the upcoming year.

“However, this year alone, three support staff positions have been eliminated and certain roles will remain unfilled to prepare for future budget cuts, including those impacting labor costs,” Keldo said.

The total amount of cuts within MKM’s administration is €7.74 million, with the largest single reduction affecting the Estonian Business and Innovation Agency (EIS), totaling €2.4 million. Of this amount, €1.2 million is a cut to activities aimed at boosting tourism demand and competitiveness, while the e-Residency program faces a reduction of over half a million euros.

Additional cuts include €1 million from the Estonian Stockpiling Agency, €3.3 million from research, development and innovation funding and €44,000 from the ministry’s operational costs and subsidies.

Other agencies within MKM’s purview will also experience cuts: the Technical Regulatory Authority and Consumer Protection Board will see a €386,000 reduction, the Land and Spatial Planning Board’s budget will shrink by nearly €599,000 and the Office of the Public Conciliator will face a €7,600 cut.

According to Keldo, savings in personnel expenses are partly due to a restructuring of support roles across administrative domains. Ten support positions are moving from the Ministry of Economic Affairs to the Ministry of Justice, while MKM will receive 2.5 support positions from the Ministry of Regional Affairs and Agriculture, reducing MKM’s support staff and budget by 7.5 positions. This change is expected to save around €400,000 annually, with the cost of a full-time position estimated at approximately €50,000.

As of early October, MKM has added a new role: a coordinator for data and artificial intelligence. This coordinator’s task is to identify processes, functions and workflows within the ministry and its agencies that could be automated or enhanced using AI.

Keldo emphasized that the planned cuts should not significantly impact the volume or quality of services; however, the services must be made more cost-effective.

Earlier in October, Finance Committee member Andrei Korobeinik requested information from all ministries regarding planned budget cuts to discuss in the committee. Some ministries responded with considerable delays, with MKM only sending its response last Friday, following ERR’s coverage of the issue.

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