Ruling coalition in Latvia reaches political agreement on 2022 state budget

Four parties of the ruling coalition in Latvia together with Atis Zakatistovs’ Stability Group have reached a political agreement on the 2022 state budget, as confirmed by Latvian Prime Minister Krišjānis Kariņš.
He said in the next year’s budget it will be very important to promote both economic growth and residents’ welfare, as well as development specific sectors of industry.
On Friday, 24 September, the PM plans to call an extraordinary meeting of the government. During this meeting parties will discuss the next year’s state budget. At the meeting the Minister of Finance Jānis Reirs will report more about specific numbers, says Kariņš.
At the same time, he said next year it is planned to execute an increase of wages for people employed in the healthcare, education and interior affairs sector.
Wages will increase for doctors, teachers and police officers.
It is also planned to increase financing for research. In the healthcare sector it will be possible to expand accessibility of services, including cancer treatment.
At the same time, the coalition also agreed on a reduction of the labour tax burden.
This step is intended for residents with low wages. This means from 1 January 2022 the non-taxable minimum will be increased to EUR 350 and from 1 July 2022 – to EUR 500.
There are also plans to major investments for large businesses. Significant investments are planned for regional development, including road and municipal infrastructure, said the PM.
Kariņš thanked all partners for the constructive discussion during the entire talks procedure. «The process was complicated and, I believe, very fruitful,» he said.
Minister of Agriculture Kaspars Gerhards said at a press-conference after a meeting of the Cooperation Council until now the interior affairs sector did not receive enough finances. «It is clear this is a sector that is vital to ensure both public safety and our vision for the future. This is especially true when looking at the situation on Latvia’s eastern border,» said the politician.
At the same time, he said he is happy his colleagues agreed with Minister of Culture Nauris Puntulis’ proposals on increasing wages in the culture sector
and reduction of VAT for printed press and books.
Attīstībai/Par! Saeima faction chairman Juris Pūce stressed that the agreement reached by the coalition is good and that it meets all of his party’s budget priorities. Pūce mentioned defence and domestic security as sectors where it is planned to provide additional financing. Defence will receive financing worth more than 2% of GDP, said the head of AP faction.
The politician also mentioned allocation of more than EUR 40 million for the interior affairs system. This includes a major increase of wages for people employed in this sector. Pūce said it is planned to divert EUR 100 million towards healthcare. This money is planned to be used on wage increase, cancer plan implementation and other healthcare-related programmes.
Investments into regional development will continue. The state will also continue the loan programme for municipal investments, said the head of AP faction.
He said in the 2022 budget it is planned to increase the non-taxable minimum, which will serve as support for residents will low income.
The head of Saeima’s Stability Group Atis Zakatistovs said additional financing in the 2022 state budget may reach EUR 300 million. The exact amount will be clarified in the future.