This presentation by Janne Kendla, Estonia, was made at the 10th Meeting of CESEE Senior Budget Officials held in Den Haag on 26-27 June 2014. Find more information at http://www.oecd.org/gov/budgeting/10thannualmeetingofseniorbudgetofficialsfromcentraleasternandsoutheasterneuropeanceseecountries.htm

1. Session 3c: Strategic
planning and the annual
budget. Estonian case
Janne Kendla
Head of State Budget Department
Ministry of Finance of Estonia

2. Budgeting practice
• MTEF in place
• State budget strategy, Government
programme and other main strategies
linked (and harmonised)
• Performance information –
presentational approach
• Sectoral approach

3. MTEF and annual budget
• Strategic planning, based on a medium-term budgeting
framework
• Fiscal framework for ministries
Stage 1- State Budget Strategy -
approved by the Government (Spring)
• Line-item cash-basis budgeting in practice (performance
information used in explanatory notes and in budget
negotiations)
• The budget law contains only appropriations for the budget
year
• Explanatory notes of the budget include also programs and
related annual estimates
Stage 2- Annual budget-approved by
the Parliament (Dec)

4. Changes
• New State Budget Act
• Step by step accrual budgeting
• Perfomance based budgeting (strategic
planning)
• Role of mid-term strategy and annual
budget

5. Performance based budgeting - changes
in strategic planning
Standardised system
Sectoral development plans
- All the policy areas are covered
- One in every policy area
- Goals, measures and activities
Implementation/ operational plans - input
to the budgeting

6. Conclusions
- Importance of mid-term strategy
- Whole of government approach
- Performance information and transparency
- Impact analysis – spending reviews

7. Thank You!

8. Conservative fiscal policy
• Sound fiscal management since transition -
preference of conservative fiscal policy.
• Mid-term budgetary objective “balanced or
in surplus” well rooted informally for a long
time.
• Rules in Constitution:
– Parliament can´t increase deficit
– Extraordinary elections if the budget has not
been approved by end of February
– Parliament can´t decrease expenditures, that
are prescribed by other laws

9. Legal basis
• Constitution
• State Budget Law
• Strategic planning decree
• State Budget Strategy = MTBF = the overall
strategy of the state
↓
• Annual State Budget Act = annual activity plan
of the government to achieve the targets set in
the strategy