Toomas Luman's Speech at the Opening of the Business Season 2024
Dear members and friends of the Chamber of Commerce, distinguished guests!
Welcome to the opening of another business season. I am pleased to greet you here today, at Miinisadam, the base of the Estonian Navy. Naturally, we extend our thanks to the defense forces for being willing to host us here.
By organizing the opening of the business season at locations related to national defense, we have deliberately set a goal to introduce our members to the work of the defense forces. This is especially important now, at a time when there is much discussion about national defense and defense capabilities. The more we know and see for ourselves, the more understandable the decisions made to enhance defense capabilities will be.
Today, the Rescue Board, the Police, and the Defense League are also present here. They all play an essential role in safeguarding our country and creating a sense of security. Without them, the state could not function, and it is inevitable that the funding of these functions is widely discussed. And it’s good that it's being discussed. It’s even better if things are done.
I won't delve into the national defense tax at this moment, but as with any tax, the Chamber has always emphasized three principles: the tax administration must be simple and efficient, the tax base should be as broad as possible, and the tax should not encourage unfair competition. And, of course, it is essential that taxes do not negatively affect the competitiveness of businesses. This, of course, is difficult to ensure in practice because, in the end, every tax means that money is taken out of the economy and redistributed based on political views. Unfortunately, this is often not a particularly efficient or economically supportive activity. As a result, it's clear that any increase in the tax burden leaves businesses with fewer opportunities for investment and growth.
Although, in the context of the national defense tax, it has occasionally been suggested that entrepreneurs are unwilling to contribute, this is certainly not the case. Setting aside the fact that income tax can only be collected when someone has created conditions for income to be generated in the first place, I can assure you that most entrepreneurs are willing to contribute more in exceptional circumstances if it is clear why and how this contribution will be used and if no additional bureaucracy is involved. The desire to find reasonable and workable solutions is precisely why we have proposed, and will continue to propose, various alternatives to the traditional corporate income tax if needed. At the Chamber, we have always advocated for solutions to be sought through reasoned dialogue, not belief-based approaches. Tax issues, in particular, should be areas where we talk more about facts and less about emotionally driven convictions.
We have repeatedly said that if there is a desire to talk about raising taxes, then we must also discuss how the collected taxes are used. I feel it is appropriate to commend those politicians who, at least in words, have expressed concern that the use of funds has long ceased to be sufficiently transparent or understandable. To make something more efficient, we must first understand how much is being spent, on what, and what we are getting in return. It is impossible to run a company without knowing this. The state, on the other hand, seems to manage quite successfully, and it’s no surprise when tens of millions are once again found forgotten and unused. Such “discoveries” do little to convince anyone that the state’s finances are in good order and transparent. But we hope the situation will improve.
It is clear, however, that we must take a very critical look at the entire spectrum of public services and make choices about what to keep and what not to. So far, we have mostly created additional public services without asking what their cost is.
Unfortunately, cuts of 5%, 3%, or 2% won’t bring about visible change. The goal must be one that requires real revision of activities and the termination of what is unnecessary. If we are spending resources to inspect micro-enterprises, where there are often only one or two employees, and requiring them to assess, for example, mental health risks related to their work, I maintain that this is not an essential activity. There must be a clear boundary somewhere – what is the responsibility of the individual or business, and to what extent do we consider it reasonable for the state to intervene. The state's function cannot be to act as a caretaker for every capable person and organize their life.
Dear guests, there are certainly many more topics we could discuss. Education is one of them. The coming year will undoubtedly be important for vocational education and training. This field has been neglected and underfunded for years. I am pleased that more attention is being paid to it because a strong vocational education system and strong vocational schools are certainly in the interest of entrepreneurs. In all of our interests. Entrepreneurs must express their views more boldly and clearly in this process.
I believe that closer integration between vocational and general education schools is essential. Likewise, the unified planning and ordering of training spots in vocational schools and gymnasiums by the state is necessary. It is also inevitable that in the coming years, a significant number of today's gymnasium levels will need to be closed, as a gymnasium level with fewer than 180 students generally does not provide the capacity to offer sufficiently high-quality education. There aren’t enough teachers or support specialists, and the renovation of such a number of school buildings is clearly beyond our means. These issues will not resolve themselves.
As the new school year is about to begin, it is appropriate to end on a positive note: at least enrollments in early childhood education programs at universities have increased, and young people are starting to take an interest in this field. If we could also get more teachers for science subjects, there would be even more reason to celebrate.
And finally, I would like to thank all the members of the Chamber of Commerce for their continued contribution to the development of Estonian business. I wish success to the members of the defense forces and to everyone else who ensures our security and safety, who do their work with dedication. Success comes only to those who pursue it with determination!
Thank you for coming, and enjoy the gathering!
Toomas Luman, Chairman of the Board, Estonian Chamber of Commerce and Industry
Photo: Erlend Štaub