Riga, Oct 3 (LETA) - In relation to next year's budget, social partners call on the government to consider additional support for other sectors, not only for the government's priorities, the Finance Ministry informed LETA.

On Friday, a meeting of National Tripartite Cooperation Council's subcommittee was held under the chairmanship of Finance Minister Arvils Aseradens (New Unity) to discuss the draft budget for 2026 and the budget framework for 2026-2028, as well as the accompanying draft laws.

During the discussions, the social partners expressed divergent views on a number of issues related to the budget process, such as the provision of additional support to other sectors and faster progress in implementing structural reforms in public administration.

The priorities identified by the government for next year's budget are national security, support for families with children and the quality of education, according to the ministry. These priorities will receive additional funding of EUR 565.5 million. Of this, EUR 320.3 million will go to defense and strengthening internal security, EUR 94.8 million to support families and health, and EUR 45 million to education. A further EUR 105.4 million is earmarked for other sectors, including agriculture.

The ministry noted that most of the additional funding has been secured through cuts in state budget spending. Overall, the spending cuts amount to EUR 233 million for 2026 and more than EUR 800 million over the medium term to 2028. The additional revenue is expected to come from dividends from state-owned companies, revisions to gambling and excise duties, as well as changes to the natural resources tax. The Finance Ministry explained that such solutions allow additional financing of priorities without increasing basic taxes, which has been essential for the government's social partners.

The finance minister stressed at the meeting that measures to increase workers' incomes are also important to the social partners, which is why the minimum wage will rise to EUR 780 from 2026 and the non-taxable minimum income for all workers to EUR 550 per month, which will have a positive impact on over 90 percent of workers.

Pension indexation will bring pension increases to EUR 1,488 from October 1, 2025, which means that 98 percent of pensioners will have their pensions fully reviewed. The Value Added Tax (VAT) rate on essential food products - bread, milk, eggs and fresh poultry meat - will also be reduced for one year from July 1, 2026. Changes to corporate income tax will boost investment, the minister said.

The funding for security will allow defense spending to reach 4.6 percent of gross domestic product (GDP), while improving border infrastructure and providing support to border municipalities. In education, a new funding model Program At School will be introduced from September 1, 2026 and the number of support staff will be increased. For families with children, the parental allowance for working parents will be maintained at 75 percent and access to healthcare and medicines will be extended.

Additional funding is foreseen for local governments to improve services for citizens, develop infrastructure and ensure the performance of delegated functions. At the same time, efficiency in public administration continues to be strengthened by cutting bureaucracy and public sector costs, the ministry informed.

The accompanying draft laws related to the budget were also discussed with the government's social partners.

The dialogue with the social partners on the draft budget for 2026 will continue at the meeting of the National Tripartite Cooperation Council on October 10. The Cabinet plans to approve the draft budget October 15 and submit to the parliament on October 15.