Kulbergs: State Budget Spending in Latvia Must Deliver Measurable Results

Latvian Prime Minister Andris Kulbergs of the United List party (AS) said on Friday, 9 October, at the conference “Smart Growth: A Sustainable State Budget in the Digital Age” that Latvia needs to change the principles behind its state budget spending. In his view, every euro spent should deliver a measurable result, rather than relying on ever-larger funding.

What taxpayers get in return

Kulbergs argued that the budget has for too long been discussed as a tool for dividing up money, with debates over which sector should receive more. The more important question, he said, is what residents receive in return for the taxes they pay. He warned that spending must not grow faster than revenue in the hope that economic growth will solve every problem. Systems that do not work should be changed, not automatically funded.

State assets and companies

The prime minister said AS proposes creating a Latvian development fund. It would pool state assets and manage them professionally and transparently. Capital would be invested in areas important to the economy, while dividends would go to the budget to finance social functions. The fund would also attract private capital and develop Latvia's capital market. State-owned companies, he said, should work for residents rather than in the interests of political parties.

Growth, courts and digitalisation

Kulbergs said budget sustainability cannot be achieved by saving alone; investment, higher productivity and companies able to compete globally are also needed. He said the court system matters for attracting investment: investors need commercial disputes resolved within a reasonable time and judgments enforced effectively.

Digitalisation and artificial intelligence should produce real savings, he said, measured in time, money and working hours saved rather than the number of information systems introduced. He criticised the practice of building new systems and registers with EU funding whose upkeep is later paid from the state budget, citing the health sector, which he said has 64 registers. He also noted that seven real estate companies still operate under ministries' oversight, even though the intention had been to centralise that function.

“Latvia does not need a more expensive state. Latvia needs a more prosperous state,” Kulbergs said.