In the TV24 program "The Price of Money," economist, advisor to the Minister of Finance, co-founder and board member of the organizations "Latvijas Restarts" and "Bez partijām," as well as an elected member of the 15th Saeima, Guntars Vitols explained that both revenues and expenditures need to be assessed to balance the budget. Vitols pointed out that the budget situation should be evaluated as a whole, analyzing how to act with state revenues and expenditures. Latvia must manage to balance the budget by 2030, when a special exemption allowing increased borrowing for defense financing will end. If the state does not carry out the necessary reforms and cannot limit expenditures, tax increases may become inevitable. Therefore, it is important to assess the possibilities for reducing spending in advance and to make government management more efficient. Speaking about reforms, Vitols highlighted two directions. One of them is structural changes in government management, including eliminating the duplication of functions among institutions and merging ministries. However, he emphasized that this way would yield only minor savings. The second direction is a review of state expenditures based on their essence. This means it is necessary to assess which expenses are truly necessary for the state and which can be avoided. For this purpose, a broad list of proposals for possible expenditure reductions has been created, which Vitols compared to a menu from which the most suitable solutions can be chosen. He emphasized that such a list allows for the evaluation of various alternatives rather than automatically implementing all proposed cuts. However, if there is no political readiness to make decisions about limiting expenditures, tax increases may become a necessary solution.
