Kulbergs: Latvia must learn to spend smarter, every euro should deliver measurable results

Latvian Prime Minister Andris Kulbergs, of the United List party (AS), said on Friday at the conference "Smart Growth: A Sustainable State Budget in the Digital Age" that every euro spent from the state budget must produce a measurable result. He stressed that the state has to learn to spend more wisely, since spending cannot keep growing faster than revenue.

Criticism of the budget approach

Kulbergs said the budget has for too long been discussed mainly as a tool for dividing up money: which sector should get more and where to find extra funds. In his view, the more important question is what residents receive in return for the taxes they pay. He noted that not every problem can be solved with additional funding, new staff positions or institutions, and that systems which do not work should be changed rather than automatically funded.

As an example, the prime minister cited the health sector, which by his account has 64 registers. He criticised the practice of building new systems and registers with European Union funding and then covering their upkeep from the state budget. Kulbergs also pointed to seven real estate companies that, according to him, still manage property under the supervision of individual ministries, even though the function was previously meant to be centralised.

Development fund and revenue

The prime minister urged more attention to increasing state revenue, with the work of the state apparatus, institutions and EU funds geared to that goal. The United List proposes a Latvian Development Fund that would bring together state assets and ensure professional, transparent management. Kulbergs said capital should be invested in areas important to the economy, with dividends directed to the state budget to finance social functions. The fund would also attract private capital and develop Latvia's capital market.

Growth, courts and digitalisation

Kulbergs stressed that budget sustainability cannot be achieved through savings alone; investment, higher productivity and companies able to compete globally are also needed. He highlighted the role of the court system in attracting investment: commercial disputes should be resolved within a reasonable and predictable time, and judgments should be enforced effectively.

Digitalisation and artificial intelligence, he said, must produce real savings, measured in time, money and working hours saved rather than the number of information systems introduced. "Latvia does not need a more expensive state. Latvia needs a wealthier state," Kulbergs said.