Minister of Finance Riikka Purra (PS) briefed reporters about the internal budget talks of the Ministry of Finance in Helsinki on Thursday, 8 August. The Ministry of Finance proposes in its budget draft cuts in, for example, the state subsidies provided to municipalities for organising integration services. (Mikko Stig – Lehtikuva)
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THE CENTRAL GOVERNMENT of Finland will bring in 76 billion euros in revenue while spending 88.1 billion euros in 2024, according to a budget draft unveiled on Friday by the Ministry of Finance.
The budget draft shows a deficit of 12.2 billion euros, with debt servicing costs alone adding up to 3.4 billion euros – 290 million euros more than this year.
The government estimated in its framework session last spring that the deficit would be 1.5 billion euros smaller.
“Not once has anyone brought figures that were positively surprising to my office,” Minister of Finance Riikka Purra (PS) commented as she briefed members of the media about the broad strokes of the budget draft on Thursday, 8 August.
The draft will serve as the groundwork for the budget negotiations beginning between the four ruling parties – the National Coalition, Finns Party, Swedish People’s Party and Christian Democrats – in September.
The Ministry of Education and Culture’s budget would, under the draft budget, contract by 50 million euros more than the ministry itself has proposed, with state subsidies for arts and museums, operating costs for arts and culture promotion, and youth and sports activity on the cutting block.
Riitta Kaivosoja, the director general at the Ministry of Education and Culture, told Helsingin Sanomat on Friday that the cuts would be consequential in the administrative sector despite their only accounting for a diminutive share of the overall budget.
The government decided last spring in its framework session that vocational and general upper-secondary education would no longer be free for over 18-year-old students, but the decision has since been scrapped because it was not projected to create the intended cost savings, revealed Kaivosoja.
“Some cities and municipalities notified immediately that they wouldn’t be limiting free access to the education. It would’ve put students in unequal positions,” she said.
Both the Ministry of Finance and Ministry of Social Affairs and Health are proposing that an additional roughly 80 million euros be shaved off state subsidies for social associations, a decision that would create a 130-million-euro dent in the funding starting in 2027.
Altogether budget appropriations for the administrative sector will fall by some 1.2 billion euros mostly as a consequence of the previously announced massive cuts in housing, unemployment and other social security cuts.
Funding for the Ministry of the Interior is to decrease by 399 million euros, 8 million euros less than proposed by the ministry itself. The decrease is primarily attributable to the absence of one-off expense items, such as the funding granted to erect obstacles along the eastern border, Kati Korpi, a director at the Ministry of the Interior, said to Helsingin Sanomat.
The single largest reason for the decrease is that the number of asylum seekers is expected to drop by 33 per cent, enabling the government to reduce spending on reception services by 115 million euros.
Korpi said she is pleased with the budget draft as it pertains to appropriations for the ministry.
The Ministry of Finance is also proposing that funding for integration services be slashed by 58 million euros more than anticipated last spring. The Ministry of Employment and Economic Affairs provides funding for municipalities for services designed to promote the integration of immigrants, such as interpretation services.
Antti Kaihovaara, a senior expert at the Ministry of Employment and Economic Affairs, said to Helsingin Sanomat that the ministry is presently looking into the exact targets of the cost savings.
The appropriations for integration and international expertise will nonetheless increase due to the international protection granted to refugees from Ukraine.
Funding for research, development and innovation activity are to be increased, whereas funding for employment and entrepreneurship promotion services will decline as a result of municipalities taking over employment services in 2025.
Altogether the Ministry of Employment and Economic Affair’s budget is to diminish by 677 million euros.
The Ministry of the Environment and Climate Change would see its budget grow by almost a million to 244 million euros, in part due to the 5.8 million euros allocated for Invest EU. The ministry, though, would have to slash 100,000 euros from water protection 400,000 euros from subsidies for environmental organisations and management and – temporarily – 500,000 euros for combating environmental damage.
The Finnish Environment Institute (Syke) would also see its funding decline by 330,000 euros.
The Ministry of Finance is also pledging less funding for developing the transport infrastructure and operating transport-related agencies. The budget for transport and communications networks, for example, would contract by 270 million euros from last year.
Also the Ministry for Foreign Affairs would have to tighten the belt by an additional 2.5 million euros. The savings would have to be derived mostly from general operating costs, namely staff costs and the operating costs of embassies and consulates around the world.
Appropriations for various membership fees and contributions would reduce by 400,000 euros. With most such costs beyond the control of the Ministry for Foreign Affairs, the cuts could target contributions to, for example, funds and organisations established under the auspices of the United Nations.
“These decisions will be made during the course of the autumn, as preparatory work on the budget progresses,” Katja Bordi, the head of economic planning at the Ministry for Foreign Affairs, told Helsingin Sanomat.
Aleksi Teivainen – HT
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Source: www.helsinkitimes.fi
