Finland's Ministry of Finance officials presented their spending, structural and tax reviews on Monday, setting out concrete options to strengthen public finances and curb borrowing in the next electoral term. Most parties have committed to an 8–11 billion euro adjustment.
Budget chief Mika Niemelä presented the spending and structural reviews, while Terhi Järvikare, director-general of the tax department, presented the tax review. Officials stressed the situation is serious: public sector financing has not covered its tasks, which has led to heavy borrowing, and the high debt level has raised debt-servicing costs, accelerating borrowing further. No area of the public sector can be excluded from the spending review, they said.
The spending and structural review is split into seven areas, including social and health care, social security benefits, education and business. Officials propose freezing index increases for a fixed period, lowering their level, or removing automatic increases entirely, affecting earnings-related pensions, social security benefits, municipal basic services and wellbeing services counties.
Other proposals include reducing the number of wellbeing services counties, cutting the round-the-clock emergency network and concentrating specialised care. Officials also suggest abolishing staffing ratios in elderly care and child protection, shortening the earnings-related unemployment allowance to 300 days, ending Kela reimbursements for private doctor visits, cancelling child benefits, and abolishing or limiting the home care allowance.
On taxes, officials propose raising every marginal rate in the progressive income tax scale by one percentage point and lifting the corporate tax rate by a percentage point, along with higher inheritance and gift tax rates and new levies on air and sea passengers and tourists.
Based on reporting by Yle.