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General Government Fiscal Plan for 2019–2022
Government to boost growth, employment and social justice

Government Communications Department 11.4.2018 20.38 | Published in English on 13.4.2018 at 15.30
Press release 188/2018
Government to boost growth, employment and social justice

On 11 April, the Government agreed the General Government Fiscal Plan for 2019–2022. The Government will promote growth by investing in education and skills. Employment will be strengthened by facilitating the employment of unemployed young people, expanding conversion training and increasing the resources of the Employment and Economic Development (TE) Offices. The Government will increase services and benefits to improve social justice. The General Government Fiscal Plan will be approved in a Government plenary session on Friday 13 April.

Finland’s economy is growing quickly and growth is broad-based. Many of the economic policy objectives set by the Government are being fulfilled:

It appears that the 72% employment rate objective, considered ambitious, will be reached. In February, the trend employment rate was 71.1% (adjusted for seasonal and random variation).

  • The Government Programme target of 110,000 more people in employment is achievable. The number of people in employment has grown by 90,000 from the beginning of the parliamentary term.
  • ​The total tax ratio began to fall in 2017.
  • The general government debt-to-GDP ratio already began to level off in 2016. The debt ratio will continue to fall in the next few years.
  • The budgetary targets set for local government and social security funds in the General Government Fiscal Plan will be met. The central government deficit will also decline.

Measures to improve employment are the priority

Demand for public employment services has increased due to the activation model. The Centres for Economic Development, Transport and the Environment (ELY Centres) have estimated the additional personnel requirement to be a total of 206 person-years. In terms of employment appropriations, the estimated additional requirement for 2018 is a total of EUR 11.2 million. The Government has decided to implement in full the ELY Centres’ requests with respect to both employment appropriations and personnel resources.

Employment services complying with the activation model that contribute to the activity condition are considered to include participation in employment-promoting coaching, training or activities arranged by a trade union or professional organisation, a civil society organisation, a municipality or other corresponding party, and whose arrangement has been funded by public funds or is otherwise approved by the employment authorities.

The opportunity for the unemployed to study independently will be improved. Unemployed people aged 25 years or more will be offered the opportunity, without losing unemployment benefit, to undertake studies of short duration that strengthen vocational preparedness or support business activity. The studies will contribute to the activity condition referred to in the activation model. The aim is to submit a legislative proposal to Parliament so that the changes enter into force on 1 August 2018.

The Government will facilitate the employment of unemployed young people by preparing an amendment to the Employment Contracts Act. Through this amendment, an employer would be allowed to make a fixed-term employment contract with a young person under 30 years of age who has been a continuously unemployed job seeker for at least 3 months without a justified reason otherwise prescribed in the Act.

The Government will prepare an amendment to the Employment Contracts Act aimed at easing the criteria for individual redundancy in businesses employing 20 people or less. The objective of the change is to lower the threshold for hiring new employees. 

The Government will establish a study project concerning the Act on Cooperation within Undertakings (YT Act), in connection with which the criteria for collective redundancy, among other things, will be assessed.

The Government also agreed on a Working Hours Act. The Working Hours Act will be based on a wide area of application and the principle of extensive flexibility. New elements will consist of statutory working time bank and flexible working hours.

No changes will be made to the general principles of local agreement. More details will be announced when the Government submits its legislative proposal.

The Government will reform the tax deduction for temporary quarters so that it better supports moving for the sake of employment. The maximum amount of the deduction will be raised from the present EUR 250 to EUR 450.

The Government wishes to improve opportunities for people with partial work ability to continue in working life or be employed in the open labour market. The goal is to increase equality and the number of people in employment, reduce occupational disability expenditure and eliminate employment thresholds and incentive traps. In April, the Government will launch a study aimed at surveying the situation of people with partial work ability in the labour market, transitions to and from disability benefits, and the services available to promote remaining in working life or employment. The study is part of the key Government project ‘Career opportunities for people with partial work ability’.

In addition, as part of the growth service pilots, an impact-based project, for example utilising work banks, will be launched in cooperation with municipalities and service providers. The aim will be to employ people with partial work ability or others who are in the most difficult labour market position to a level of EUR 5 million and 2,500 people. Experiences gained about work banks will be utilised in the preparation of the project.

Availability of skilled labour will be facilitated through training

Through Finland’s rapid economic growth, unemployment could be reduced even more quickly. At the same time, however, it is harder to find skilled labour. To solve the problem, the Government has already initiated various reforms related to educational levels. In addition, availability of labour will be promoted through growth services coming under the responsibility of the counties. These measures are aimed at securing skilled labour.

The Government has decided to initiate one-off, fast measures in 2018. These will aim to ensure sufficient supply of labour for businesses and to facilitate the availability of skilled labour, so that job seekers are matched with vacancies. The adopted measures relate to developing the skills of the labour force and particularly to the training needs of businesses in sectors where there are shortages of skilled workers and which are important for growth. The supplementary budget will allocate to the measures a total of EUR 54 million, of which EUR 30 million will go to training under the administrative branch of the Ministry of Education and Culture.

The Government will enhance and increase volume for business-oriented labour market training as well as growth service packages. EUR 24 million will be allocated to this. EUR 10 million will be allocated for conversion training of skilled workers in the ICT sector and other sectors where there are labour shortages. In vocational education, labour policy training will be increased and a pilot implemented in which a model of precise training for sector change will be created. EUR 16 million will be allocated for this. The goal is to develop the existing vocational education system so that it can respond more precisely to the needs of those changing sectors. Part-time and flexible training and teaching of literacy skills and the Finnish and Swedish languages will be increased with EUR 2 million in liberal adult education establishments. EUR 2 million will be allocated to improving the skills level of people with weak basic skills.

Continuous learning made easier and more attractive

The Ministry of Education and Culture will launch a continuous learning reform (Skilful Finland), prepared in cooperation with the Ministry of Economic Affairs and Employment. The flexibility of the vocational education reform as well as employment and growth service training will be exploited and higher education establishments’ educational offerings and learning environments opened up for utilisation by both individuals and businesses. Completion of qualification segments and modules will be open and flexible. The emphasis on education not leading to a qualification will be increased in the financial steering of higher education establishments.

The need to reform legislation on study leave and adult education subsidies will be assessed to increase studying alongside work as well as further and continuing education.

A digital service package supporting continuous learning will be launched as a cooperative effort of the Ministry of Education and Culture, the National Board of Education and the Ministry of Economic Affairs and Employment. It will combine services that support continuous learning, skills mapping and recognition services, career planning and guidance services, and skills acquisition and development services. The project will be launched using current funding.

Employment package decided in the spending limits discussion (in Finnish)

Investments in social justice

Boosting employment throughout Finland and ensuring the sustainability of general government finances also constitute a cornerstone of the Government’s work to reduce inequality and strengthen social justice. Finland is one of the most equal countries in the world. In Finland, inequality arises more from increasingly widespread affluence than from a broad increase in financial disadvantage.

Professor Juho Saari’s working group on inequality proposed a diverse range of means to prevent and reduce inequality. The working group cast light on the diversity of inequality.

The 12 proposals of Professor Saari’s working group and the Government’s comments on them (in Finnish)

Improvements to the service system

The Government will invest in improving the position of over-indebted people at an annual level of EUR 9 million in 2019–2022. This will be allocated to financial and debt counselling, to counselling of debtors in connection with enforcement, and to accelerate court proceedings. Of this, EUR 1 million in 2019–2020 will also be allocated to mitigating the financial problems of people in rental accommodation. Financial and debt counselling resources will be increased with an additional appropriation of EUR 5 million, aimed at ensuring the regional availability of the service and developing cooperation preventing debt problems. Communication about financial and debt counselling services will be improved with additional resources. Counselling will be increased in enforcement with the aim of helping those encountering problems with their finances for the first time. At the same time, cooperation between financial and debt counselling and social work will be developed.

The Government is preparing a mental health programme, aimed at ensuring the availability of mental health services in the new health and social services system. The Government will reform self-determination, mental health and substance abuse legislation.

Investment grants for special groups will be increased by EUR 5 million per year. These will be directed at acquiring in the market apartments for subletting to homeless people able to live independently and replacing emergency shelters with apartments intended for people living on the street.

Improvements to income transfers

The Government considers it important that inequality is reduced by means of targeted measures through various income transfers. The focus must be on primary benefits to ensure that they are targeted at those who are in the most difficult life situations, such as sick people.

To reduce inequality and emphasise primary benefits, the Government will increase minimum daily allowances (sickness allowance, parental allowance, rehabilitation and special care allowance) to a level corresponding to labour market support. This will mean an increase of EUR 80.50 per month in minimum daily allowances.

The Government will allocate EUR 10 million to increasing the guaranteed pension of the lowest-income pensioners.  Among the recipients of the guaranteed pension are also young disability pensioners.

Government will allocate EUR 5 million to lowering the annual co-payment limit for medicines. The change will be prepared in collaboration with social partners.

Children and families

The Government will initiate for the next government the preparation of a national child strategy. The objective is a cross-sectoral strategy based on extensively researched knowledge, strengthening the interests of the child in social decision-making. The child strategy will strengthen a child- and family-positive society as well as positive development of fertility in a forward looking way. Preparation will be guided by a broad-based child forum and the work of a strategy steering group. Preparation of the child strategy will be the responsibility of Minister of Family Affairs and Social Services Annika Saarikko and Minster of Education Sanni Grahn-Laasonen.

The basic security of the lowest-income families with small children will improve when parental allowances rise at the same time as minimum daily allowances are increased.

The Government with enhance the equality of family leave. The parents’ allowance period for adoptive parents will be extended to 233 working days from the date the child is taken into their care. The right to the parents’ allowance will be granted to all parents adopting a child under 18 years of age from outside the family. The adoption grant will be also be raised with an annual appropriation increase of EUR 0.3 million.

Mothers caring for a child alone will be granted the right to parental allowance days corresponding to the paternity allowance. In addition, mothers adopting a child alone and caring for a child alone will be granted the same right.

The paternity allowance period for the father of a multiple-birth family will be extended when two or more children come to the family at the same time. The total length of the paternity allowance period can be no more than 105 working days, equivalent to the maternity allowance days.

The changes will increase the costs of earnings security insurance. The legislative amendments will be prepared together with social partners by autumn 2018.

In addition, the Sickness Insurance Act will be amended so that discharging a municipal or county position of responsibility is not considered to be gainful employment that results in the payment of the minimum amount of parental allowance. The change will not apply to full-time or part-time positions of responsibility. The change will have no significant cost impact.

Promoting equality in education

Equality in early childhood education will be supported with a new EUR 10 million appropriation for 2019. The money will be used to reduce group sizes and hire additional personnel in day-care centres operating in challenging areas. This form of funding, previously used in preschool and basic education, is a tool recommended by researchers for combating inequality and in which, for example, the education level and unemployment of an area have been used as criteria. The equality grants will be allocated to organisers of early childhood education. 

The experimental scheme on free early childhood education for 5-year-olds will be expanded and continued. The Government decided to allocate a new appropriation of EUR 5 million for this purpose. The aim of the extension of the free early childhood education experimental scheme is to bring more municipalities within the scheme and therefore raise the participation rate of 5-year-old children in early childhood education. An Early Childhood Education Act will be submitted to Parliament in spring 2018.

To promote educational equality, a learning materials allowance for upper secondary education students will be introduced. The allowance, intended to cover the costs arising from attending upper secondary education, will be directed at vocational education or general upper secondary education students under 20 years of age who are entitled to the low-income supplement to the study grant. The allowance will amount to approximately EUR 46 per month.

Reform of general upper secondary education to be implemented – language studies to be brought forward

The Government decided on additional funding for general upper secondary education. The goal of the reform of general upper secondary education, to be submitted as a Government proposal, is to enhance the attractiveness of general upper secondary education as a general form of education, fostering eligibility for further studies in higher education and strengthening the quality of education and learning outcomes. Support and guidance of upper secondary education students will also be strengthened, and cooperation between higher education and working life as well as internationalisation increased. In total, EUR 4 million in 2021 and EUR 8.53 million from 2022 will be allocated for the costs arising from the reform.

Studying of the first foreign language, i.e. A1 language, will be brought forward to begin already in the spring of the first year of elementary school. The earlier language studies will apply to all first-grade pupils from 1 January 2020. The decree amendments required by the change will be issued in autumn 2018 and the curriculums in the National Board of Education during 2019. The weekly lessons per year to be used for the bringing forward of language studies (1 hour for first grade in the spring and 1 hour for second grade) will be added to the lesson hour quota. The total cost of the reform will be EUR 12 million from 2021.

Investments in affordable homes: A-Kruunu can double its housing production

The Government will capitalise the non-profitmaking company A-Kruunu Oy with EUR 50 million. Through the decision, A-Kruunu Oy will be able to increase its annual production of reasonably-priced rental housing to 800 apartments, which is double last year’s level. This will enable an increase in construction in the Helsinki Region. In addition, A-Kruunu will also expand its construction into the larger metropolitan regions. The capitalisation will also facilitate an increase in wood construction as well as concept projects created for the changing needs of the housing market.

The Government wants to halve the number of homeless people by 2022.

The Government decided to increase investment grants for special groups by EUR 5 million per year, i.e. by EUR 20 million in the spending limits period. The money will be directed at acquiring in the market apartments for subletting to homeless people able to live independently. In addition, emergency shelters for the homeless will be replaced with apartments.

The housing policy measures will contribute to implementing the proposals of Professor Juho Saari’s working group, aimed at reducing inequality.

State real estate ownership to be reformed

The real estate holdings of the state and state-owned companies (e.g. in railway station districts) will be reviewed and non-strategic land property suitable for housing construction or business activity will be centralised in Senate Properties. To this end, for Senate Properties will be established a separate subsidiary, for which strategic policies will be prepared for housing construction and other real estate development in accordance with principles of sustainable urban development.

The company will develop properties to the so-called zoning development stage, after which it will sell the properties on the market. The company may, at its discretion, also own properties for longer than zoning development, if this is necessary from the perspective of the city and the project’s other parties.

Government secures sufficient funding for counties and freedom of choice pilots

EUR 95 million will be allocated to preparation and steering of the regional government, health and social services reform, which will cover the costs of the counties’ activities as well as preparatory work taking place in the counties in 2019. The reform will also mean major changes to information management and information systems. Approximately EUR 98 million will be allocated to the funding of the digital transformation programme in 2019. It is intended to direct the funding to national projects of various administrative branches and as grants to counties for their ICT change support. To implement the digitalisation and ICT services required by the counties, the counties’ ICT service centre Vimana Oy will be capitalised by transferring to the company central government shareholdings valued at approximately EUR 30 million.

In the spending limits discussion 2018, the Government decided to finance the start-up stage of freedom of choice pilots with EUR 200 million instead of the EUR 100 million decided earlier. Based on the pilot applications and the negotiations specifying them, the Government will decide in May on the implementation of the first stage of the reform. The additional funding now decided by the Government will be allocated later. The freedom of choice pilots will be funded by utilising the central government balance sheet, for example.

Freedom of choice in health and social services will enter into force in phases. Successful pilots and service voucher trials can be used to manage expenditure risks in the early stage of the reform and to temper the magnitude of the change. All of the counties have applied for pilots. The pilots may begin on 1 July 2018, when Parliament has approved the Freedom of Choice Act. Decisions on the pilots will be made in May 2018. The pilots will strengthen the counties’ uniform practices by trialling different freedom of choice tools and various information technology solutions. The Government has already allocated EUR 30 million to freedom of choice trials under current legislation.

Experience of change in growth services will be sought through the implementation of growth services pilots. A total of 26 proposals has been submitted, of which around half include in one way or another an alliance model trial. The pilots are intended to trial the coordination of health and social services and growth services in services for the long-term unemployed. Pilots may be launched from autumn 2018, when the necessary legislative changes have been approved by Parliament.

Government statement on the regional government, health and social services reform 10 April 2018 (in Finnish)

Cutting of public sector costs will continue (‘Public sector billion’)

The objective of the operational reform of the municipalities, the counties and the entire public sector is to strengthen general government finances by EUR 1 billion by 2029 (‘Public sector billion’). This is reflected in the General Government Fiscal Plan 2019−2022. The package consists of three parts:

  1. A reform programme to reduce municipalities’ duties and obligations
  2. The municipalities’ incentive schemes for digitalisation, operational finances expenditure and premises costs
  3. Improvement of central government digitalisation, productivity and premises efficiency

The final Government proposals on the reform will be issued during the autumn.

The savings impact of the cutting of municipalities’ duties and obligations, launched at the beginning of the parliamentary term, will be approximately EUR 340 million by 2029.

In addition to this, three incentive schemes, whose funding was decided on in the spending limits discussion, will be prepared to support the municipalities’ cost efficiency. The incentives are intended to achieve a savings impact of EUR 300 million.

First to be launched will be the municipalities’ digitalisation incentive scheme, for which EUR 40 million will be allocated from 2019. EUR 50 million in 2021 and EUR 100 million from 2022 will be allocated to the incentive scheme for the municipalities’ operational finances expenditure. EUR 50 million in 2021 and EUR 100 million from 2022 will be allocated to developing the municipalities’ building stock and improving the efficiency of premises use.

Funding for the incentive schemes will be taken from within the system of central government transfers to local government. Further preparation of the incentive schemes will assess and take into account the fulfilment of the principle of adequate financial resources in respect of the municipalities.

An annual productivity target for operating expenditure, binding on all administrative branches, will be set for 2020–2029 for the digitalisation and productivity development of central government functions. The annual productivity target is 0.3% for the Ministry of Defence, the Ministry of Justice and the Ministry of the Interior and 0.5% for the other administrative branches. The reduction in operating expenditure can be allocated in full within the administrative branch to consumption expenditure in a manner decided by the administrative branch.

To ensure genuine productivity, the Government will implement a comprehensive analysis of the potential for productivity and digitalisation. To facilitate productivity-promoting investments, EUR 1 million will be added to the joint investment item of development items for each EUR 6 million saving achieved. In addition to administrative branch productivity savings, EUR 100 million in savings can be achieved by continuing the targeted development of public sector productivity.

The savings target for the central government premises programme will be raised by EUR 50 million to EUR 150 million. The programme will run until the end of 2029.

The measures will strengthen general government finances by a total of EUR 940 million by 2029.

Implementation and the effects of cutting the costs of municipalities, counties and the whole public sector, ‘Public sector billion’ (in Finnish)

Deregulation will continue

Deregulation has taken place in all of the administrative branches throughout the parliamentary term. The purpose of deregulation is to make the everyday lives of citizens and business easier and to reform the authorities’ operating practices. The Government continued the deregulation work in the spending limits discussion. Some of the deregulation projects are already under way, and the Government confirmed their progress in the spending limits discussion. New measures were also initiated, for example barriers to work for asylum seekers will be removed, conditions for business activity improved, the original capital requirement (EUR 2,500) for limited companies eliminated, the implementation of the right to earnings-based unemployment security of non-owning family members of entrepreneurs improved, fund-raising for voluntary activities (change in the Lotteries Act) facilitated, all-year-round application to upper secondary schools allowed, restrictions on the resitting of matriculation examinations removed, and the introduction of a mobile driving licence explored.

Proposals of ministries and government groups on deregulation (in Finnish)

Municipalities’ measures produce results

Municipal finances have improved significantly in recent years, strengthened by measures undertaken by the municipalities and the Government. Local government has achieved the budgetary target set for it, because its deficit will remain below the target of 0.5% in ratio to GDP during the spending limits period. Municipal finances will be significantly impacted by the regional government, health and social services reform, whereby health and social services will be transferred away from the municipalities. The greatest pressure on municipalities’ expenditure has been health and social services for elderly people. In the future, municipal finance duties will be focused on education, which is not subject to corresponding expenditure pressures.

The Government will restore the discretionary increase in central government transfers granted to municipalities, for which EUR 10 million will be allocated. In addition, EUR 10 million is earmarked for discretionary merger grants to municipalities in or facing financial crisis.

Public sector consolidation measures according to Government Programme

The Government’s consolidation package, aimed at directly strengthening public finances, consists of measures to curb growth of public expenditure as well as expenditure re-allocations. Together, these measures will strengthen public finances by approximately EUR 4 billion. There remains uncertainty associated with the impact of measures dependent on decisions by municipalities. The municipalities have, however, adjusted their finances by other means, such that the scale of savings can be estimated as being in line with the consolidation measures annex included in the Government Programme.

Deficit will fall until 2020

On-budget revenue is expected to be EUR 53.8 billion in 2019. Actual on-budget revenue is expected to grow in the spending limits period by an average of approximately 8% per year. The most significant change in tax criteria affecting tax revenue in the spending limits period is the regional government, health and social services reform that enters into effect in 2020, whereby according to current estimates approximately EUR 12 billion in tax revenue will be transferred from the municipalities to central government.

Most of the tax policy measures of the Government Programme have already been implemented in 2016–2018. The Government will continue according to its earlier policies by reducing car tax and increasing tobacco tax in 2019. Rising pressures directed at taxation on labour will be mitigated by making annual index adjustments to earned income tax criteria, so that taxation does not increase along with the general earnings level or inflation. In addition, in connection with the regional government, health and social services reform, tax criteria will be adjusted to ensure that no-one’s taxation increases as a consequence of the reform.

Central government on-budget revenue, expenditure and balance, EUR billion

 

2018, B

2019, GGFP

2020, GGFP

2021, GGFP

2022, GGFP

Revenue, excl. net borrowing

52,7

53,8

67,3

69,9

71,6

Expenditure

55,8

55,1

68,3

71,3

73,1

Deficit

-3,1

-1,3

-1,0

-1,4

-1,5

Deficit excluding Defence Forces' strategic performance capability projects

     

-0,4

-0,5

On-budget expenditure is expected to be EUR 55.1 billion in 2019, which is EUR 0.7 billion less than that budgeted for 2018. Appropriations will be reduced, for example, by the ending of funding for fixed-term key Government projects and by a reduction in unemployment benefit expenditure. Compared with the previous spending limits decision, expenditure will be, on average, approximately EUR 0.2 billion higher annually.

The central government on-budget deficit is projected to be approximately EUR 1.3 billion in 2019, whereas the deficit estimated for 2018 according to the budget is EUR 3.1 billion. The deficit will fall until 2020, but it will grow again in 2021 due, in particular, to Defence Forces’ strategic performance capability projects. Compared with the previous spending limits decision, the estimate for the deficit during the spending limits period has fallen significantly, due to higher revenue estimates in particular. Central government debt is assumed to grow by approximately EUR 5.1 billion during the spending limits period and to rise to EUR 114 billion in 2022.

Economic outlook and public finances

Finland’s economy will continue to grow quickly in the coming years. The rapid recovery of the economy and continued strong growth will increase demand for labour, and employment growth will be the fastest for years. As a result of the increase in employment, private consumption will also accelerate. In the latter part of the spending limits period, economic growth will continue, while slowing more closely to the medium-term growth rate. The structural change in the economy and the demographic changes that have already been under way for years will also affect the longer-term growth outlook of the economy.

Finland’s general government budgetary position has improved in recent years, thanks to consolidation measures and good economic development. The general government budgetary position will continue to develop favourably, and general government finances will turn slightly to surplus in the next few years after more than ten years in deficit. The favourable economic conditions will not, however, correct the sustainability gap in general government finances, because growth in age-related expenditure due to changes in the population age structure will automatically weaken general government finances for a long time to come. For general government finances to be on a sustainable basis also in the longer term, they would still have to be more clearly in surplus at the beginning of the next decade.

Public debt began to decline in ratio to GDP in 2016, and the debt ratio will continue to fall in the spending limits period. Nominally, debt will continue to grow, and general government finances will accumulate debt, if at a slower rate.

The economic assessments presented above are preliminary. The Ministry of Finance’s Economic Survey will be published simultaneously with the General Government Fiscal Plan on 13 April.

The General Government Fiscal Plan includes the Stability Programme, which Finland submits to the EU. In the programme, the Government outlines its General Government Fiscal Plan. The programme is part of the European Semester for economic policy cooperation.

Inquiries: Markus Lahtinen, Special Adviser to the Prime Minister (Economic Policy), tel. +358 295 160 404, Matias Marttinen, Special Adviser to the Minister of Finance, tel. +358 44 269 3113 and Juha Halttunen, Special Adviser to the Minister of Employment, tel. +358 50 574 0236

Selections from the appropriations and Government policies

  • A total of EUR 70 million (2017–2020) has been allocated to the overall expenses of the EU Presidency.
  • The present building stock of Oulu and Pelso prisons is at the end of its service life and there is a need to launch new investments without delay. Prisons will be retained in Oulu and Vaala. Project planning work on the prisons will begin immediately and will be ready in spring 2019. The objective is for new construction of the Vaala prison to begin in 2019 and for it to be completed by the end of 2021. EUR 6.6 million will be allocated in the spending limits from 2022.
  • Defence appropriations include estimated funding of EUR 1 billion per year in the latter part of the spending limits period for the first years of the HX fighter project. 
  • Military crisis management expenditure will be increased on average by EUR 46 million per year compared with the previous General Government Fiscal Plan.
  • To safeguard Police operations and maintain the level of person-years at 7,200 in the spending limits period, additional funding of EUR 18 million is allocated to 2019 and a EUR 16.4 million increase to 2020–2022.
  • To safeguard the core operations and functional capacity of the Finnish Security Intelligence Service, funding will be strengthened permanently by EUR 2.5 million. The impact of civil intelligence legislation on the Security Intelligence Service has also been taken into account, for which additional funding of EUR 10 million per year will be allocated.
  • The Government will alleviate the position of farms encountering financial difficulties due to problematic profitability and an unsuccessful crop season. EUR 10 million will be transferred to fund compensatory allowances on a one-off basis for 2019.
  • Penal scales for sexual offences against children will be tightened, for which the Ministry of Justice will be allocated an increase of EUR 0.87 million for the implementation of legislative changes.
  • EUR 2.2 million will be allocated to enhancing sanctions ancillary to conditional imprisonment.
  • An increase of EUR 1.34 million will be allocated to assessing the recidivism risk of those convicted for violence as well as for reviewing the imposition of parole monitoring.
  • An increase of EUR 2.2 million will be allocated to changing first-offence regulations.
  • EUR 10.8 million will be earmarked for a reform of the procedure on imprisonment for non-payment of fines. The Police should forward an offence punishable by a fine to District Court proceedings when a person who has repeatedly received fines can be considered to show disregard for the law. Repetition would means seven similar offences punishable by a fine within a year. The District Court could convert a fine into imprisonment if the fine is not collected.
  • An allocation of EUR 10 million will be added for the operating expenditure of the Employment and Economic Development Offices to be used for conducting regular interviews.
  • A EUR 6 million increase for integration education and training has been taken into account in the appropriation for public employment and business services.
  • An estimate of 4,000 asylum seekers per year has been used as the assumption for immigration expenditure. The estimate of people within the scope of reception has risen due to prolonged and numerous appeal processes. The estimate of the number of asylum seekers receiving residence permits has also increased, as a result of which municipalities’ integration compensation will be increased by EUR 22 million in 2019. Due to changes in assumptions, the estimate of immigration expenditure will rise in the first three years of the spending limits period, but will fall slightly in 2022.
  • Funding for the Forest Biodiversity Programme for Southern Finland (METSO) will be increased by EUR 5 million compared with the spending limits limit. METSO, which is based on land owners’ voluntary protection measures, is one of the most significant ways of protecting forest biodiversity.
  • During the spending limits period, funding for Metsähallitus’ nature services will be increased annually by EUR 1.1 million for tasks related to seed supply for forest trees in Northern Finland and emergency stockpiling.
  • To support the implementation of the objectives of the Energy and Climate Strategy, EUR 6 million will be allocated in 2019–2021 to acquisition and conversion support for electric cars as well as gas and ethanol conversions of cars.
  • Based on the Energy and Climate Strategy, the authorisation for granting energy subsidies will be increased by EUR 5 million in 2019–2021. In addition, the authorisation for granting energy subsidies will be increased by EUR 40 million in 2019–2020 and by EUR 60 million in 2021–2022 to support biorefineries. This increase is conditional on a EU Regulation under preparation facilitating biorefinery investments in Finland.
  • To increase the information security and functional reliably of the digital society, EUR 2 million will be allocated in 2019 and EUR 3 million in 2020–2022.
  • The right to financial aid and transport aid for students will be expanded also to apply to primary and lower secondary education studies of those who have passed the age of compulsory schooling elsewhere than in folk high schools.
  • The intention is to transfer the arrangement of healthcare for students in tertiary education to the responsibility of the Social Insurance Institution (Kela). The Finnish Student Health Service (FSHS) would act as a national provider of services and at the same its activities would be expanded to also cover students of universities of applied sciences. EUR 3 million for 2019 is allocated to the one-off costs arising from the expansion of the FSHS’ activities.
  • An additional appropriation of EUR 7 million will be allocated to the system of central government transfers and discretionary grants for culture.
  • In increase of EUR 8 million will be allocated to the operating costs of the Social Insurance Institution, which will enhance the processing of social assistance and telephone services, and make forward provision for the renovation of operating premises.
  • The Government will fund the establishment of a national drug development centre with a total of EUR 11 million in the spending limits period. High-level basic and clinical health sector research is carried out in Finland. The early stage of drug development requires special expertise, however. With the centre, it will be possible to take drug development projects based on academic research to the clinical stage of the drug development cycle, and to create new growth companies. The establishment of the national drug development centre will also promote and support the objectives of the health sector growth strategy.
  • An annual appropriation increase of EUR 0.3 million will be allocated to adjusting the adoption grant for adoptive families.
  • EUR 2.5 million will be allocated for compensation required by the Military Accidents Act.
  • In relation to the establishment the new National Supervisory Authority (Luova), the transfer of activities and resources from the National Supervisory Authority for Welfare and Health (Valvira) to the new authority, the Finnish Medicines Agency, the Ministry of Social Affairs and Health, and the Radiation and Nuclear Safety Authority (STUK) from 2020 has been taken into account.
  • EUR 1.6 million is allocated in the spending limits period to strengthening the Team Finland network with special experts in trade and business.
  • The Government has decided to study the introduction of a plastics tax.

Annex

General Government Fiscal Plan 2019−2022 Other measures of the spending limits discussion (in Finnish)