Valtiovarainministeri Riikka Purran puhe OECD:n Suomi-raportin julkistustilaisuudessa

Valtiovarainministeri Riikka Purra piti avauspuheenvuoron talousjärjestö OECD:n maaraportin julkistustilaisuudessa.

Distinguished guests,
 
Ladies and gentlemen,

Thank you to everyone who has joined us here today, as well as those listening online. 

Today, the Organisation for Economic Co-operation and Development, the OECD, is publishing its country survey on Finland. The Survey looks at the Finnish economy with the aim to identify policy areas, where targeted measures can enhance the economy’s growth potential.

I would like to extend my sincere thanks to Luiz and the whole OECD team for their excellent work and this comprehensive report. High-quality analysis and new ideas for reform are of utmost importance to us, especially in the current situation.

The OECD report indeed includes many recommendations. However, it also acknowledges our current fiscal constraints, and I especially welcome that many of the proposed measures do not require increased public spending. 

The Government has previously decided on consolidation, employment measures and tax increases amounting to 9 billion euros, more than 3 percent of GDP. Spending cuts and tax increases have rapid impact public finances in the short term. The structural measures enhance Finland’s economic competitiveness by increasing employment, encouraging investment, and improving productivity in the medium and long term.

The fiscal situation has been made more challenging by the security situation, which compels Finland to significantly increase its defense spending. By 2029, defense expenditure will be raised to at least 3 percent of GDP, representing a permanent increase of over 3.5 billion euros.

This substantial and long-term commitment places additional pressure on public finances and underscores the urgent need for reforms that are not only effective but also fiscally sustainable.

The views of the OECD and the Finnish Government are very much aligned on many issues. We both recognize that economic growth is crucial—especially for the sustainability of public finances. Finland needs stronger growth, faster productivity gains, and increased supply of labour.

Since the economic outlook is currently filled with uncertainty, Finland must be prepared in short term for both better and worse scenarios. The geopolitical and multilateral structures are challenged, the range of possible outcomes is wide and the outlook for the future can change rapidly. 

Precisely for this reason, we need bold solutions to stimulate growth.

In our recent mid-term review, the Government made several major decisions, including a large package of tax cuts. These actions are supported by economic research and are expected to have a positive impact on the economy. 

Tax cuts have been previously recommended also by the OECD precisely, because Finland has one of the highest tax wedges among OECD countries. 

I want to highlight that this government is strongly focused on supply-side measures. These types of actions typically help reduce prices and costs, unlike demand-side measures, which often have the opposite effect. The OECD also often places emphasis on supply-side reforms.

The efficient allocation of resources is another shared priority with the OECD. Improving the efficiency of public spending is one of the key recommendations in the report—and it is also a top priority for the Government.

I would like to mention a few recommendations from the Survey that I find particularly useful. 

• Structural reforms in higher education address Finland’s most significant structural challenges and there are several recommendations in this area: 
  • Imposing tuition fees in tertiary education for second and further degrees at the same level is something to consider.
  • The funding model of higher education institutes should incentivise collaboration across institutions, including greater digital education options.
• Strengthening the central government’s financial steering of wellbeing services counties at risk of insolvency is another, which includes automatically imposing the Ministry of Finance assessment procedure on wellbeing counties exceeding their budget limits. 
• Reducing state-aid to firms that is not productivity enhancing. 

Before I invite Mr. Luiz de Mello from the OECD to present the Survey, I would like to highlight the essential role the OECD plays in shaping and supporting sound economic policy. Through its in-depth country surveys and well-founded policy recommendations, the OECD offers invaluable guidance and insight that help steer our economic strategy and structural reforms in the right direction.

The OECD serves as an external voice of reason—and it is one we should listen to.

Once again, thank you all very much—and I wish you an inspiring morning.

Thank you!