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Ministers Pekonen, Kiuru and Blomqvist:
Decisions of the government budget session support the prevention and management of COVID-19, safeguard the resources of organisations and strengthen the finances of municipalities and hospital districts

Ministry of Social Affairs and Health 16.9.2020 18.17 | Published in English on 18.9.2020 at 9.59
Press release 211/2021
Budget 2021

According to Minister of Social Affairs and Health Aino-Kaisa Pekonen, Minister of Family Affairs and Social Services Krista Kiuru and Minister of Nordic Cooperation and Equality Thomas Blomqvist, the Government's decisions of 16 September in the budget session support the prevention and management of the coronavirus epidemic, strengthen the finances of municipalities and hospital districts, dismantle the backlog in treatment and services, and increase employment and equality.

The Government will allocate a total of about EUR 2 billion to the Ministry of Social Affairs and Health and its branch of government for managing the COVID-19 crisis. Most of this amount will be allocated to municipalities and hospital districts. The Government also undertakes to dismantle the backlog in treatment and services through a EUR 450 million package of measures in 2021–2023. Since the proceeds from gambling will decrease, the Government will compensate this by reducing the lottery tax and by making use of the non-distributed proceeds in 2021.

Coronavirus testing to become faster and more comprehensive 

The budget proposal for 2021 reserves a total of EUR 1.4 billion for coronavirus testing; EUR 355 million will be reserved for this in the autumn 2020 supplementary budget proposal. With this funding, it will be possible to make testing faster and more comprehensive than before.

The Government is committed to reimbursing municipalities and hospital districts for any costs arising from the epidemic, such as expenditure related to testing and the expansion of testing capacity, tracing of transmission chains, quarantines, treatment of patients, health security of those travelling and a vaccine against the virus. Such costs will be reimbursed in full from outside the spending limits framework as long as the epidemiological situation and the implementation of the hybrid strategy so require. Appropriations will be reviewed, as necessary, in supplementary budgets when more detailed cost estimates for 2021 become available. This will be done in compliance with the principles of full reimbursement.

The Government will reserve EUR 30 million for supporting investment connected with testing technology. The Government also proposes an additional EUR 30 million for 2021 to reimburse municipalities and hospital districts for additional costs related to the strengthening of health security at border crossing points, excluding costs related to coronavirus testing.

Financial support to municipalities and hospital districts

The Government proposes that EUR 200 million be allocated for supporting municipalities and hospital districts. Municipalities and hospital district can use these funds to cover any direct costs arising from the coronavirus epidemic, excluding costs related to testing. The Ministry of Social Affairs and Health and the Ministry of Finance will prepare a package of financial aid schemes for municipalities and hospital districts in a way that the incentives for cost-effective activities are kept unchanged.

Due to the coronavirus epidemic, healthcare is facing a backlog in treatment and social welfare a backlog in services. The Government undertakes to dismantle the backlog in treatment and services by introducing a financing package of EUR 450 million between 2021 and 2023. At the same time, a steering mechanism will be introduced to ensure that the resources within this package will genuinely reduce the backlog in treatment and services.

Financing and activities of organisations, associations and foundations to be secured

The Government proposes a total of EUR 347 million in compensation to organisations, associations and foundations for securing their funding. The need for this compensation is due to the decrease in the proceeds of the state-owned company Veikkaus Oy. The proceeds from gambling will remain lower than forecast in the actual budget proposal for 2021. This compensation will be financed by reducing the lottery tax, by budget funds with a spending limit impact, and by making use of the non-distributed proceeds in the Ministry of Social Affairs and Health and its branch of government. As regards the Ministry of Social Affairs and Health, the decrease in the proceeds of Veikkaus will be compensated with EUR 34.4 million received from reducing the lottery tax and with EUR 114.8 million received from the non-distributed proceeds from gambling.  The non-distributed proceeds were produced when the gambling operators merged in 2017. The total appropriation to be allocated for grants awarded by the Funding Centre for Social Welfare and Health Organisations (STEA) is EUR 362.4 million.

The decrease in the proceeds of Veikkaus will have an impact on the funding of organisations, because the annual support is paid from these proceeds. It is estimated that also in the coming years the proceeds from gambling services will remain lower than at present. Organisations, associations and foundations will continue to be compensated beyond 2021, but in future it will not be possible to compensate them in full. With this in mind, the Lotteries Act will be reformed, and the aim is to submit the relevant legislative proposal to Parliament by June 2021.

Inquiries

Jiri Sironen, Special Adviser, tel. +358 295 163 410 (general questions)
Timo Lehtinen, Special Adviser, tel. +358 295 163 387 (general questions)
Anna Abrahamsson, Special Advisor, tel. +358 295 150 029 (general questions)

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