Prime Minister Juha Sipilä
Prime Minister’s statement on the Government policy in 2017 and the most important proposals to be submitted to Parliament
(Check against delivery)
Madam Speaker, Honourable Members of Parliament,
The Government’s long-term vision is crystal clear. According to the Government Programme, ‘In 2025, Finland is an inventive, caring and safe country where we all can feel important. Our society is based on trust.’
The Government’s objectives are very clear too: During the government term, the employment rate will have risen to 72%, the number of people in employment will have grown by 110,000 and public finances living on debt will have ceased by 2021.
Finland’s first-ever strategic Government Programme is just what it claims to be: a vision and objectives that are clear. But the means can, and indeed should be tweaked, so that we don’t lose sight of the objectives.
In the Opening of Parliament, the President of the Republic noted that we cannot leave things undone and that there are no easy solutions. He also said that we, the Members of Parliament, bear great responsibility. The world around us is in turmoil and we must get our domestic domain in good shape.
It was in bad shape in 2015, when this Government stepped into power. Things had been left undone for a long time.
We set out to tackle the EUR 10 billion sustainability gap on three fronts: EUR 4 billion in savings, EUR 4 billion in structural reforms and EUR 2 billion in measures to boost employment.
Of the main reforms, the pension reform is now in place. The health and social services and regional government reform is progressing in Government, and will be submitted to Parliament in the spring. But there is still work to be done in shedding costs in the public sector. Of the EUR 4 billion in savings, decisions for an estimated EUR 3,96 billion have already been reached.
The years-long downward spiral in the economy is now back on an even keel. A shift has taken place. The latter part of the year, in particular, employment prospects will be strong. Government debt grew by only EUR 2.5 billion last year. There are particular reasons for this, but it is a fact that according to provisional data, the government debt-to-GDP ratio has not increased at all. My preliminary estimates indicate that the deficit will also be smaller than originally budgeted.
Moreover, local government finances increased by EUR 450 million last year, and we are now close to the target level set for the government term.
The Competitiveness Pact and Government measures are taking effect. We have been receiving good news from different parts of the country. Businesses are making investments and bringing people into their payrolls. And even long-term unemployment is now gradually diminishing. With this Government in charge, confidence in Finland has been restored.
It is imperative to stay on the course of reforms and job creation so that confidence can be maintained. The EUR 4 billion in savings decisions have now been made. However, as I’ve said a number of times, we have pledged to reallocate resources, bring about structural reforms and create more jobs, so that there will be no need for more savings.
An employment rate of 72 per cent is a tough target but not an impossible one. There is no reason why we shouldn’t be able to achieve it when employment rates in Sweden, Denmark and Norway are in the range of 75 per cent. In fact, the employment rate in Pohjanmaa in Finland has already risen to about 75 per cent. In Åland it is already over 80 per cent.
If the whole country’s employment rate were 80 per cent, public finances would be more or less in balance. And if Finland’s employment rate were the same as in Åland, our sustainability gap would be virtually non-existent. And we would be paying off our debt at a fast rate.
Key questions in the government spending limits discussion involve ways to reach the target employment rate and to improve the framework in our systems of education, research and innovations. The goal is that both our competencies and RDI conditions are good. Better job prospects are instrumental in curbing the polarisation trend, although new measures are warranted too.
This spring Parliament will be discussing reforms of historic proportions in public services and public administration. The Government will shortly be presenting its proposal for a health, social services and regional government reform. The reform will strengthen democracy and civic participation and renew public services by transferring the duties of some 350 public sector organisations to 18 counties governed by elected county councils. This means administration will be streamlined and more efficient.
The health and social services reform has been underway for four parliamentary terms already. Four times in the past 24 months the Constitutional Law Committee of Parliament has underlined in its statements that the reform is essential and urgent from the point of view of fundamental rights. We need to see Parliament taking decisions on the reform so that we can safeguard services for the Finnish people and bridge the sustainability gap in public finances. It is time for decisions, not for new models.
The new counties will be multi-professional. Besides health and social services, they will be in charge of 24 other duties, including rescue services, environmental health, and promotion of employment and growth. Administration will be overhauled to simplify it: the division of duties between municipalities, counties and the state is based on the Constitution and on economic theories about which operators can manage each matter most efficiently.
The draft act on clients’ freedom of choice introduces a Finnish model that shifts resources from the current relatively expensive specialised and intensive services to services provided close to people. Everyone in Finland will be able to choose which services they use, irrespective of their financial means.
This spring Parliament will also discuss a major reform in vocational education and training, reshaping all legislation, financing and qualifications related to vocational education and training. The aim is to guarantee that everyone who has completed comprehensive school has a place in upper secondary education and to reduce the number of students who discontinue their studies.
Adults in working life will have opportunities to develop their skills. There will be less bureaucracy, and more cooperation between educational institutions and working life as well as more opportunities for on-the-job learning. A new training agreement will be introduced to pave the way to working life.
We are currently preparing a proposal that would allow higher education institutions to pursue more extensive education cooperation than is possible at present.
Regulations governing postal services will be reformed by making the delivery and collection obligations for universal service products more flexible and by revising the requirements for the speed of delivery of letters. These legislative amendments will make it possible to introduce new kinds of market-based service concepts and digitalisation potential to postal deliveries. This will make it possible to deliver newspapers five days a week in sparsely-populated areas, as is the case at present.
We are making good progress in harnessing digitalisation. Excess bureaucracy is swiftly being dismantled. Piloting and experimenting is still ongoing: we will submit a proposal on a language teaching experiment in comprehensive schools and pursue our efforts to remove barriers to education export. We are proposing regional experiments on public employment and business services.
A parliamentary monitoring group will be established for revamping the financing of the transport network and for addressing the repair backlog. What we need now is to take steps beyond the work of the previous government’s parliamentary group and introduce concrete solutions. We need solutions not only to reduce the backlog in repairs but also for long-term road network development, for meeting our climate targets and for promoting digitalisation.
We will be publishing seven government reports in the course of the spring. The report on defence policy will be out this month, and it is concise and realistic. To make sure our independent national defence system remains credible over the next few decades, we need to make commitments to extensive materiel procurements extending over several government terms. These large materiel procurements extend from 2019 to 2031. This does not mean that these procurements are being balanced against services and benefits. This view is also shared by the parliamentary group chairpersons.
Parliament is already discussing the extremely ambitious energy strategy, where we propose that Finland discontinue the use of coal and halve the use of imported oil. The Government will start implementing this ambitious energy transition in the spring. We will expand our climate policy targets and tools for example in the first-ever climate plan required under the Climate Change Act. We will be submitting the plan to Parliament in the spring.
We feel concerned about the state of global politics. The world is full of unrest. The referendum in the United Kingdom gave a majority vote for exiting the European Union. In the United States, the people voted Donald Trump for President. Finland respects these election results.
We know, however, who we are and where we stand. We build bridges and break down walls. We are not naive about threats, but we are not defiant either.
Among friends you can also disagree on things. It is only natural and should not be seen in any way as alarming.
The century-old Finland is a country that defends international law, fundamental rights and human rights. Finland helps those in need, Finland tirelessly defends gender equality and the rights of women, Finland stands by the common climate policy decisions. Finland wants to see a Europe and European Union that remain socially, economically and politically strong. Finland defends rules-based free trade. We believe that constructive dialogue is possible even where there is disagreement. We seek solutions to global crises and we promote dialogue. We work actively amid crises. And we will reinforce our cooperation in these areas.
The Government Report on Finnish Security and Defence Policy dating back to last summer described the operating environment as follows: "The operating environment of foreign and security policy, both in the immediate vicinity of Finland as well as globally, is in an intense state of flux.
We must be able to see beyond individual persons, decisions or governments and beyond our immediate geographical neighbours.
Much is happening even in areas close-by. This year there will be several European elections, and few are willing to predict the outcome of these elections. Election campaigns, attempts to influence them and their outcomes can have significant implications for our operating environment.
The debate about the fight against terrorism is expected to escalate this year. However, there is a broad consensus on the basic approach to counter-terrorism: We must continue on a broad international front in our efforts to fight against organisations such as ISIL. It is important to make sure this does not create more unrest in the Middle East and North Africa, as this would only increase human suffering in the region. It would also put more pressure on people to risk a dangerous voyage to Europe, for example.
The future of the European Union was discussed in serious tones in the Informal Meeting of Heads of State or Government in Malta last week. In the meeting, I proposed we adopt a pragmatic via media. In other words, no re-opening of the EU treaties, no new steps into deeper integration, and no renationalisation schemes.
The EU has failed to deliver on its promises and implement its decisions efficiently. We need to place greater emphasis on implementation. Legislative packages that are important for us include the development of the internal market and climate and energy policies. Finland supports deeper defence cooperation in the EU. We also wish to retain close relations with the United Kingdom after Brexit.
This year marks 100 years of independence in Finland. We have many reasons to celebrate. Finland ranks among the best countries in the world by many standards and indicators. So let us be grateful and proud of it. But let us not forget those in Finland who are struggling under the pressures of our times. There is still work to be done. We have been entrusted in many ways with the fate of our nation. We want to be worthy of that trust, equipped with both humility and determination.