[Finland] Government's last budget proposal focuses on employment and poverty

from Helsingin Sanomat

Finland's three-party coalition government reached agreement on Wednesday on a proposal for next year's state budget. The final sum of the last budget before next year's Parliamentary elections is EUR 40.5 billion.

Prime Minister Matti Vanhanen (Centre) said that the government was leaving a "very strong legacy for the next electoral term". He praised the government's budget discipline.

"The goal of 100,000 new jobs during this electoral term remains", Vanhanen said. So far, about 60,000 new jobs have emerged.

His views were echoed by Minister of Finance Eero Heinäluoma (SDP).
"A balanced and good proposal", he said, reiterating what he saw as the government's good cooperation and sense of responsibility.

The government seeks to promote labour mobility through a grant of EUR 700 for the unemployed who move to another location to take on a job.

Municipalities suffering from economic structural change are to get state assistance totalling EUR 30 million.

The maximum income level for beneficiaries of subsidised ARAVA rental accommodation is to be raised 15 percent to make the scheme more easily available to those with middle incomes. The number of new subsidised apprenticeships for on-the-job training is being increased from 22,000 to 25,000. The proposals are from a list of initiatives that labour market organisations put forward to Heinäluoma.
"All of the central proposals of the organisations are here", he said.

The proposal includes a poverty package of EUR 80 million to help the poorest Finns. Of this total, EUR 40-50 million will come directly from the state budget. The sum rises to about EUR 80 million when money from local authorities and revenue from the Slot Machine Association are included.

The poverty package comprises precise actions targeting specific groups of people, such as families with children, the poorest pensioners, veterans, certain groups of the disabled, and those who care for their relatives. No blanket increases in social benefits are forthcoming.

EUR 115 million are to go to subsidise research and development activities. The money is to come from profits from the sale of state-owned corporations.

Heinäluoma predicts economic growth of more than four percent this year, and employment trends should be strong as well. Earlier in the day the government noted that next year's growth forecast will be revised upward.

The government's budget process appeared to go very smoothly, with hardly any discord among the ministers. According to government sources only the Second Minister of Education, Tanja Saarela (Centre), had pushed for higher spending than the framework agreements would have called for.

Saarela would have liked to see improvements to student benefits, but she did not get support from the other ministers.