Petteri Orpo's (NCP) government has set itself a primary target of improving the Finnish economy. This means curbing the increase in central government debt.
Finland's national debt has been growing since 2008. According to the European Commission, Finland was the only EU country where the public debt-to-GDP ratio rose last year.
That said, Orpo's National Coalition Party only invited parties to form a new government that pledged to seek a six-billion adjustment to Finland's economy. This target is based on Ministry of Finance calculations aimed at finding a way for Finland to manage its debts and maintain the welfare state's services in the long term.
The government programme published on Friday includes an extensive list of cuts. The new administration is also implementing structural reforms aimed at generating savings. Getting more people into jobs is further expected to boost the economy.
The government plans to both raise and lower taxes, saying it believes that reducing income tax will strengthen employment and, through that, bring some savings and tax revenues.
Finland will see cuts totalling over four billion euros. These cuts are primarily targeted at areas where the government's largest expenditures lie, such as social and healthcare services.
In the long term, spending on social and healthcare services would decrease by two billion euros from current levels. This includes, for example, delaying the tightening of "healthcare guarantees" (access to care) and staffing requirements.
There are also plans to cut social security benefits by 1.2 billion euros. A further 0.5 billion euros would also be cut from expenses tied to indexing.
Structural measures would, according to the government, save a further 1.85 billion. Increasing employment would strengthen the economy by an additional 1.1 billion euros.
Orpo has said the planned cuts won't impact the most vulnerable in society. Social benefits for retirees will not be cut while there will be some increases in support for families with young children. Instead, the government is targeting significant cuts to unemployment benefits, housing allowances and social security benefits. Savings are also planned in social and healthcare services.
Main savings areas highlighted in the government programme:
- Education: €149m
- Social and healthcare services: €2.05b
- Social security and benefits: €1.2b
- Expenses tied to indexing: €519m
- Agriculture and forestry, environment: €78m
- Business, transportation, housing: €228m
- Immigration, development cooperation, defence and security: €226m
- Public sector administration €276m
Some significant savings areas include:
- Enhancing the efficiency of wellbeing service counties: €1.19b
- Benefits tied to the national pensions index or consumer price index (excluding social assistance, pensions, and certain other benefits): €387m
- Housing allowances: €363m
- Staggering employment benefits: €175m
- Development cooperation: €283m
- Improving public sector efficiency: €243m
