Government decision on use of State property sales proceeds
A Government resolution was passed on Friday 26 May 2000 on the use of proceeds from the sale of State property during this government's remaining three years in office (2000 - 2003).
Privatisation proceeds have grown fast. Between 1994 and 1997 sales proceeds ranged between FIM 0.6 and 4.0 billion, by 1998 they exceeded FIM 11 billion, and by 1999 already fetched roughly FIM 21 billion, amounting to about 3% of GDP. Proceeds from equity sales of Sonera Oyj shares have generated around FIM 12 billion in the first half of this year, and the Government is seeking Parliament authority to sell all State shares in the company.
The Government observed that widespread use of State property sales proceeds for purposes other than debt amortisation could put at risk the reaching of Government fiscal policy targets. On the other hand, since sales proceeds will clearly exceed the FIM 2.5 billion budgeted in autumn 1999, the Government could make commitments to single projects of limited size to boost longer-term growth prospects.
The bulk of the sales proceeds from property will be allocated to debt redemption. In addition, the Government intends to accumulate funds in the State Pension Fund faster than planned and is pre-pared to use the counter-cyclical fund of the State where necessary.
Moreover, certain revenue allocations will be made which are calculated to have combined total impact on expenditure of approximately FIM 1 billion over 2000 - 2003. Most of the increase in spending will be used to secure basic funding for universities. The Government is also prepared to provide additional funding to the Academy of Finland and for bolstering service provision in so-ciety by means information technology. Examples of projects that foster the development of the information society are for instance the application of information technology in systems used in social welfare and health care services, the development of information technology content, and the promotion of telematics in communication. Additionally, the Government is committed to encouraging greater use of wood.