Government proposes amendments to 2026 budget proposal

On Thursday 20 November, the Government submitted its proposal to Parliament to amend the budget proposal for 2026. It includes proposals to launch new transport projects and to support Ukraine. The proposal will decrease the revenue estimate by EUR 189 million and increase the requirement for appropriations by EUR 455 million.

Government investment programme

The Government proposes new budget authorities and appropriations of approximately EUR 303 million for its fixed-term investment programme. Of this, appropriations allocated to 2026 amount to about EUR 98 million. The proposal will increase the budget authorities and appropriations of the investment programme to EUR 4.2 billion in total. As a whole, the size of the investment programme will be slightly below EUR 4.6 billion, of which around EUR 0.3 billion will be funded within the scope of the spending limits and the remainder primarily with income from assets.

As part of the investment programme, the Government proposes to launch the following transport infrastructure projects:

• A budget authority of EUR 199 million and an appropriation of EUR 10 million are proposed for the implementation of the Liminka–Oulu double track.
• A budget authority of EUR 18 million and an appropriation of EUR 2 million are proposed for improving main road 4 at Vestonmäki (Joutsa, Toivakka).
• An appropriation of EUR 3.25 million is proposed for the implementation of the Kupittaa deck project.
• An appropriation of EUR 2.5 million is proposed for the plan of Hämeenlinnanväylä–Tuusulanväylä on highway 152 (ring road IV).
• An appropriation of EUR 0.4 million is proposed for the plan of the Vuohimäki interchange project on main road 51.

The Government has also decided to include in the investment programme the investment agreed in the mid-term policy review session in spring to raise the level of education as well as projects to improve the continuity of care in wellbeing services counties. In addition, investments in artificial intelligence and digitalisation that will improve the productivity of public administration will be included in the investment programme. In total, these projects will increase the need for appropriations by EUR 150 million, which will be funded by using state assets in a manner that will not increase borrowing. The measures will be targeted as follows:

• A one-off increase will be made to the intake of higher education institutions in 2026. Approximately EUR 11 million is proposed for the increased intake and related student financial aid expenditure for 2026 and around EUR 44 million in total for 2026–2028. The new study places will be allocated for qualifications in fields supporting economic growth, such as nuclear technology and energy technology. 
• For graduates of upper secondary education who have not been admitted to a higher education institution, the Government will introduce a free 30-credit study voucher at an open university or an open university of applied sciences. For this purpose, EUR 18.6 million is proposed for 2026 and a total of approximately EUR 56 million for 2026–2028.
• EUR 40 million is proposed for fixed-term development projects focusing on personal doctor, personal care team and self-employment models in wellbeing services counties for 2026. At least half of the appropriation would be used for new development projects based on a self-employment model.
• An increase of EUR 10 million is proposed for artificial intelligence investments in 2026 for the expenditure of the Ministry of Finance to develop its procedures and improve digitalisation.

Investments in support for Ukraine and in transport

An appropriation of EUR 100 million is proposed for Finland’s participation in NATO’s Prioritized Ukraine Requirements List (PURL), which would fund defence materiel purchases from the United States to support Ukraine. In addition, an increase of EUR 5 million is proposed for civilian material assistance to Ukraine and its transport costs.

A budget authority of EUR 109 million and an appropriation of EUR 22 million are proposed for the implementation of the first stage of the Tampere–Orivesi project on main road 9 between Alasjärvi and Käpykangas. 

An appropriation of EUR 10.6 million is proposed for the procurement of a new icebreaker, as the budget authority to procure it is included in the third supplementary budget for 2025.

Meanwhile, an increase of EUR 8.9 million is proposed for purchases of air transport services.

An appropriation totalling EUR 7 million is proposed for the capitalisation of Airport Rail Ltd and East Railway Ltd to fund project planning costs in 2026. This appropriation is a repayment of previously cancelled appropriations.

EUR 1.9 million is proposed for launching passenger rail traffic between Tornio and Haparanda and EUR 0.8 million is proposed for passenger rail traffic between Helsinki and Hanko. The increases would be implemented as a transfer from appropriations for basic transport infrastructure management. 

Specifications to decisions made earlier

It is proposed that the EUR 7.8 million reduction in business subsidies in the branch of government of the Ministry of Education and Culture targeted at e.g. the production subsidies for the film industry be cancelled and mainly reallocated. The following savings are proposed to compensate for this:

• Savings totalling EUR 2.9 million are proposed for the funding of universities and universities of applied sciences.
• Savings of approximately EUR 2.4 million are proposed for developing central government procedures and digitalisation.
• Savings of EUR 1.2 million are proposed for the building construction of the Ministry for Foreign Affairs.
• Savings of nearly EUR 0.4 million are proposed for grants promoting the digitalisation of comprehensive school education, early childhood education and care, and liberal adult education. 

It is proposed that the authorisation of EUR 100 million to capitalise Finnish Industry Investment Ltd be turned into an appropriation of EUR 50 million.  

It is proposed that government funding for the Social Insurance Institution of Finland’s discretionary rehabilitation activities be reduced by EUR 2.34 million.

The transition to the so-called Norwegian model of child home care allowance will not enter into force at the beginning of 2026, which will reduce the required appropriations by a total of EUR 1.7 million.

Other key changes and appropriation increases

It is proposed that the tasks of Government communications be centralised and transferred from the ministries to the Prime Minister’s Office as of 1 July 2026. It is proposed that a total of EUR 5.3 million be transferred from the operating expenses of the ministries to the operating expenses of the Prime Minister’s Office in 2026, which corresponds to half of the annual appropriation to be transferred.

A budget authority of EUR 10 million is proposed for the maintenance, renovation and development of facilities at Paimio Sanatorium. The authorisation would be partly conditional on corresponding private investments and would result in an appropriation requirement of EUR 1.5 million in 2026.

It is necessary to supplement the overall assessment of R&D funding of the actual budget proposal, as funds will be transferred in part to a new defence theme in line with the amended programme of EU structural funds. For this reason, a budget authority of EUR 37 million is proposed for the Geological Survey of Finland to implement the research infrastructure of the Mintec pilot plant.

It is proposed that EUR 12.8 million be transferred from research and development grants to be used for innovation support in the shipbuilding industry.

It is proposed that EUR 3.9 million be allocated to the Finnish Supervisory Agency for a national priority procedure for the processing of permits for green transition investment projects, for a priority procedure for the processing of permits for certain EU strategic projects, and for acting as a coordinating authority.

EUR 2 million is proposed for measures to mitigate sudden structural change.

An increase of EUR 1.5 million is proposed for the operating expenses of the Office of the President of the Republic.

Meanwhile, an increase of EUR 1.5 million is proposed for expanding land consolidation activities.

An increase of EUR 0.84 million is proposed for measures to prevent and combat the spread of African swine fever.

An appropriation transfer of EUR 0.8 million from defence materiel procurement is proposed for the National Defence Training Association for training serving military capabilities. 

As part of the implementation of the programme for eastern Finland, an appropriation of EUR 0.7 million is proposed for investment and development projects of SMEs in the Kymenlaakso and South Karelia regions (this budget authority is included in the third supplementary budget for 2025).

Other factors explaining increased appropriation requirements

The Government proposes that the appropriations for the EU Recovery and Resilience Facility (including the REPowerEU package) be increased by EUR 106 million in total for 2026, for example due to changes in the payment schedule. This amendment to the budget proposal also includes some other changes to the timing of appropriations. 

An increase of EUR 23.6 million is proposed for student financial aid. The increase is due to the increased use of student financial aid and the exemptions from the repayment of student loans under the state guarantee.

Revenue estimate to be decreased by EUR 189 million

In total, it is proposed that the revenue estimate be reduced by EUR 189 million compared with the budget proposal. It is proposed that the tax revenue estimate be reduced by EUR 25 million, which is largely due to the postponing of the entry into force of the tax increase for soft drinks. It is proposed that the tax increase enter into force on 1 April 2026 instead of the previously proposed 1 January 2026, which will reduce the tax revenue for 2026 by EUR 28 million.

The Government proposes to reduce miscellaneous revenues by EUR 164 million. This is largely explained by a decrease of EUR 75 million in revenue from the auctioning of emission allowances and a decrease of EUR 158 million in reimbursements from the European Peace Facility in 2026 as a result of a change in timing. On the other hand, it is proposed that the estimate of tax-related interest income be raised by EUR 51 million.

Net government borrowing to increase by EUR 644 million

The Government proposes increasing appropriations for 2026 by EUR 455 million to approximately EUR 90.8 billion. Taking into account the changes in appropriations and revenue estimates, the proposal will increase net government borrowing by EUR 644 million. In all, the deficit of the government’s on-budget entities in 2026 is expected to total nearly EUR 9.3 billion. The deficit will be reduced by around EUR 2.3 billion on a non-recurring basis by entering the remaining cash receipts of the National Housing Fund as revenue in the Budget in connection with the dissolution of the Fund. This will not reduce central government or general government indebtedness. Without this amount being entered as revenue, the deficit would be about EUR 11.6 billion, which will be covered by taking out more debt.

Inquiries: Mikko Martikkala, Special Adviser to the Prime Minister in Economic Affairs, tel. +358 295 161 171, and Jussi Lindgren, Special Adviser to the Minister of Finance in Economic Affairs, tel. +358 295 530 514