Government submits second supplementary budget proposal for 2025 to Parliament

The Government submitted its second supplementary budget proposal for 2025 to Parliament on 28 May. The supplementary budget proposal includes investments in preparedness and transport projects, among other things.

The supplementary budget proposal includes an increase of EUR 757 million to the requirement for appropriations and a decrease of EUR 187 to actual revenues. Together, these will increase the central government’s net borrowing requirement by EUR 944 million, with net borrowing expected to total around EUR 13.2 billion in 2025.

New investments in internal and external security

The Government proposes additional funding of EUR 35 million for the Finnish Defence Forces to raise the standard of maintenance and repair of materiel across all services. An additional appropriation of EUR 15 million is also being proposed to boost the ability to receive support from Allies.

The proposals include an approximately EUR 130 million increase to the maximum amount of the 2025 procurement authority for defence materiel (PVKEH 2025) to be used for the procurement of explosives in 2025–2037. The maximum amount of the Squadron 2020 procurement authority is proposed to be increased by EUR 78 million to cover the additional costs caused by the delay in the start of construction.

The Government also proposes that additional appropriations related to the replacement of defence materiel supplied to Ukraine be included in the Defence Forces’ procurement authority for supporting Ukraine (UKR 2023), the total amount of which would increase by approximately EUR 197 million. The costs of replacement procurements will be incurred in 2024–2032.

The Government proposes EUR 21 million of additional funding for the development of civil defence. The proposals include an additional EUR 6 million of funding for emergency warnings and the development of the public warning system. In addition, EUR 6.3 million is proposed to be added to the government grant to the Finnish Red Cross Blood Service.

The proposals include granting EUR 14 million in funding, including budget authorities and appropriations, for the Finnish Border Guard's investment expenditure relating to improving maritime capabilities. In addition, a total increase of EUR 5 million is proposed to increase readiness to respond to oil and chemical accidents.

Funding of EUR 8.1 million is proposed for the Prison and Probation Service of Finland for non-recurring expenditure related to the reform of legislation on weapons offences. The legislative reform will increase the necessary prisoner capacity.

The Government is proposing a EUR 1 million increase for the National Defence Training Association to maintain the level of training activities.

New transport projects to be launched and appropriations for previously decided projects to be brought forward

The Government proposes funding the following projects under its investment programme:

• A budget authority of EUR 20 million and an appropriation of EUR 1 million are proposed for the planning of European track gauge rail links on the Tornio–Haaparanta–Kemi route.
• A budget authority of EUR 17 million and an appropriation of EUR 0.5 million are proposed for converting main road 25 into a median barrier road between Meltola and Mustio. 
• A budget authority of EUR 14 million and an appropriation of EUR 1 million are proposed for the implementation of the main road 27 overpass in southern Ylivieska.
•  A budget authority of EUR 11 million and an appropriation of EUR 1 million are proposed for the improvement of main road 67 and main road 19 between Kivisaari and Atria.
• An appropriation of EUR 4.8 million is proposed for basic transport infrastructure management relating to the improvement of the road links to the battery materials plant to be constructed in Keltakallio, Kotka (main road 357, Hurukselantie).

In addition, the Government proposes adjusting the budget authorities already granted for projects under its investment programme as follows:

• The budget authority for the Tampere passenger rail yard project is proposed to be increased by EUR 20 million to EUR 183 million.
• The budget authority for the main road 68 Edesö–Pietarsaari, phase 3 project is proposed to be increased by EUR 2 million to EUR 9.5 million.
• The budget authority for the Savonia railway Kouvola–Kuopio track section speed and capacity increase project is proposed to be increased by EUR 1.2 million to EUR 4.2 million.

As agreed in the 2026–2029 General Government Fiscal Plan, a total of EUR 190 million of the funding for certain transport projects will be brought forward to 2025 from 2026 and 2027. In addition, a budget authority of EUR 5 million is proposed for the implementation of the improvement of the Ingå fairway project.

Other key changes

As part of its investment programme, the Government is proposing EUR 16 million in funding for reimbursements paid by the Social Insurance Institution of Finland (Kela) to implement and study the impact of the freedom of choice pilot for persons aged 65 and over. The pilot is scheduled to begin on 1 September 2025.

A total of EUR 8.1 million is proposed for research activities supporting Government decision-making for the development of the research and observation system for carbon sinks and reservoirs. As part of climate measures relating to agriculture and land use, a total of EUR 12 million is proposed for strengthening forest growth and carbon sinks and for updating the information systems serving the implementation of forest legislation.

An additional EUR 8 million is proposed for the development of teaching of Finnish and Swedish as a second language, which will implement the national model for the assessment of language skills, development measures of the Finnish National Agency for Education and the practical implementation of measures in municipalities.

An increase of EUR 5 million is proposed to expand the operations of the Finnish model for leisure activities.
The Government is proposing a grant of EUR 2.5 million for the renovation and extension of the Tampere Theatre. In addition, an appropriation of EUR 1 million is proposed for the planning of the renovation of the Finnish National Theatre’s copper roof.

A non-recurring EUR 5 million appropriation is proposed for the operations and development of the Diana 6G Test Centre. 

A total appropriation of EUR 2.6 million is proposed for Metsähallitus’ nature tourism package under the programme for eastern Finland.

A total increase of EUR 2.8 million is proposed for compensation for damage to reindeer caused by large carnivores and for compensation for damage to domestic animals, crops and movable property under the Game Animal Damages Act. In addition, a total of EUR 1.6 million is proposed to compensate fur farms for loss of production. Compensation is paid under the Animal Diseases Act for financial loss that has a significant adverse effect on the livelihood of a farmer due to a public authority imposing a restriction on the keeping of animals.

The interest rate estimate has been revised in accordance with actual interest expenses, borrowing and the development of interest rates. The Government proposes reducing debt management expenditure by EUR 197 million. However, a total increase of EUR 100 million is proposed to the central government’s share of the earnings-related component and basic security component of unemployment benefits. This need has arisen from the deteriorated employment situation. In addition, extensions to the duration of previously budgeted appropriations and other changes of timing will increase the need for appropriations in 2025 by about EUR 200 million.

Revenue estimates take into account Ministry of Finance's April forecast

The Government proposes a total net reduction of EUR 187 million to the revenue estimate. The Government proposes decreasing the tax revenue estimate by EUR 485 million. The new tax revenue estimate is largely based on the macroeconomic forecast published by the Ministry of Finance in April. The changes are explained, for example, by lower than expected taxes received and weakening forecasts of the development of tax bases. An increase of EUR 308 million is proposed for the estimate of miscellaneous revenue.

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

The email addresses of the Finnish Government are in the format [email protected].