Finland's 200th budget - National budget has played a crucial part in the dev...
The Finnish Government's 2009 budget proposal that will be submitted to Parliament this autumn is Finland's 200th budget. The first ever budget proposal in 1810 was completed on May 25, 1810 in the Government Council of the Grand Duchy of Finland. The drafting process took place in the Government Council's economic department, the forerunner of today's Ministry of Finance. The budget was approved by Tsar Alexander I of Russia. Having a budget of its own was crucially important to Finland's growth and development as a state and society.
The first budget came to a grand total of 2,452,241 silver roubles and showed a considerable surplus. At 1,583,332 silver roubles, anticipated state expenditures were just two-thirds of the sum total of revenues. This was largely on account of the fact that many forthcoming expenditures were still unknown at the time of drafting the budget. These included the wage payments in consequence of the abolition of the military of the Grand Duchy and the costs incurred from the establishment of an administrative apparatus.
The budget process enforced the pledge that the Tsar had made at the Porvoo Diet in 1809 that Finland was to have its own national economy. It meant that all the taxes collected in Finland were usedto address national needs, but at the same time that that was all the money available to the public purse. Over time, this economic independence became an increasingly important foundation for Finland's strengthening autonomy. It paved the way to the creation of an autonomous state apparatus and to a distinctive economic development - and ultimately to state independence.
The first-ever budget proposal for the Finnish state was drafted by the Government Council's economic department. Prepared in the Swedish language, the proposal was sent to St. Petersburg, where it was translated into Russian and French, the language in which Tsar and Grand Duke Alexander I issued his letter of approval on 20 July/1August 1810. Since then, the Finnish State budget proposal has been prepared every year.
Created in October 1809, the Government Council was the highest governing body of the Finnish Grand Duchy. In 1816 the Council was renamed as the Senate, which in 1918, following Finnish independence, became the Council of State. At the same time, Government departments became ministries. The economic department became today's Ministry of Finance, one of the key functions of which remained the drafting of state budget proposals.
The budget in 1810 was approved by the Emperor; parliamentary bodies had no say whatsoever on the budget. After the Porvoo Diet of 1809, the Estates were not to convene again until more than 50 years later: it was not until the 1860s that the diet would have the right to contribute to drafting the budget. At the same time, in 1862, the budget became a public document, a summary of which was published in the Statute Book.
The first-ever budget proposal was drafted following the rules for the formulation of the Swedish state budget and primarily the structure of the 1696 expenditure rules. Revenues were grouped into some 40 different categories by type of tax, expenditures in turn were recorded in around 50 items by department and operational purpose. The classification of expenditures and revenues was not a very systematic exercise until the introduction in 1841 of main titles.
At the Porvoo Diet of 1809, the Tsar had promised to govern Finland in accordance with its existing laws and to uphold existing rights of ownership. In spite of Finland's annexation to Russia, therefore, the country continued effectively to follow Swedish law and administrative practice. This was to have a decisive impact on the subsequent development of the Finnish state and society. A key aspect of this development was to have a national economy, a budget of one's own.
The structure and extent of the budget has obviously changed dramatically over the past 200 years. Fundamentally, however, the purpose is still the same: to authorize the Council of State (the Government Council in 1810) to use state funds within the limits set out in the budget.
For further information, contact historian Sakari Heikkinen, tel. 358 9 160 32552 or Counsellor Seppo Tiihonen, tel. 358 9 160 33193, who are writing a 200-year history of the Ministry of Finance.