Government reaches agreement on supplementary budget
The Finnish Government has today reached agreement on its proposal for a supplementary budget for 2000. The proposal will be submitted to Parliament on Friday, 19 May. Amounting to a total of over FIM 19 billion, the bulk of the monies go towards central government debt repayments and debt servicing costs. FIM 11.5 billion is earmarked for net debt redemptions. This involves additional costs of over FIM 4 billion arising from debt repayment prior to maturity, which will reduce future interest outlays. FIM 1.7 billion is earmarked for other debt servicing.
The earlier estimate of FIM 2.5 billion for sales proceeds from Government property is revised upwards by FIM 10.4 billion; this is mainly accounted for by the sale of shares in Sonera Oyj. It is proposed that tax revenue estimates be revised upward by FIM 6.5 billion. Income tax receipts account for FIM 5 billion of this increase, the bulk derived from the higher-than-expected corporate income tax revenue in 1999. The Government proposes that estimates for VAT receipts be raised by just over FIM one billion, and for revenue from the motor vehicle tax by FIM 0.5 billion. The FIM 2.1 billion increase in the estimate for dividend yield is primarily due to the exceptionally large dividends of FIM 2.5 billion paid out by Leonia Oyj.
The supplementary budget earmarks over FIM two billion to cover the operational expenditure of administrative branches. Owing to the wage settlement reached earlier in the spring, extra funds would be made available to government agencies and institutions to cover (in most cases) half of the costs arising from the pay rises. However, courts of law, the police authorities, the Prison Administration, the Border Guard, the Tax Administration, the National Land Survey, the National Technology Agency and local labour authorities would get 75 % of their pay rises. It is proposed that the rises be paid in full to universities, the National Board of Customs, the Road Administration, and the Finnish Competition Authority, Regional Environment Centres and to the Environmental Permit Authorities. In total the pay rises are set to increase the operational expenditure of government agencies and institutions by FIM 415 million. It is stressed that the pay rises shall be implemented in accordance with existing agreements so that neither temporary nor permanent staff redundancies or layoffs are required. If necessary, the Government will review the situation in the autumn.
The equity of the state-owned Suomen Teollisuussijoitus Oy (Finnish Industry Investment Ltd) shall be increased by FIM 250 million. In order to secure the competitiveness of the shipbuilding in-dustry, it is proposed that subsidies be granted on orders up to a total value of FIM 6 billion and that the industry is granted an appropriation of FIM 140 million. The Government also suggests that the national pension contributions for private employers in the lowest contribution class is reduced as from 1 July 2000.
A further FIM 100 million will be made available to local authorities in the form of discretionary subsidies in order to safeguard the provision of basic services throughout the country. An increase of FIM 10 million is proposed for the acquisition of employment training services for immigrants, primarily in labour bottleneck areas.
Inquiries: Mr. Timo Viherkenttä, Budget Director, tel. +358 9 160 3105 Mr. Hannu Mäkinen, Deputy Budget Director, tel. +358 9 160 3036