2019 draft budget for Ministry of Finance
The Ministry of Finance proposes appropriations totalling EUR 17.4 billion for its administrative sector in 2019. This is EUR 223 million more than in the 2018 Budget.
The proportion of these 2019 appropriations paid as discretionary government transfers to local government is 48%, while pensions and compensation paid by central government comprise 29%, EU payments 12%, energy tax subsidies 1.5% and transfers to Åland 1.5%. Of the appropriations under the main expenditure title, the operating expenses and consumption expenditure of government agencies account for 8%.
Central government transfers to local government
The Ministry of Finance proposes a total of EUR 8.4 billion for central government transfers to local government for basic public services, which represents a reduction of about EUR 181 million from the amount in the 2018 Budget.
The decrease in central government transfers is attributable to, among other things, the additional reduction of EUR 29 million in connection with the Competitiveness Pact, a downward adjustment of EUR 216 million in the distribution of costs between central and local government, a drop of EUR 33 million reflecting the decrease in municipal duties, and a transfer of EUR 40 million to the incentive arrangement for digitalisation in local government. The decrease in local government tax revenues is compensated for by increasing central government transfers to the municipalities’ basic public services by EUR 138 million. The extent of these transfers also takes into account the Government Programme and other measures affecting local government spending. Local government spending is reduced by, for example, the regional concentration of specialised medical care and the savings generated by the changes in informal and family care. There is an increase, however, in the amounts allocated to developing child welfare and family care, to home care for older people, and to home-delivered services for war veterans.
Central government pension expenditure and compensation
A total of EUR 5.08 billion is proposed for pensions and compensation paid by central government. This figure is EUR 129 million more than in the 2018 Budget. The increase is principally due to the volume growth in pensions and the index adjustments made to pensions.
EUR 2.5 million is proposed for compensation under the Military Accidents Act.
Taxation and customs
The Ministry of Finance proposes a total of EUR 582 million for the operating expenses of the Finnish Tax Administration and of Customs. This includes EUR 12 million in operating expenses for the National Incomes Register. In addition, EUR 36 million in variable annual appropriations is proposed for interest costs associated with taxes and tax rebates.
Regional government, health and social services reform
The Ministry of Finance proposes that an appropriation of EUR 213 million be allocated for preparation of the regional government, health and social services reform. This funding is allocated to
- reform preparations and county and interim governance costs
- managing change
- development of, and changes in, information systems and information management
- establishment and operation of the counties’ joint service centres.
Statistical services, economic research and register management
The Ministry of Finance proposes a total of EUR 87 million for statistical services, government economic research and register management. EUR 49 million of this is proposed for the operating expenses of Statistics Finland, EUR 30 million for the operating expenses of the Population Register Centre and EUR 3 million for the operating expenses of the VATT Institute for Economic Research. A further sum of EUR 5 million in variable annual appropriations is proposed for expenditure on digital authentication.
Central, regional and local administration
A total of EUR 80 million is proposed for the operating expenses of the Regional State Administrative Agencies and the Local Register Offices. A further sum of EUR 2.5 million is proposed for the costs of the project to establish the National Supervisory Authority.
Services for central government
A total of EUR 37 million is proposed for the services provided to central government. This covers the operating expenses of the State Treasury, the Finnish Government Shared Services Centre for Finance and HR, and the Government ICT Centre, and investment authorisations for Senate Properties. Most of the services will be financed by charging fees on a cost price basis. The State Treasury also provides centralised services for central government in areas such as raising finance and consolidated accounting.
See also: Ministry of Finance proposal for the government budget submission for 2019 (covering all ministries)
Jan Holmberg, Financial Manager, tel. +358 2955 30156, [email protected]