On 19 November, the government submitted to Parliament its plan to amend the budget proposal for 2021.
The government's plan foresees that the tax revenue will be reduced by 316 million and net government borrowing will increase by 946 million to total 11.7 billion in 2021. Government debt is expected to total approximately 138 billion at the end of 2021.
At the end of October 2020, the central government debt was 123.3 billion euros, according to the State Treasury.
According to the Ministry of Finance, the additional budget proposal will allocate funding for the second phase of future-oriented investments and for increased expenditures arising from Covid-19, among other things.
The government says it is "committed to protecting people’s wellbeing and the ability of businesses" to cope during the crisis, with as few detrimental human and economic consequences as possible.
Changes related to the pandemic
The government proposes extending some of the temporary derogations from the unemployment security legislation until the end of March 2021. An increase of 56.4 million euros is proposed to fund the extensions to the right of entrepreneurs to unemployment security and the raised exempt amount.
The government also proposes increasing the health insurance reimbursement for Covid-19 tests carried out by private healthcare providers. The increase would be financed by transferring 45 million euros from the government transfers and grants item to cover the costs generated to public healthcare and social welfare due to COVID-19.
Other 350 million euros in capital funding is proposed to strengthen the financial position of Finavia Corporation.
An increase of 11.5 million euros is proposed to support flight connections to regional airports.
To relieve congestion in court proceedings, a total of 2.9 million is proposed for courts, legal aid offices and the prosecution service in order to reduce the adverse effects of congestion caused by the coronavirus and to prevent unreasonable delays in processing times.
1.6 million is proposed for the Criminal Sanctions Agency to relieve congestion in the enforcement of sentences.
An additional 5.46 million euros is proposed for the regional state administrative agencies to cover the costs of additional tasks generated by the epidemic.
Future-oriented investments
The government is implementing a one-off programme of future-oriented investments to support the attainment of the government programme’s objectives and ensure the long-term sustainability of general government finances.
In the first phase, which was included in 2020 budget and the General Government Fiscal Plan for 2020–2023, investments totaling 1.4 billion euros were allocated for 2020–2022. In addition, approximately 215 million euros in investments will be allocated from the Housing Fund of Finland in 2020–2022.
On 23 October 2020, the Ministerial Committee on Economic Policy discussed the second phase of financing for future-oriented investments. The supplementary budget proposal allocates approximately 356 million euros for future-oriented investments in 2021. Around 322 million euros in funding for the second phase of future-oriented investments in 2022 will be included in the General Government Fiscal Plan for 2022–2025 and in the budget proposal for 2022.
The second phase of future-oriented investments for 2021 includes 40 million euros for improving the conditions for continuous learning and 80 million euros for recruiting teachers, instructors and support staff for vocational education and training and for increasing the number of teaching hours for untenured teachers.
An increase of 50 million euros is proposed for development cooperation and an increase of 25.5 million euros for nature conservation funding.
25 million is proposed for measures to promote walking and cycling. An increase of 40 million euros is proposed to support the sustainable growth and vitality of regions with a focus on preparedness for sudden structural changes, regional innovations and experiments, regional development funding, funding for the KEINO Competence Centre and support for agreement-based cooperation. An increase of 6 million euros is proposed for the development programme for work and wellbeing at work.
Justice, health, police
An allocation of 2.79 million euros is proposed for the administrative branch of the Ministry of Justice to safeguard the resources for criminal proceedings.
An increase of 4 million is proposed for the costs of introducing the positive credit register.
An increase of two person-years and 140,000 euros is proposed for the operating costs of the National Supervisory Authority for Welfare and Health. The need for additional funding is caused by the increased investments in the monitoring of information systems in healthcare and social welfare.
An increase of 975,000 euros is proposed for the operating costs of the occupational safety and health (OSH) division of the regional state administrative agencies and for the establishment of 15 new public posts of OSH inspectors.
An increase of 225,000 euros is proposed for the implementation of European Green Leaf activities in the City of Lappeenranta. An increase of 750 000 euros is proposed to mitigate tenants’ financial problems.
For the operating costs of the police, an increase of 1.18 million is proposed for the rental of premises, an increase of 1 million euros for the reform of the telecommunications interception system and an increase of 443,000 euros for the expenditures arising from implementing the EU SIS Regulation.
An increase of 290 000 euros is proposed for the rental expenses of the Border Guard.
