Govt Okays €64.2b budget for 2021

The five-party alliance government on Wednesday announced a budget of 64.2 billion euros for the year 2021 with a deficit of 10.8 billion euros amid the difficult economic situation of the country in the wake of coronavirus pandemic.

Prime Minister Sanna Marine made the announcement from a press conference in the afternoon after long negotiations among the components of the government, which highlights boosting employment, advancing climate target, and spending high following the pandemic situation.

“The budget proposal has been readied amidst an exceptionally serious health and economic crisis, and the situation of next year is still uncertain. The total budget aims to be a stimulus,” Marin told the press conference.

According to the budget proposal, the deficit will be 10.8 billion euros, which is 3.8 billion euros higher than the amount originally proposed by the finance ministry.

Earlier, on Monday, the opening day of the negotiations, Finance Minister Matti Vanhanen said next year’s budget deficit will be larger than what the ministry had predicted.

In the proposed budget, spending includes money to reduce daycare fees, an aid package for municipalities and spending on improving employment services and a huge amount of 1.4 billion euros for coronavirus testing.

The newly-elected leader of Suomen Keskusta (Centre Party of Finland), the second largest component of the ruling alliance, Anikka Saarikko said a total of 31,000 to 36,000 new jobs will be added instead of the initially proposed 30,000 jobs.

Saarikko, also the science and culture minister, proposed that the goal should be achieved by spending 70 million euros to improve jobseekers' services and another 70 million euros to reduce daycare fees beginning from August next year.

The budget emphasises carbon neutrality as one of the priority issues as the Vihreä liitö (Green League), the third largest component of the government, is in favour of reducing peat burning for energy.

Vihreä liitto leader and Interior Minister Maria Ohisalo told the press conference that the tax on peat energy would increase by 2.70 euros per megawatt hour.

The budget proposal includes additional resources for combating human trafficking and increasing the number of quota refugees to 1,050, said the Ministry of the Interior in a press release.

The 2021 budget proposal includes a total of EUR 1.568 billion in appropriations for the Ministry of the Interior’s branch of government, including EUR 4.1 million to increase the human resources of the police.

The number of quota refugees is estimated annually, taking into account the total number of asylum seekers.

“Raising the refugee quota is an important way of helping those fleeing war and persecution, and the most vulnerable refugees. This way, we can create safe and controlled routes for refugees to seek refuge and we carry our global responsibility,” said Ohisalo.

The budget also proposes to increase the age for basic education age to 18 at a cost of 22 million euros and to support free secondary education from autumn 2021.

The budget also estimates a revenue of 53.4 billion euros, including earnings of 45.2 billion from taxes.

The total government debt has been estimated to increase to 135 billion euros next year.

The budget proposal for 2021 will be submitted to parliament in a government plenary session on 5 October.