Govt agrees on 7th supplementary budget

The five-party alliance government on Friday agreed to place the seventh supplementary budget for the year 2020 to cope with the situation following the outbreak of coronavirus.

The increase in appropriations in the seventh supplementary budget proposal amounts to about EUR 1.5 billion and the decrease in revenue is approximately EUR 341 million, said a government press release.

The need for central government’s net borrowing would increase by about EUR 1.8 billion, bringing the estimate of overall central government’s net borrowing to approximately EUR 19.6 billion in 2020.

The proposal will be submitted to parliament on 29 October.

The seventh supplementary budget proposal would allocate funds particularly for coronavirus-related needs, covering additional costs and compensating for loss of income and revenue.

An additional appropriation of EUR 410 million is proposed for introducing a second application round for the government’s fixed-term support for business costs. Appropriations of EUR 140 million were still unused after the first round of applications, and so the total amount now available for this purpose would be EUR 550 million.

A total of EUR 111 million is proposed for securing the level of service in public transport as the virus situation becomes more prolonged.

In the arts and culture sector, EUR 23 million is proposed in compensation for loss of income due to COVID-19, and for securing the continuation of activities.

To offset the drop in revenue from the proceeds of gambling services, the Ministry of Education and Culture and the agencies and bodies within its administrative branch will receive budget funds totalling EUR 175.7 million in 2020. EUR 34.2 million of this is for science, EUR 75.2 million for arts promotion, EUR 48.8 million for promoting sports and physical education, and EUR 17.6 million for youth work promotion. For the Ministry of Social Affairs and Health and the rest of its administrative branch, the total amount for offsetting the situation in 2020 is EUR 142.5 million. For the Ministry of Agriculture and Forestry and the rest of its administrative branch, the corresponding amount, influenced by spending limits, is EUR 10.7 million.

An additional appropriation of EUR 90 million is proposed for the acquisition of COVID-19 vaccines.

For the Border Guard, an appropriation increase of EUR 3.4 million is proposed in order to meet the extra costs arising from the temporary reintroduction of internal border controls. For Customs, a sum of EUR 990,000 is proposed for internal border control associated with combating the pandemic, and for the costs of protective equipment.

An increase of EUR 7.1 million is proposed for covering expenditure on the food allowance for conscripts due to the exceptional arrangements.

By supporting local government finances, the government is safeguarding the funding for basic public services and curbing the pressure for tax increases. To compensate municipalities for the costs of coronavirus testing and tracing, a one-off increase of EUR 350 million in central government transfers for basic public services is proposed. A total of EUR 5 million is proposed for the corresponding costs in the Province of Åland.

In addition, one-off increases of EUR 400 million in central government transfers to local government for basic public services and EUR 200 million for hospital districts are proposed in order to compensate for other costs arising from COVID-19 and loss of revenue.

Based on the Government Programme, an increase of EUR 50 million is proposed in the appropriations for the exclusive ODA budget item administered by the Ministry for Foreign Affairs. Of this increase, EUR five million would be allocated to the World Health Organization’s work to tackle the COVID-19 pandemic in developing countries, EUR 24.5 million to humanitarian aid in response to the humanitarian consequences of the pandemic and EUR 18 million to climate financing. EUR 50 million is proposed for increasing the capital of the Finnish Fund for Industrial Cooperation (Finnfund). This also supports the export opportunities of Finnish companies.

Procurement authority of EUR 240 million is proposed for the Border Guard, entitling the Border Guard to conclude contracts for the acquisition of two new offshore patrol vessels. An appropriation of EUR 120 million is proposed for the current year. Procurement of the offshore patrol vessels will have a significant effect on domestic employment.

The supplementary budget proposal also includes appropriations for transport projects.

An appropriation of EUR 300 million is proposed for the capitalisation of Ilmastorahasto Oy (Climate Fund). The purpose of the fund is to provide funding for projects focusing on combating climate change, promoting digitalisation and boosting low-carbon approaches in industry.