Funds for vaccine, unemployment security sought

The government on Thursday submitted the first supplementary budget proposal for 2021 to parliament’s budget-making special provisions to address some needs arising from the COVID-19 pandemic.

The budget proposal tabled proposes appropriations to secure additional COVID-19 vaccine procurements and safeguard critical transport connections, security of supply, and the transport of Finland’s foreign trade as the pandemic continues, said an official press release.

Additional appropriations are also proposed to support the arts and culture sector and for children, young people, and families. An increase in appropriations is also proposed to ensure that the municipal elections can be held safely.

Changes arising from COVID-19

An increase of EUR 70 million is proposed for procurement of COVID-19 vaccine. The increase is targeted at the procurement of additional batches of COVID-19 vaccines and the advance payments needed to secure them.

An increase of about EUR 61 million is proposed for the central government’s share of the earnings-related component of the unemployment benefit and job alternation compensation, and for its share of the basic security component of the unemployment benefit.

The need for an additional appropriation is proposed for unemployment security by three months, i.e., until the end of June 2021, due to the ongoing pandemic. The increase in costs is due to the continuation of the increased exemption amount of the employment benefit and the right of entrepreneurs to receive labour support, among other factors.

An allocation of EUR 23.2 million is proposed to support the operation of cargo and passenger vessel shipping companies. The goal of this additional appropriation is to safeguard Finland’s essential transport connections, security of supply and transport of foreign trade as the coronavirus pandemic continues, and to guarantee regular freight and passenger transport between Southwest Finland, Åland, and Sweden, between Helsinki and Estonia, and between Vaasa and Umeå.

An additional appropriation of EUR 15 million is proposed for meeting the operating costs of the Arts Promotion Centre, EUR 17.6 million is proposed to cover the operating costs of courts, public legal aid, and guardianship districts, the enforcement service and bankruptcy supervision, the Consumer Dispute Board, the National Prosecution Authority and the Criminal Sanctions Agency to cover the costs arising from the COVID-19 situation.

An increase of EUR 1.3 million is proposed to ensure that the municipal elections can be arranged safely under the exceptional circumstances caused by the pandemic.

Several additional appropriations are proposed to support children, young people, and families.

An increase of EUR 10 million is proposed for phasing out oil heating.

Changes in revenue estimates

The government proposes increasing the tax revenue estimate by EUR 415 million based on tax receipt data and the macroeconomic forecast updated in December. Economic activity is expected to develop more favourably than previously predicted. Earned income tax and capital income tax revenue is expected to grow by EUR 207 million more than was anticipated previously.

Based on the most recent trends, the estimate for inheritance and gift tax revenue has been increased by EUR 138 million. Based on tax receipt data, revenue from the asset transfer tax is also expected to increase by EUR 70 million more than projected earlier.