Govt’s mid-term policy to keep on austerity

The government during its mid-term programme review that began on Monday has examined the outlook of country’s economic outlook and approved a EUR 10 billion policy package to cover the sustainability gap.

The spending limits decision currently being formulated by the government will be in line with the expenditure ceiling stated in the government programme, said a press release.

The EUR 10 billion sustainability gap will be covered by EUR 4 billion through direct savings, EUR 4 billion through reforms, in addition to measures aimed at boosting growth and improving employment.

The government also outlined its policy on easing the regulation of pharmacies, and decided on the reform of vocational education and training. In addition, an experiment on the optionality of a second domestic language was sent out for consultation.

The EUR 4 billion savings target is being achieved. Reforms are also delivering the intended cost savings, because the cost cuts in the municipalities, the counties and the public sector as a whole have proceeded according to the plan.

The government fleshed out the implementation of the EUR 1 billion savings target set in the government programme. The Ministerial Committee on Economic Policy outlined one year ago that the savings programme will be extended to the whole of general government finances in addition to the municipalities. The objective is to reduce costs by 2029.

In accordance with the policies now outlined, the action programme to reduce municipalities’ duties and obligations will continue, public sector productivity will be promoted, particularly by utilising digitalisation to the full, and by making more efficient use of premises in the public sector. In addition, an incentive scheme will be created for the municipalities to lower the cost of services.

Measures to be taken in this regard are reduction of municipalities’ duties and obligations, an incentive scheme for municipalities’ public sector premises programmes, digitalisation of municipalities, and central government’s productivity savings.

The combined savings potential of the measures is estimated to be EUR 1 billion. The government will monitor the preparation of measures in its strategy sessions.

The government also submitted a proposal to parliament on the reform of vocational education and training. The vocational education and training legislation and its funding and qualification system will be completely reformed. Learning at the workplace will be increased and a new learning agreement introduced. Bureaucracy in education will be reduced and the freedom of those organising education will be increased. The objective is that the new vocational education and training would respond better than now to the changes occurring in working life and meet future competence needs.

The reform will ensure the implementation of the education guarantee for the entire age cohort completing basic education as well as the regional accessibility of quality vocational education. In addition, a new funding model will promote the reduction of education drop-out rates and improve the effectiveness of education. The new legislation is due to enter into force on 1 January 2018.

The mid-term policy also aims at increasing the number of pharmacies in the country to reduce the red tape associated with pharmacy licences. The equal availability of medicines and pharmaceutical safety will continue to be at the centre of Finnish pharmacy services. The regional pharmaceutical service coverage will be safeguarded with the pharmacy network and pharmaceutical stocks.