Finland’s Finance Ministry proposes abolishing child benefits — YLE News
Finland’s Ministry of Finance has published around 400 proposals to strengthen public finances, including the complete abolition of child benefits or the discontinuation of supplements for families with several children and single parents. According to the ministry’s estimate, this could save the state about €1.2 billion. The report is to be used in negotiations on forming a new government after the parliamentary elections in April, YLE News reports.
Reducing social spending
Among other options, the Finance Ministry named cuts to basic social assistance, which is a benefit of last resort, and general housing allowance. Changes to the state pension system and the abolition of certain conditions for earnings-related pensions are also proposed.
The ministry is also considering freezing index increases in spending for a specified period, lowering the indexation rate, or abolishing it. This could affect pensions, social benefits, as well as services provided by municipalities and regional healthcare authorities. According to the ministry’s calculations, such changes could produce about €2 billion in savings over the next decade.
Healthcare, education and the state apparatus
The ministry proposes reviewing the network of regional authorities responsible for social and healthcare services, including reducing the number of such regions, of which there are currently 21, and ending round-the-clock operations at emergency departments in certain areas. Mika Niemelä, director general of the Budget Department, noted that reducing the number of regions and the service network is politically difficult and will not be implemented during the next parliamentary term.
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In education, the options named include changing staffing standards, ending additional funding for schools in less affluent areas, and reviewing the decision to extend compulsory education to the age of 18. It is also proposed to reduce the number of ministries from 12 to nine.
Taxes and public debt
The ministry stated that improving the state of public finances requires not only cuts but also additional tax revenue. Possible measures include raising taxes on income and corporate profits, as well as VAT rates. The ministry stressed that the list is not a recommendation to implement specific measures, but contains options for political choice.
According to the ministry, since 2009 the share of public expenditure in Finland’s GDP has exceeded public revenue every year. Earlier, almost all of the country’s largest political parties agreed on adjustments to public finances worth €8–11 billion during the next parliamentary term; only the opposition Left Alliance opposed the agreement.
