VM presents: Double child allowance for everyone in December, increases in benefits, continuation of the reduction in the distribution obligation

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Finance Minister Annika Saarikko describes the Finnish economy as being at risk of a frost. This is how Annika Saarikko described the Ministry of Finance's budget proposal on Thursday. [email protected] at 15:27 (edited at 17:59)

The Ministry of Finance (MoF) has completed its proposal for next year's state budget. Finance Minister Annika Saarikko (center) presented the main points of the proposal at a press conference on Thursday.

The Ministry of Finance's budget proposal is the basis for the government's budget rush at the turn of August and September.

< p class="paragraph">Saarikko told about VM's proposals to improve citizens' purchasing power. One of these means is that the vast majority of benefits would be increased at the turn of the year to match the increase in prices.

The previous level increases of subsidies tied to the national pension index came into effect early in August. Such subsidies include, for example, national pension, labor market subsidy, the basic part of subsistence allowance and study allowance.

As a new method, Saarikko brought up the payment of additional child allowance this year. This would cost the state more than 100 million euros.

– Double child allowance in December for every child in this country, the minister described.

Saarikko justified the action by saying that the purpose of the child allowance is to equalize the cost differences between Finns with and without families. Saarikko said that he also considers the increase for high-income earners to be justified and reminded that the government has already made separate increases for, among other things, single parents and families with many children.

Saarikko pointed out that the increase in prices will not increase the state's VAT revenue much.

An additional carrot for work for over 60s

VM proposes the continuation of the increase in the commuting expense deduction for next year, i.e. the higher-than-usual maximum amount of 8,400 euros would continue. The reduction would remain at least 30 cents per kilometer.

According to the ministry, the reduction of the fuel distribution obligation by 7.5 percentage points should be continued next year.

Saarikko promised that a report on the lowering of the electricity price will be carried out by the time of the government's budget tussle. According to Saariko, it would be good to consider whether the household deduction should be improved for renovations related to energy efficiency.

On Thursday, the Minister of Finance described how to improve incentives for the elderly to work.

VM proposes that the maximum amount of the deduction from work income for those over 60 be increased in steps according to age: those over 60 would receive a 200-euro increase, those over 62 would receive a 400-euro increase, and those over 65 would receive a 600-euro increase in the deduction of earned income.

VM esittää : Double child allowance for everyone in December, increases in benefits, continuation of the reduction in the distribution obligation

Minister of Finance Annika Saarikko will talk about the Ministry of Finance's budget proposal on Thursday. Antti Nikkanen

National debt rises to 114 billion euros

According to Saariko, the state of the Finnish economy should be called the danger of frost. He mentioned that the economic situation has weakened in Finland and in the world, and the risk of a recession is not excluded. Saarikko raised his concerns about the weakening of household confidence.

The final amount of the Ministry of Finance's budget proposal is 79.5 billion euros. Saarikko emphasized that the allocation level will be increased especially by the fact that next year the organization of social and health services will be transferred from the municipalities to the welfare areas, which will receive their funding from the state.

Next year, the overall state funding of the welfare areas starting at the beginning of the year will be around 22, 3 billion euros.

The state budget has a deficit of 6.3 billion euros in the Ministry of Finance's proposal. The budgeted national debt will rise to an estimated 114 billion euros at the end of next year, which is about 52 percent in relation to the gross domestic product.

The interest expenses of the national debt will almost double from the current year to the next year. They will be around 1.3 billion euros in 2023.

Saarikko pointed out that the growing debt service costs are a risk to the sustainability of public finances in the longer term. He reminded that although the deficit of the public finances has decreased, Finland's structural problems are unchanged.

The Ministry of Finance expects the public finance deficit to grow in the coming years due to the aging of the population and low economic growth.

Two billion for security

The Minister of Finance mentioned investments in security as the main items of next year's budget , self-sufficiency and growth. The Ministry of Defense proposes investments of two billion euros in security, of which about one billion would go to the Ministry of Defense's administrative sector and the Border Guard.

VM proposes 56 million euros to improve preparedness for cyber security threats, and almost 220 million euros for security of supply, clean technologies and energy self-sufficiency.

According to Saariko, these measures would include, among other things, energy investments by rural companies, hydrogen projects, energy support, charging infrastructure for electric cars support for housing associations and grants to abandon oil and gas heating in residential buildings.

The Ministry of Interior proposes that 780 million euros would be set aside for helping those fleeing the war from Ukraine and promoting their integration.

Saarikko assured that the Ministry of Interior's proposal for the allocation of police funds would secure the number of 7,500 police officers in the future.

Manpower shortage solutions rihiene

The minister emphasized increasing investments in research, development and innovation activities. VM proposes, among other things, a tax reduction of 81 million euros for research and product development next year. Later, the reduction would be 100 million euros.

Saarikko promised that if Stora Enso builds a factory in Oulu, the government is ready to implement a cross-road project between the port of Oulu and Stora Enso's factory. According to Saarikko, this would be the right kind of growth policy.

Saarikko promised to support eastern Finland, which was particularly affected by the economic effects of the war in Ukraine. In connection with this, the state secretary working group will make its presentation by mid-August.

Saarikko highlighted the fact that Finland's employment development has been good. However, the shadow is the labor shortage, which can also be seen in the functioning of social and health services.

Saarikko emphasized that the cross-administrative working group led by the Ministry of Social Affairs and Health should find concrete measures to solve the labor shortage in the social and health sector by the time of the budget crisis.< /p>

The working group has been operating for a year already. Saarikko could not answer the question about why the proposals have not yet been announced.

Saarikko emphasized the promotion of work-based immigration and mentioned that, for example, Ukrainians who fled the war in Finland might also find workers for the social security sector. He said he believed that care assistants could be utilized more widely than at present.

The government will only discuss the possible reduction of income tax during the budget crisis, and there is no proposal for it in the Ministry of Finance's budget proposal. Saarikko emphasized that the probability of the risk of a recession and the salary decisions in the fall affect whether the income tax deal can be implemented.

Annika Saarikko presented an additional child benefit – even the government partners see a problem in the proposal 4.8. 19:48 Annika Saarikko: Increases in benefits next year, two conditions for income tax 3.8. 16:04 Comment: Inflation is galloping wildly and the people are biting, but the state treasury is thanking 3.8. 10:43 A drastic cut to Kela compensations, reliefs to price restrictions – these are on the table in the budget amendment on 3.8. 11:27

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