Government’s new budget plan includes big increase for their own salaries

The draft budget has provisions to boost employment and innovation, achieve low-carbon goals and help foreigners integrate better.

File picture of Finnish government inside parliament, June 2019 / Credit: VNK

The government revealed its 2020 budget proposals on Friday, which included a raft of provisions to boost employment and innovation; to cut carbon emissions and integrate foreigners.

However, the headline-grabbing provision was an extra €5 million to raise their own salary budgets, including the wages of the growing cadre of special advisers who are usually promoted from within the ranks of ministers’ political parties.

“Our draft budget invests in good employment, skills and innovation, and in a low-carbon future” say Minister of Employment Timo Harakka (SDP) and Minister of Economic Affairs Katri Kulmuni (Centre) in a joint statement.

File photo of young people / Credit: iStock

Moving towards 75% employment rate 

The previous government exceeded their target of 72% employment, and the new government now wants to reach 75%. To do this, the draft budget earmarks more than €297 million for public employment and business services, including an extra €17 million for pay subsidies, among several other strategies.

“A wide range of measures and effective co-operation will be required to achieve the 75 per cent employment target set out in the Government Programme. The Ministerial Working Group on Promoting Employment began working in July, and the task forces of social partners that it has appointed may already propose new measures to the Government budget session due in September” says Harakka.

There’s also an extra €10 million being proposed to enhance vocational guidance and career counselling.

Budget boost for innovation & international growth

Recognising that Finland is still falling behind in terms of competitiveness, the draft budget allocates additional funding to underwrite grants and loans given by Business Finland to the tune of almost €480 million.

The government hopes this will encourage entrepreneurs and give startups some financial stability.

“We have fallen behind competing national economies in innovation investment, so the government is investing in higher innovation funding. Part of the increase will be processed as government investment in the future, subject to ongoing detailed preparation” says Kulmuni.

A further €97 million is proposed to cover the operating costs of Business Finland, with extra investment to strengthen the export position of Finnish industries, as well as to promote globalisation and attract top international talent.

Money is also being promised to help small and medium-sized businesses in south and west Finland, where fewer subsidies had been available in the past than in east and north Finland, due to scarce EU funding, the government says.

File picture of planet earth / Credit: iStock

Cash to go carbon neutral 

There’s already been a decision taken to completely stop using coal to generate energy by May 2029 at the latest, but the draft budget hopes to speed that up working faster to decommission Finland’s coal-fired power stations. An extra €110 million is being allocated to underwrite subsidies, with €30 million found to support investments in coal alternatives.

Another million is being allocated to promote the circular economy during 2020.

Integrating foreigners 

The draft budget released on Friday includes a proposal to give €3 million extra to streamline immigrant integration and work permit procedures in 2020. The extra funds would in particular boost the resources of employment offices to identify skills that immigrants have, and also to improve the role of municipal centre and organisations to integrate immigrants.

The government has already agreed to increase the refugee quota to 850 people, and there will be €165,000 more for training and €520,000 earmarked to municipalities to compensate them for integrating immigrants into their local communities.

File picture showing exterior of parliament building / Credit: News Now Finland

Controversial salary boost for ministers’ staff 

The new government came to power in June on the promise of making a Finland a more equitable society.

But it looks like that’s one campaign promise the Social Democrat-led administration might not be sticking to.

The Ministry of Finance proposed a big raise in the money allocated to pay government ministers’ staff, including their special advisers.

The proposed budget has identified €11.5 million for salaries of ministers, secretaries of state and advisers.

This is up €5 million from the previous government, and comes at a time when the five-party coalition of Social Democrats, Greens, Left Alliance, Centre Party and Swedish People’s Party have increased the number of special advisers on their staff.

There are currently 19 ministers, 15 secretaries of state and more than 60 special advisers and their salaries will be going up in some cases by 77%.

The budget also proposes €35.6 million support for political parties in parliament. That’s up from €29.6 million currently. The money goes to help parties pay for items like allowances and travel expenses.