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The Finance Ministry’s 2025 budget proposal has been heavily criticised.
Minister of Finance Rika Pra (ps) presented a 12.2 billion euro deficit budget proposal at a press conference on Thursday. Purra said the public finance deficit would be only 600 million less than this year, which would be affected by growing health and social care spending, a weak economic cycle and the long-term impact of some austerity measures.
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Purra said that if the government did not take austerity measures, the budget deficit would reach 16 billion euros.
The government will discuss the proposal during the peak budget period from 3 to 4 September. The proposal will be submitted to Parliament on September 23 and approved in December.
‘Budget proposal is weak’
Finnish entrepreneur economist Petteri Marinen The fact that the budget proposals were very small, despite no new adjustment measures being proposed, illustrates the difficult economic situation.
“The Treasury’s budget proposals are based on weak foundations, which increases the challenge of balancing the national economy. Obviously, when the proposals now presented are based on the economic forecasts for June, the risk of weaker economic development than proposed is clear,” Malinen said in the release.
Malinin said the situation could lead to the government having to make difficult decisions during the peak autumn budget period.
“This adds an element of difficulty, as expectations of economic recovery are largely based on expectations of growth in private consumption. But at the same time, taxes will be tightened as previously decided. Although inflation and interest rates are expected to slow, the tax increase will clearly reduce consumption opportunities and growth. We must remember that next year will be the first year that the government’s fiscal policy is truly tightened.”
SDP representative: “The rich are given special protection by Purra”
Member of the Finance Committee of the Social Democratic Party, the largest opposition party Jonah Lasanen A vocal critic of the Treasury’s proposals, he accused the government of failing to meet employment targets.
“During its term, the government promised to create one hundred thousand new jobs, but according to the latest data, the country’s finance minister said that less than half of these jobs are now available,” Lasanin said in a press release.
“At the same time that the government cut housing benefits for hundreds of thousands of pensioners, it pumped another half a billion into the balance sheet of the healthcare giant. At the same time as delivering the largest one-off VAT increase in history, it also delivered the largest tax cut in history for the minister’s income bracket. Once again, the rich are being given special protection by Purra,” Räsänen continued.
Antti Kekkonen cuts budget
He is also the new chairman of the Central Committee of the Opposition Antti Kekkonen Disappointed with Pula’s budget proposal, Kekkonen said borrowing would accelerate next year and the proposal contained no measures to boost economic growth. Kekkonen criticized the government for taking actions that would slow growth, such as increasing value-added tax and reducing household deductions.
“The finance minister offers many explanations as to why borrowing is accelerating now. I am ultimately interested in measures to double economic growth from forecasts, not explanations. The government seems to lack growth policies that promote employment and entrepreneurship, and much is missing,” he said in the announcement.
Opposition Left Alliance MP Mija Koskelan Believes that the budget proposal exposes the failure of the government’s economic policies.
“For ideological reasons, the government has rejected reforms such as the dividend tax reform and will instead raise everyday costs for low- and middle-income Finns. Adding 1 billion in VAT amid a wave of bankruptcies will leave many small companies and the cultural sector in dire straits,” Koskela criticized in a press release.
SAK accuses government of destroying jobs
The central Finnish trade union organization SAK accuses the government of weakening the welfare state with its austerity measures. According to SAK, the government is now targeting the sick because sickness benefits are being cut, costs for healthcare clients are increasing, medical reimbursements are being reduced, social security funds are being cut, and treatment coverage is being extended.
The early cancellation of adult education support and the reduction of vocational education funding for people changing careers were also criticized by SAK.
“The threat is that in the long term the cuts will erode the supply of skilled labour and employment. As working lives become longer and working lives change, it is important that vocational education chosen at age fifteen can be supplemented with another degree if necessary.” SAK Chief Economist Ilkka Kokolanta Warning in the announcement.
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