The Ministry of Finance has a proposal to cancel the planned budget cuts in research and development funding, Minister of Finance Annika Saarikko (Cen) announced Monday.
The Finnish ruling parties are due to start budget framework negotiations at the beginning of next month.
According to figures provided by the Ministry of Finance, the proposal would increase investment in the sector by € 300 million from the levels agreed last spring.
"I consider it justified, because at the moment it would be madness not to invest in growth," Saarikko told reporters at a press conference on Monday afternoon at the Helsinki Estates House.
In last year’s budget negotiations, the government decided on permanent expenditure savings of EUR 370 million from 2023 onwards, which would require cuts of EUR 35 million in the science sector.
Saarikko added that the size of the total savings will remain unchanged, but the cuts will be reallocated.
The decision was influenced by the commitments made in the report prepared by the cross-party parliamentary RDI working group, according to which all parties wanted to continue investing in Finland’s research and development field.
The working group published its report late last year.
"As part of the solution, I consider the introduction of a tax deduction for research and development to be justified. Preparations are ongoing, but no political agreement has yet been reached." The archipelago said.
Budget planning for uncertain times
Next month’s budget negotiations are likely to take place against the background of the war in Ukraine, and government spending is expected to increase in Finnish society as a whole.
Saarikko stated that the additional financing of the Defense Forces will be covered by additional budgets for the rest of the year and will also be included in the budget framework for the coming years.
Other security costs and effects of the war may also need to be considered, the minister added.
The government has already set aside around € 300 million in emergency state aid to alleviate the agricultural crisis and improve security of supply for domestic food production.
The ministerial working group set up because of the war in Ukraine will discuss the challenges of the transport sector at its meeting on Tuesday, Saarikko said when the sector faces a sharp rise in fuel prices.
"The Ministry of Finance, the Ministry of Transport and the Ministry of Economic Affairs and Labor are currently exploring ways to support the transport sector. Personally, I believe that the distribution obligation and the temporary discounts on it could be one of the justified means," The archipelago said.
The Finnish Transport and Logistics Association SKAL has estimated that the complete abolition of the distribution obligation would reduce the price of a liter of diesel by about 30 cents.
The purpose of the distribution obligation is to instruct companies selling fuel to mix biofuels with petrol and diesel. The obligation aims to reduce emissions and its share has been growing steadily every year.
Saarikko also stated that the changes in the distribution obligation do not jeopardize Finland’s climate goals, but the initiative could be taken forward in other ways, for example by raising the obligation after the current crisis.
Source: The Nordic Page