The national debt in the budget is 8.1 billion to 146 billion euros by the end of next year, which is almost two billion euros more than the proposal previously presented by the Ministry of Finance.
prime minister Sanna Marin (SDP) argued that budget decisions are necessary to ensure continued public support for Ukraine. He noted that since the situation is affecting virtually every household economically, statements calling for peace at any price have increased across Europe.
“We live in a war economy. The energy war that is going on as a result is affecting every European citizen [Russian President Vladimir] Putin’s actions. And by supporting households, by supporting people, we can guarantee support for Ukraine going forward as well,” he stated.
The government is helping households cope with rising energy prices by reducing the VAT on electricity from 24 percent to 10 percent for the period 1 December to 30 April.
However, the tax reduction alone was found to be insufficient, especially for residents of single-family houses and townhouses. YLE on Thursday reported The government reserves approximately EUR 300 million for an income tax deduction for electricity bills of EUR 500โ1,500 and another EUR 300 million for immediate financial support for low-income earners who do not have the opportunity to take advantage of the tax deduction.
According to the public broadcasting company, the reduction would probably be up to 600 euros and it would be available for four months.
The government has also asked electricity suppliers to transfer the electricity VAT reduction to the invoices they send to their customers and to offer longer payment terms to their customers if necessary.
All families with children must pay the additional installment of the child allowance before Christmas in accordance with the proposal of the Minister of Finance Annika Saarikko (Center). Saarikko repeated on Thursday at a press conference that the additional installment would have no effect on the income support received by such families.
The measure is estimated to cost around 112 million euros.
The government decided to permanently reduce early childhood education fees by around 70 million euros and increase the care supplement for children in private care by 100 euros per month. It also decided to increase several child allowances for social benefits, including the unemployment insurance child allowance by 24โ45 euros depending on the number of children and the child allowance single parent allowance by five euros per month. .
The government confirmed that it will continue to increase the tax deduction for work-related travel expenses by 1,400 euros for 2023.
The value added tax on passenger transport, including taxis and flights, will be removed from January to April. The Taxpayers’ Association has calculated that, according to YLE, the decision will reduce the price of a one-way ticket of 2.8 euros by 0.25 euros.
However, public transport operators are under great pressure to raise prices.
Criticism of the opposition
The opposition parties immediately labeled the budget proposal as an election budget.
Riikka PurraThe chairman of Basic Finns saw that the government is clearly not trying to anger anyone, because the next parliamentary elections are only in seven months.
“The deficit is growing significantly. Of course, it is not surprising that the government, which has not saved anything in its other budgets, will not do so in its final budget either,” he commented to YLE.
Basic Finns have expressed their support for lightening the emissions trading system and introducing an electricity price ceiling. According to Purra, it is strange that the government decided not to intervene in the structural problems of the electricity market.
“In Finland, 80 percent of energy is already emission-free, and its price has not increased. The Finns are not benefiting from it at the moment. In some European countries, demands have been heard for gas prices to be detached from the market,” he pointed out.
Petteri OrpoThe chairman of the coalition thanked the budget proposal for supporting citizens in difficult times and paid particular attention to the reduction of early childhood education fees, but expressed his concern about the acceleration of borrowing.
“I am especially happy that support measures are also targeted at middle-income working Finns – in addition to helping low-income people. In the same breath you have to say that eight billion euros of new debt is a chilling proposition, he said. “The government has pursued a debt-based policy throughout its four-year term, piling debt on top of old debt without prioritizing anything.”
Experts had questioned the merits of some of the announced measures in the run-up to the budget session.
Heikki HiilamoA research professor at the Institute of Health and Welfare (THL) told YLE on Thursday that he is against the additional child benefit because it would be paid to all families with children, including those with high incomes. The measure would therefore be expensive, but it would not be aimed specifically at the families most in need of support.
“If you look at low-income people and poverty in general, it doesn’t target families with children per se. It focuses on single-parent families and single-person households,” he said.
In his opinion, the measures should instead be aimed at the type of heating and the place of residence, as they are the best indicators of whether the household is in need of help or not.
Aleksi Teivainen โ HT