JHL comments the finance ministry’s budget proposal: municipalities are going to get a huge bill for employment services reform, thousands of government jobs may disappear
The Ministry of Finance’s budget proposal for the year 2025 threatens to further erode the operations of municipalities, wellbeing services counties and central government. JHL reminds that this cutback policy will not change Finland’s major problems: population ageing and weak growth in productivity.
The Finnish Government’s budget session promises public services misery and cutbacks. This policy, however, does not seem to turn the economy upwards or Finland’s debt burden to a rapid decline, states Trade Union JHL’s President Håkan Ekström.
– Large-scale spending cutbacks can eat away the conditions for economic growth in the long run. Rapid accumulation of Finland’s debt is also not going to end in the next years. The only thing that is certain is that if things go on like this, public services will be gnawed away piece by piece, Ekström underlines.
The operations of municipalities, wellbeing services counties and central government are in danger of further erosion in 2025. The Government is carrying out its central government savings programme of hundreds of millions of euros in the budget session.
– Agencies will have to make savings very quickly. That can lead to termination of up to 4,000 employment relationships, Ekström says.
As for municipalities, they will get additional expenses when employment services move to their duties. It is estimated that the financing of this reform is 100 euros short. At the same time preparations for reforming the allocation of central government transfers to municipalities are underway, and the impacts of that reform are not yet known.
Wellbeing services counties have had to find savings constantly since they started to operate in 2023. The population is getting older, financing is meagre, and regions do not have the right to levy taxes. Savings do not ease staff shortages, let alone improve services.
The budget proposal for the next year also contains many cutbacks that have little effect on the state finances. For example, the Government intends to remove the obligation to create individual equality promotion plans in early childhood education and care units. The estimated savings of this change are 44,000 euros. This is a negligible sum in the state budget, which is in total 88.1 billion euros next year.
The budget proposal also continues to further cripple opportunities for education and training for adults. The Government intends to slash the funding of The Service Centre for Continuous Learning by nearly 5,7 million euros. Among other things this centre funds working-age education and training that is shorter than full degree studies.
See the end of this article for a longer list of cutbacks that are too small to have much impact on the budget.
– Key problems for Finland include an ageing population and slow growth of productivity. Cutbacks will not solve either of these. Finland should return to a model where growth is founded on domestic demand. This is a recipe that has worked before, stresses Special Advisor Samuli Sinisalo.
Trade Union JHL has suggested fairer alternatives for the cutbacks for instance in a statement that was published before the Government’s spending limits session in spring 2024. JHL proposes saving money among other things by cancelling the increasing of reimbursements from Kela for private medical care.
JHL would increase the government revenue with fair and just measures, including reforming the taxation of dividends of non-listed companies and tightening the progression of capital income taxation. The minimum limit for solidarity tax on wealth should be restored back to its 2023 level.
More information:
President of Trade Union JHL 040 8282 865
Special Advisor Samuli Sinisalo 040 7050 398
Appendix: Table of selected reforms in the Government’s draft budget
| Article | Measure | Estimated cost impact |
| 29.01.04 | Cutback for The Service Centre for Continuous Learning | 5,678,000 |
| 28.90.30 | Removing equality promotion plans from day care centres | 44,000 |
| 32.30.41 | Ending the discretionary government grant for Työkanava Oy | 5,000,000 |
| 25.01.27 | Cutback in the truth and reconciliation process of deaf people | 580,000 |
| 28.10.01 | Cutback in the funding for prevention of underground economy | 2,000,000 |
| 28.30.01 | Savings in the operating expenditure of Statistics Finland | 554,000 |
| 28.89.31 | Excluding medical certificates for a driving license from public health care services | 5,000,000 |
| 33.01.08 | Replacing some of purchased prisoner health care services with internal production | – 2,000,000 |
| 33.03.04 | Savings in the operating expenditure of the Finnish Institute for Health and Welfare | 750,000 |
| 29.80.50 | Cutback in the grant for book gift programme Lukulahja lapselle | 350,000 |
| In total (net) | 17,956,000 |
This news article has been corrected on 5 September 2024: The appendix stated earlier that the operating expenditure of the Finnish Climate Change Panel will be cut. A cutback will affect the same budget article, but not the funding of the Climate Change Panel. The amount of the cutback for the Service Centre for Continuous Learning has also been corrected.