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Home BUSINESSGovt plans fresh savings of EUR 370m
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Wed, 06 Apr, 2016 12:06:51 AM
FTimes – STT Report, Apr 6

The government on Tuesday evening finalised the fiscal plan for 2017-2020 that includes fresh savings of 370 million euros.

Prime Minister Juha Sipilä said the 4 billion euro savings target has to be achieved on a strong basis.

The government had to plan the fresh savings plan, because a part of the already agreed savings has not materialised. The first major observation of the earlier agreed spending limit measures was made during the government framework talks held at the prime minister’s official residence of Kesäranta.

The new savings target development cooperation, municipalities, infrastructure maintenance, and sickness allowance, among other things.
“After a few days of tough negotiations, the framework policy has been put together. I am pleased with the performance the government itself has carved out,” Sipilä told a press conference on Tuesday evening.

According to the government, shortfall in the savings target stems from the fact that inflation has been lower than projected earlier. Furthermore, savings directed to the local government will not be implemented in full.

This shortfall will be replaced by measures such as prescribing minimum fee limits for local government social and healthcare services or raising the lower limit of the real estate tax. The aim of implementing these measures is desired to achieve 130 million euros in savings.

The government has also proposed to replace index savings earlier proposed with a 0.85 per cent across-the-board reduction in corresponding expenditure. Following the decision, the net savings in government finance will be about 195 million euros.

The abolishment of exercise duty on sweets will be covered by raising taxes on transport fuels. This means an additional expenditure of 30-35 euros per year for the average passenger car owner.

The party leaders also revealed that they had struck a deal on the social welfare and healthcare reform. However, they did not disclose the details of the agreement.

According to Sipilä, the government is especially focussed on measures to increase employment. The government aims to raise the employment rate from 68 per cent to 72.

The government is not planning any further cuts in education. According to Finance Minister Alexander Stubb, instead, a little over 100 million euro investment will put into education.

According to the government, tertiary education study grants will be standardised with the levels of second education study grants so that the maximum amount of study grant is EUR 250.28 per month. 

The maximum amount of financial aid for students in tertiary education will, as of August 1, 2017, be 1,101.88 euros per month, when the studies are in Finland and 1,260.28 euros per month when the studies are abroad. 

The amount of the government guarantee for student loans will increase to 650 euros per month when the studies are in Finland and to 800 euros per month when the studies are abroad. 

Foreign Minister Timo Soini emphasised that the government is not making cuts because of expenditures incurred as a result of immigration.

The government will also launch 700 million euro transport projects during the spending limits periods. Further planning of fast rail links between Helsinki and Turku has also been earmarked as part of the transport project.

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