Finland Times

The government has not succeeded in fiscal stabilisation during the current parliamentary term, said the National Audit Office of Finland (NAO) in its report of an assessment of the electoral term 2011-2014.

According to the report released on Tuesday, the government measures to bridge the sustainability gap have not been sufficient and are far from complete.

Therefore, the next government has to make decisions in this regard as soon as the beginning of its term.

The institution also bemoaned the trimming of municipalities’ obligations, stating that measures have proven difficult leading to the alarming deterioration of municipal finances in the 2000s.

According to NAO, the reduction of municipalities’ obligations by approximately one billion euros is to be completed in the next electoral period.

According to Heidi Silvennoinen, director for fiscal policy audit at NAO, this will require value judgements and political leadership.

Covering the whole public sector expenditure mapping is necessary when the level of expenditure is adjusted to slow economic conditions, said Silvennoinen.

The current government’s major challenge, according to NAO, has been slow economic growth and, for this reason, the economy has had to adjust more than it had been anticipated.

NAO also criticised the country’s tax system which was not simplified following the 2013 spring reform.

The assessment said the tax system has been subject to conflicting pressures and the decision-making related to it has been unpredictable.