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Ministers: Budget plan to slash emissions, reduce deficit, boost labour market and police funding

According to Marin, the cabinet has approved the necessary steps to achieve carbon neutrality by 2035 as stipulated in its programme.

Valtiovarainministeri Annika Saarikko, oikeusministeri Anna-Maja Henriksson, pääministeri Sanna Marin, opetusministeri Li Andersson ja sisäministeri Maria Ohisalo.
Finance Minister Annika Saarikko (Cen), Justice Minister Anna-Maja Henriksson (SPP), PM Sanna Marin (SDP), Education Minister Li Andersson (Left) and Interior Minister Maria Ohisalo (Green) outside the House of Estates. Image: Jorge Gonzalez / Yle
Yle News

Prime Minister Sanna Marin (SDP) announced on Thursday afternoon that the government parties had reached agreement on climate and employment issues, allowing approval of the nearly 65-billion-euro budget blueprint for next year. It includes a deficit of nearly seven billion euros, which is lower than this year.

According to Marin, the cabinet has approved the necessary steps to achieve carbon neutrality by 2035 as stipulated in its programme. She said decisions had been made that will lead to 11 megatonnes of emission reductions in the coming years.

In total, emissions are to be reduced by 14-15 megatonnes by 2035.

Next year's budget will support this shift by financing investments in sustainable energy, research, development and innovation. The cabinet also plans investments in employment services and digitalisation.

The PM said that investments will also be made to boost the availability of skilled labour, including from abroad.

Immigration by skilled workers is to be accelerated by extending two-week fast-track electronic residence permit applications to specialists and start-up entrepreneurs.

The government will extend the national D visa to cover researchers, students and their family members. The national D visa is based on the Schengen Convention, and allows individuals to live in the granting country for up to one year.

Marin said the government will target employment investments to address labour shortages and matching of people with jobs.

Expert evaluation of climate measures crucial to Greens

According to Interior Minister Maria Ohisalo (Greens), it is important for the Greens that the climate package is considered together with independent scientists and experts. This is important for the credibility of the package.

Ohisalo said that the government is committed to making any necessary additional decisions to ensure that Finland is on its way to carbon neutrality in 2035, in accordance with the government's programme.

Left Alliance chair and Education Minister Li Andersson said that Finland would become "the world's first carbon-neutral welfare state".

Ohisalo said that as part of a compromise agreement, the government will carry out a review next March to determine whether the agreed emissions-cutting measures will be sufficient to reach the 2035 goal, based on analyses by the Finnish Climate Change Panel, ministries and research institutes – or whether more are needed.

Mining tax, more funding for police

The legislation adds an obligation for each municipality and region to draw up a climate plan.

"Agricultural emissions will be reduced by measures such as increasing wetland cultivation. Next year, taxes on heat pumps will be cut. We will implement at least one offshore wind power demo project and put funding into the circular economy, subsidising household energy improvements and phasing out oil heating. Altogether half a billion euros in the budget will be devoted to climate measures in Finland," she said.

Ohisalo said that the purchase tax on electric cars will be waived, but usage fees on new electric vehicles will be increased.

Ohisalo said that from the beginning of 2023, a mining tax will be introduced in Finland. The new Mining Act will be presented to Parliament this year.

The interior minister said that police budgets will be raised next year.

Ohisalo added that the government is preparing to increase the number of quota refugees this year due to the situation in Afghanistan. The annual quota is now 1,050 refugees.

Saarikko: Employment rate target close to being achieved

Minister of Finance Annika Saarikko (Cen) said that the government's employment rate target is relatively close to being achieved.

The budget totals 64.8 billion euros, with a deficit of 6.9 billion euros for 2022. That is almost five billion euros less than this year. It will bring the state debt to around 146 billion euros next year.

The purchase of new fighter jets will expand the deficit by about one and a half billion euros, she said.

The Ministry of Finance had to take into account almost a billion euros in unexpected additional expenditures, such as pandemic costs and funding to prepare for the sote healthcare and social services reform.

According to Saarikko, public finances will be balanced if Finland attains an average economic growth rate of 2.25 percent and an employment rate of 78 percent.

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