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Govt plan bets on education, bio-economy; opposition underwhelmed

Prime Minister Juha Sipilä’s backup plan to help revive the economy is leaning heavily on investments in education and the bio-economy. However opposition leaders were not impressed by the government’s previous decision to cut 600 million euros from next year’s education spending, and restore just 300 million euros in the plan announced Monday night.

Valtiovarainministeri Alexander Stubb (oik.), pääministeri Juha Sipilä ja oikeus- ja työministeri Jari Lindström hallituksen tiedotustilaisuudessa Helsingissä 31. elokuuta.
Prime Minister Juha Sipilä (centre) flanked by Justice and Labour Minister Jari Lindström (left) and Finance Minister Alexander Stubb at the government press conference Monday night. Image: Roni Rekomaa / Lehtikuva

The government coalition appeared as promised Monday evening to unveil its plan for turning around the economy. The announcement followed fruitless attempts to reform the labour market by way of a social contract between private sector employers and employee representatives.

Sipilä’s proposal for "strategic actions" totalled some 1.6 billion euros and covered 26 programmes in five priority areas: employment and competitiveness, education and skills development, health and wellbeing, the bio-economy as well as clean technology, digitalisation and the reforming ways of getting things done.

According to the government’s plan, the vast majority of the proposed allocation – some 600 million euros – is to be split evenly between education and skills development and the bio-economy. The government’s previous budget presentation proposed cutting 600 million euros from education.

Sipilä said the state would spend 100 million euros on digitalisation and dismantling norms, while 130 million euros would be devoted to health and wellbeing programmes. Efforts to boost employment and competitiveness would benefit from 170 million euros. The government’s draft budget previously called for reducing spending on earnings-based unemployment benefits by 200 million euros. Another 600 million euros had already been reserved for road infrastructure works.

The previous government’s white elephant, an ambitious plan to reform national social and health care services, resurfaced in the coalition’s proposal, along with an ongoing programme of municipal reform and a restructuring of local and central government. Sipilä also mentioned so-called "cornerstone projects" which would include items such as defence policy reporting.

Opposition pokes holes in Sipilä's plan

Opposition parties immediately seized on the proposal to invest 300 million euros in education after previous budget proposals to gouge an estimated 600 million euros in funding from the sector. Greens chair Ville Niinistö described the idea as an attempt to "cover up previously agreed cuts". Niinistö charged that the proposals were "far from complete" and accused the government of withholding information on funding for its programmes.

Social Democratic Party leader Antti Rinne said that the coalition’s proposals "offered nothing concrete" and pointed out that previous cuts to education and employment were far larger than the spending proposed in Monday’s plans. He added that while he hoped that the government would succeed in strengthening the economy and employment, it seemed that Monday's proposals would have little impact.

Left Alliance chair Paavo Arhinmäki in turn said that he had been looking forward to concrete ideas and major investments in areas such as education. He pointed out that government had decided to cut allocations for employment in 2016, in spite of the fact that this year’s funds had already run out. He also speculated that government might be selling off profitable holdings to pay for Sipilä’s recovery plan.

Further details to come

PM Sipilä said Monday evening that the 26-point plan would be fleshed out to present 80 different proposals for concrete measures.  He indicated that ministerial groups would provide details based on their areas of responsibility later this week. Information about a number of reforms related to the recovery plan would also be forthcoming this week, Sipilä noted.

The PM stressed that all of the government’s programmes and related reforms had already been scheduled and included selected key measures and intermediary stages. He observed that the cabinet would decide which projects would advance next year during its budget discussions due to take place September 9-10.

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