Repeated changes in the mind of the government show that if any future government wants to embark on adjusting the economy through spending cuts, it must withstand intense public pressure.
Previous prime minister Antti Rinne (sd) your line already in government negotiations that “the new government will not cut”. The government of the slope did not make any cuts in practice, if the reduction of EUR 50 million for 2020 is not included in the transfer appropriations left unduly low.
The current Prime Minister also follows this line Sanna Marin (sd) seems to hold on to the last. The Marin government has not made any actual cutting decisions, but only some tax cuts.
Now the government is already reversing its only remotely resembling surgery decisions.
Marin said Thursdaythat the SDP wants the government to cancel the cultural cuts it has already agreed. Funding for arts and culture will decrease by about 18 million euros next year. The reason is the decrease in Veikkaus’ gambling revenues, not the Board’s actual cutting decision.
On the contrary, the spending frameworks agreed by the government banged in the spring when it decided to reimburse Veikkaus beneficiaries for a reduction in income of as much as EUR 330 million next year. It is enough to fill the gap caused by the decrease in Veikkaus’ income, for example, for cultural actors by about 80%.
In the spring, the governing parties considered the agreement a good achievement. Don’t like anymore.
Now the majority of governing parties have changed their minds and nevertheless wants to give full compensation to culture and possibly also to sport, science and youth work next year. That would mean a new increase in expenditure of around EUR 40 million.
Why did the mind change?
Similarities may appeal to the government for two remotely surgery – like decisions that it had already had time to reverse earlier in the fall. The Academy of Finland’s authority to fund new research projects was declining next year due to a decline in Veikkaus’ revenues, but the government dug up the money in a budget dispute.
Police funding for the government, on the other hand, was growing again next year, but police were not happy. It will use up this year the appropriations it has saved from previous years. Therefore, the money available to the police was practically declining next year, and the police launched co-operation negotiations.
The government rushed to pledge an additional € 30 million, and police canceled co-operation negotiations. So at no point was the government cutting from the police, but eventually ended up increasing police funding even more than it planned.
A few increases of tens of millions of euros for culture, science and the police may, of course, be appropriate. Nor will they alone pour out public finances, which are already billions of euros in deficit.
But whatever the reason for the appropriateness of spending the money, the pounding of the government might seem special.
So far, the government has appeared to be reversing its only cuts, even recalling its decisions one by one once public pressure has risen.
Government agreed in the spring framework debate to make expenditure adjustments for 2023 for EUR 370 million. The actual decisions on the surgical sites are scheduled to be made next year.
Judging by recent events, the government may still back down from these austerity plans as well. The cuts would take effect just before the parliamentary elections.
Vice-Chairman of the SDP Matias Mäkynen flashed the recent cancellation of surgery plans. He made it a condition for the Minister of Finance Annika Saarikon a (central) proposal to reduce income taxation during the elections could be implemented.
In any case, the heated debate on cuts of a few tens of millions of euros shows the political difficulty of spending savings. If any future government wants to try to balance public finances with billion-dollar spending cuts, it will likely have to withstand intense public pressure.