Urpilainen promises spending discipline

Minister of Finance would not allow elderly care law to increase state spending

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Minister of Finance Jutta Urpilainen (SDP) feels that legislation that sets a specific number for elderly care personnel must not lead to a significant increase in state spending.
      “We have not gone through any details, but I feel that it is clear that we cannot afford any significant tax breaks or spending increases in this economic situation”, Urpilainen said on Monday, answering a journalist’s question on elderly care.
      Urpilainen is currently holding discussions within her ministry for a national budget proposal for next year.
     
The spending level for the upcoming years was set in the spring when the government agreed on budget frameworks for the coming years.
      Now the government is pushing through legislation on care for the elderly, aimed at setting standards for the level of care offered.
      There is disagreement on how the elderly are to be guaranteed an adequate level of care, and whether or not a mandatory minimum number of care personnel should be included.
     
Minister of Social Services Maria Guzenina-Richardson (SDP) said in the summer that she is in favour of a legally binding minimum for personnel. Hiring additional staff is expected to cost about EUR 30 million. The Ministry of Social Affairs and Health has proposed asking the state for EUR 72 million for the full implementation of the law.
      Even if no increased funding is forthcoming, the necessary money can be taken from other spending.
      “The question of what kinds of political choices of values are made inside the framework is a matter for the whole government, and these kinds of decisions will certainly be made in the budget formation talks”, Urpilainen said during a break in the Finance Ministry’s budget talks on Monday.
     
Urpilainen said on Monday that next year’s budget is being drafted in a difficult situation.
      “The economic situation at the moment is dominated by great uncertainty, and it looks like the European recession is overshadowing the preparation of next year’s budget as well”, Urpilainen said.
      In spite of this, the Finance Minister believes that the tax increases and spending cuts that were agreed upon in the drafting of last spring’s framework budget will be sufficient. When the government convenes in its actual budget talks in late August, they will mainly be confirming what has already been agreed upon.
     
The Ministry of Finance is predicting very low economic growth for Finland next year. The ministry’s forecast is for growth between 0 and 1 per cent, down from the 1.5 per cent that it predicted earlier in the year.
      “Whether or not Finland slips into a recession depends largely on what happens in the international economy”, Urpilainen said.
      She did not want to say anything about next year’s debt level, or how big a budget deficit there might be. The two-day budget talks continue on Tuesday.
     


Previously in HS International Edition:
  Finance Ministry begins budget discussions on Monday (6.8.2012)
  Finance Ministry forecasts slow economic growth (20.6.2012)

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