Government submits third supplementary budget proposal for 2025 to Parliament

Government submits third supplementary budget proposal for 2025 to Parliament

On Friday 10 October, the Government submitted its third supplementary budget proposal for 2025 to Parliament. Among other things, the proposal sets aside an appropriation for investments in the preparedness of the Finnish Defence Forces' healthcare services for emergency conditions and updates the tax revenue estimates to correspond to the latest forecast.

The supplementary budget proposal includes an increase of EUR 163 million to the requirement for appropriations and an increase of EUR 144 million to actual revenues. Together, these will raise the central government's net borrowing requirement by EUR 19 million, with budgeted net borrowing expected to total around EUR 13.3 billion in 2025.

Investments in healthcare preparedness and support for Ukraine

A sum of EUR 104.3 million is proposed for investments in the preparedness of the Finnish Defence Forces' healthcare services for emergency conditions. This appropriation would be paid to the wellbeing services counties as a separate compensation. The Government is committed to covering the necessary appropriations for preparedness in future budget processes as well.

The Government proposes increasing the maximum amount of the UKR 2023 procurement authority by approximately EUR 28.2 million for defence materiel procurements in 2028. The change in the amount of the procurement authority will cover the cost of replacing the materiel handed over to Ukraine in the 29th defence materiel package. In addition, an increase of EUR 3.8 million is proposed for the operating expenses of the Defence Forces to cover the costs of support to Ukraine.

Authorisation proposed for new icebreaker

Finland will recognise a total of EUR 26.1 million in support from the Connecting Europe Facility (CEF) as revenue for transport projects. A budget authority of EUR 170 million and an appropriation of EUR 100 000 are proposed for purchasing a new icebreaker.

Several revisions to needs assessments for appropriations

A reduction of EUR 308 million to the energy subsidy is proposed due to adjustments to payments. The reduction will be directed at both national energy aid and energy investment support provided through Finland's Recovery and Resilience Plan (RRF). With regard to national energy aid, this is particularly a question of delays in large-scale demonstration projects. With regard to RRF energy investment support, the projects have been mainly cancelled and partly delayed. The share of cancelled projects is approximately EUR 108 million.

It is proposed that the appropriation for the production subsidy for renewable energy be increased by EUR 23.9 million due to a revised needs assessment.

A reduction of EUR 75 million is proposed for housing allowance expenditure as a result of a decrease in the number of beneficiaries. A reduction of EUR 12 million is proposed for the central government compensation to the wellbeing services counties for the costs of rehabilitative work experience, as the number of persons participating in rehabilitative work experience has been lower than expected. An increase of EUR 33 million is proposed for the central government share of the earnings-related component of unemployment benefits as a result of an increase in the unemployment rate.

An increase of EUR 19.7 million is proposed for the central government share of the expenditure arising from the Self-Employed Persons Pensions Act as a result of revisions to the central government share. A reduction of EUR 50 million is proposed for the central government share of expenditure arising from the National Pensions Act and certain other acts due to the lower than anticipated number of recipients of the national pension and the housing allowance for pensioners.

Due to the higher than estimated number of beneficiaries of temporary protection, an increase of EUR 25 million is proposed for central government compensation to promote integration.

An increase of EUR 7.3 million is proposed for translation and interpretation services related to the judicial procedure. An increase of EUR 15.7 million is proposed for the fees of private attorneys, of which EUR 4 million will be covered by an internal transfer within the branch of government.

An increase of EUR 7.5 million is proposed for aid to shipping companies. The revision of the appropriation needs estimate is due to changes in the fleet and an increase in manning costs.

The Government will discuss transport investments, including investments in main road 9, as a separate entity and will make decisions in connection with the supplementary budget for 2026 in November.

Other key changes

An appropriation of EUR 30 million is proposed for a youth recruitment subsidy.

An authorisation of EUR 10 million and an appropriation of EUR 0.3 million are proposed to support investment and development projects by SMEs in the regions of Kymenlaakso and South Karelia as part of the implementation of the programme for eastern Finland.

EUR 6.9 million is proposed for costs related to developing the use of digital mailbox services.

The authorisation for Clean Energy Finland key projects will be reduced by EUR 50 million and the authorisation for the industrial policy provision by EUR 40 million as part of the adjustment measures decided on by the Government in its autumn budget session. In addition, EUR 48 million in unused appropriations will be withdrawn from the authorisation for the industrial policy provision.

An increase of EUR 2.5 million is proposed to prepare for the payment of additional funding under the Act on the Funding of Wellbeing Services Counties.

A total of EUR 1.8 million is proposed for the Governing Body of Suomenlinna for the urgent repair of damage caused by the breakage of a drain pipe at the dry dock.

EUR 1.3 million is proposed for the Finnish Immigration Service for non-recurring development of information systems required by the reform of the Aliens Act.

Revenue estimates take into account Ministry of Finance's autumn forecast

The Government proposes a total net increase of EUR 144 million to the revenue estimate. The Government proposes decreasing the tax revenue estimate by EUR 701 million. The new tax revenue estimate is based on the macroeconomic forecast published by the Ministry of Finance in September. The changes can be explained by factors such as lower than expected taxes received and weakening forecasts for the development of tax bases.

An increase of EUR 610 million is proposed for the estimate of miscellaneous revenue, which includes, among other things, an increase of EUR 400 million in the estimate of cancellations of appropriations carried over from previous years. It is proposed that central government dividend income, capital repayments and revenue from the sale of shares be increased by EUR 235 million. The increase is due to a revised estimate of dividend and capital repayments and is based on decisions made by general meetings, for example.

Inquiries: Mikko Martikkala, Special Adviser to the Prime Minister in Economic Affairs, tel. +358 295 161 171, and Jussi Lindgren, Special Adviser to the Minister of Finance in Economic Affairs, tel. +358 295 530 514
The email addresses of the Finnish Government are in the format [email protected]