The 2019 Draft Budget of the Ministry of Economic Affairs and Employment: Further investments in innovation funding
The 2019 Draft Budget of the Ministry of Economic Affairs and Employment focuses on a growth policy that supports the attainment of the Government’s employment and growth goals.
The Ministry of Economic Affairs and Employment proposes EUR 2,553 million as main title appropriations; this is almost EUR 270 million less than in the approved Budget for the current year.
The key reasons for reduced costs are that it is no longer necessary to allocate funding to the Government’s fixed-term (2016–2018) key projects (- EUR 112 million), the elimination of the costs of export refinancing loans due to their early repayment (- EUR 97 million), the decrease in public employment and business services appropriations (- EUR 83 million) and the reduction in the costs to subsidise renewable energy production (- EUR 33 million).
Respectively, the disbursement costs of the EU structural funds will grow by slightly more than EUR 40 million, the disbursement of Business Finland grants by slightly less than EUR 25 million and operating costs by slightly more than EUR 18 million.
Additional investments in Business Finland's resources
The Ministry of Economic Affairs and Employment proposes budget authorisations for the grants of Business Finland, the Finnish Funding Agency for Innovation, of slightly more than EUR 344 million, which is almost EUR 74 million more than in the approved 2018 Budget figure.
"We are clearly falling behind our competitors in innovation investments. Public funding for innovations must be significantly increased, because this will also make it possible for companies to boost their research and innovation activities", says Minister of Economic Affairs, Mika Lintilä.
Slightly more than EUR 102 million is proposed as Business Finland’s operating costs, which is an increase of more than EUR 18 million compared with the Budget for the current year. The additional appropriation would be spent, for example, on programme activities and on strengthening international operations.
The availability of international talent must be secured
The objective of the Government’s Talent Boost programme is to strengthen the availability of international experts by making Finland more attractive to them. Finnish companies must have sufficient labour and international know-how at their disposal.
"There is global competition for talent. The availability of labour and skilled persons is one of the greatest challenges for the growth and internationalisation of companies in this country and we must be able to meet this challenge. The software trade, for example, is suffering from a chronic shortage of experts", says Minister of Employment, Jari Lindström.
The Draft Budget of the Ministry of Economic Affairs and Employment includes an additional appropriation totalling EUR 5 million for attracting international talent to Finland. It has been proposed that half of it should be used for Business Finland to create a permanent service for international talent, on activities geared towards attracting talent and start-up entrepreneurs and on strengthening recruitment. There are also plans to establish Ambassadors for Finland activities to reinforce the country’s visibility among talented workers.
The second half of the additional appropriation would be directed at cities, for example, to help them develop and pilot systematic activities aimed at attracting talent to their region.
More regional leverage
The authorisation of EU structural grants will increase to almost EUR 669 million, which is EUR 287 million more than in the approved 2018 Budget figure. The growth of authorisation by 75 per cent is made possible by bringing it forward from 2020 to 2019.
Bringing authorisation forward will feed regional growth, enable the proactive spending of funding and facilitate the closing down of the 2014–2020 programming period.
Investments in energy aid will promote climate work and sustainable development
The proposal for energy aid authorisation is EUR 80 million, which is EUR 25 million more than in the approved Budget for the current year. This increase is based on the National Energy and Climate Strategy.
"Additional investments in energy aid are one of the elements employed to achieve the national and EU energy and climate goals. These investments will also promote the execution of the national Agenda 2030 in Finland, and particularly the achievement of our goal of a carbon-neutral and resource-wise Finland", says Minister of the Environment, Energy and Housing, Kimmo Tiilikainen.
The costs to subsidise renewable energy production will decrease by more than EUR 33 million. Previously this year, the Parliament passed an amendment to the Act on production subsidies for renewable energy, on the basis of which a technology-neutral competitive bidding will be organised. The new production subsidy system for renewable energy will give rise to expenditure from 2020 onwards.
"Production subsidies are only granted to the most cost-effective and competitive investments and they are a considerably more affordable way for taxpayers to support the production of electricity from renewable sources than the current feed-in tariff system. This will allow us to offer affordable and clean energy to an increasing extent in the future,”continues Minister Tiilikainen.
The 2019 Draft Budget of the Ministry of Economic Affairs and Employment (in finnish)
For more information contact:
Permanent Secretary Jari Gustafsson, Ministry of Economic Affairs and Employment, tel. +358 29 504 7400
Director of Finance Mika Niemelä, Ministry of Economic Affairs and Employment, tel. +358 29 506 2135
Special Adviser to Minister of Economic Affairs, Jukka Ihanus, tel. +358 50 463 9929
Special Adviser to Minister of Employment, Juha Halttunen, tel. +358 50 574 0236
Special Adviser to Minister of the Environment, Energy and Housing, Vilhartti Hanhilahti, tel. +358 40 836 4823