We are open-minded in seeking savings
The long-term challenges in economy must be addressed in a multifaceted and open-minded way. Supporting employment and growth, structural reforms, and strengthening the tax base are the best economic policy, but also require expenditure cutbacks alongside them. Savings must be sought on a broad front so that the core of the welfare state is not damaged or the conditions for growth lost.
Prevention of problems curbs spending
The best way to reduce public spending is to influence the needs behind it. For example spending related to work disability is reduced if people’s health and ability to work are in order. At the moment, the annual cost of work disability to the society is several billion euros. Correspondingly, strengthening employment reduces social security spending and sufficient housing production reduces housing assistance spending.
Shifting the focus of services in healthcare can curb future spending pressures. Health problems can be addressed in advance by strengthening basic services, which brings savings in the expensive specialised healthcare expenditure.
Public services that prevent problems are important. Broad, high-quality impact assessment is required as the foundation for political decision-making to avoid short-sighted savings and, on the other hand, dare to make investments, the benefits of which are often seen over the longer run.
Savings from state properties, reforming operations, and procurement
In its operations, the central government must strive to produce services to people cost-efficiently. However, the quality of service or the working conditions of the personnel must not be compromised. Savings can be found, for example, by improving the efficiency of the use of premises and travelling and also of service provision.
The state must continue to improve the efficiency of property use and seek expenditure savings by accelerating the implementation of the premises strategy. At the same time, revenues of up to a hundred million euros may be obtained by selling unnecessary properties.
New working methods will also reduce travel. During COVID-19, the annual state travel expenses went down by over 100 million euros. Reducing unnecessary travel can yield savings of tens of millions of euros also in normal times. This will also improve the use of time, which leaves more time, for example, for producing better services.
According to latest estimates, public procurement by the central government, wellbeing services counties and municipalities are about 35 billion euros annually. This tells of the connections between the public and private sectors and the fact that companies and organisations have a key role in the production of public services. During this government term, we have invested in the development of procurement, and this work must continue. It is important that economic, social and ecological viewpoints alike are extensively taken into account in procurement. Considering the overall value for money, we must look at quality instead of price. It is possible to get savings in procurement by getting more tenders in competitive bidding, which will improve the price-quality ratio.
Business subsidies must be carefully combed through
Expenditure savings must be sought elsewhere, not in benefits and services. One such place is business subsidies. There are tens of different business subsidies, and the collective sum of direct subsidies alone is over three billion euros. In addition to these, there are business subsidies implemented as tax subsidies.
When seeking savings in expenditures, these subsidies must be carefully combed through. For example the recommendations made by the working group of State Secretaries of the Ministry of Economic Affairs and Employment in 2019 can be used here. In business subsidies, ones that support reforming the economy and creation and preservation of high-productivity jobs or are critical for security of supply should be preferred.