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Finnish Finance Minister aims to cut deficit in 2018 budget proposal

Finnish Finance Minister aims to cut deficit in 2018 budget proposal

HELSINKI: Finance Minister Petteri Orpo unveiled his budget proposal on Wednesday with cuts in spending amounting to some 400 million euros. Orpo delayed decisions on taxation but said he would not raise anyone’s taxes—and nor would he grant tax cuts only to the wealthy, as had been feared.

The Finance Ministry unveiled its proposed state budget for 2018 on Wednesday, with few surprises. Finance Minister Petteri Orpo’s plan reduces public spending by some 400 million euros, to a final figure of 55.4 billion euros.

Orpo delayed final decisions on taxation until later in the autumn, but did promise that nobody would have their tax rate increased—and that he wouldn’t cut taxes only for higher earners, as had been feared.

That scenario would come about if the threshold for the ‘solidarity tax’ was raised from 72,000 euros to 90,000 euros, as had been agreed by the government in 2015, without similar tax cuts for lower earners.

The government plans to put an extra 25 million euros into measures to improve employment, and an extra 27 million euros for the defence forces.

Renewed economic growth has allowed an improvement in the deficit figure, which drops by two billion euros from 5.4 billion euros this year to 3.4 billion euros next. The state plans to balance the budget in the next few years, with debt stable as a percentage of GDP by 2019 and no new debt at all soon after that.

The Finance Ministry’s proposal will now be discussed by the three government parties with final decisions due in the coming aweeks.