• 23.06.2026 at 06.45
• Fiscal policy audit, Fiscal policy report

Continuous audit of the spending limits system and the information content of the General Government Fiscal Plan

The spending limits system limits the increase in central government expenditure. However, the savings target for spending limits expenditure has been unclear since the beginning of the government term. At the same time, spending limits expenditure has been increased by expenditure items defined outside the spending limits, which have increased the spending ceiling. It would be important to reconcile decisions on revenue and expenditure already in the Government Programme and to define how to react to changing situations during the government term.

Photo: Ville-Veikko Heinonen

Briefly

The current spending limits system has been in use since 2004. With the help of the spending limits system, the Government sets a binding limit on central government expenditure for every year of the government term. The spending limits cover approximately 86 per cent of central government budget expenditure. The General Government Fiscal Plan provides estimates of the main revenue and expenditure items in general government finances and its components in the budget year in question and in the medium term.

The aim of the annual audit of the spending limits system and the General Government Fiscal Plan is to verify the adequacy and transparency of the spending limits system and the information content the General Government Fiscal Plan. The audit produces information on the decisions included in the spending limits system and their possible alternatives.

The savings target for spending limits expenditure has been unclear since the beginning of the government term, and new decisions on lowering the spending limits ceiling have been made throughout the term. At the same time, however, spending limits expenditure has been increased by expenditure items outside the expenditure ceiling, which may have been entered into the spending limits without any limitation. Government decisions have reduced spending limits expenditure by a total of EUR 632 million for 2027, but the final amount may still be updated due to new decisions.

The practice in which the expenditure ceiling is automatically raised to correspond to new expenditure decisions should be abandoned in the spending limits system entirely. Such expenditure has included support to Ukraine and the Government’s investment programme. There are no grounds in the spending limits system for the exclusion of these expenditures from the spending limits and their subsequent inclusion in the spending limits. Investments should be financed within the expenditure ceiling, and expenditure cannot be credibly financed by increasing state property income.

The practice in which the expenditure ceiling is automatically raised to correspond to new expenditure decisions made outside the spending limits should be abandoned in the spending limits system.

Timing of follow-up

As the topic is audited annually, no follow-up is carried out on the audit.