Ministry of Finance’s spending and tax reviews
The spending and tax reviews published by the Ministry of Finance in 2023 were a step forward in the preparation of these reviews, as the set of documents was more comprehensive than before. However, the spending review failed to describe the impacts of adjustment measures adequately.
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Scope of the audit
- Coverage of the spending and tax reviews published by the Ministry of Finance in 2023
- Whether the information contained in the reviews was up to date, transparent and consistent
- Guarantees for the continuity of the preparation of these reviews
Key findings
- The reviews made up a comprehensive set of documents as they covered the expenditure and revenue of general government finances as a whole.
- The spending review failed to describe the uncertainty of the employment impacts sufficiently.
- The spending review paid little attention to income distribution effects.
- The guarantees ensuring that the preparation of the reviews will continue are currently inadequate, as no obligation to produce and publish them has been included in an act or decree.
- Other ministries’ role in the preparation of the spending review was inconsistent.
Briefly
The aim of the spending and tax reviews is to give an idea of what public funds are currently being used on and how the tax system provides the state with the funds it uses. The reviews have a significant role in fiscal policy preparation, especially towards the end and at the beginning of the parliamentary term.
The audit found the reviews of 2023 comprehensive as they covered the general government finances as a whole and mainly included the key expenditure and revenue items. The spending review did not contain a summary of how the identified potential savings would be targeted.
The uncertainty and time span of the employment impacts associated with social security cuts was described inadequately.
The description of the impacts of savings measures in the spending review should be improved. The uncertainty and time span of the employment impacts associated with social security cuts were described inadequately. Also, the income distribution effects should have been described more extensively.
The fact that the Ministry of Finance has engaged other ministries in the preparation of the reviews to a variable degree may impair the quality of the spending review.
Approx.
EUR 162 billion
Total general government expenditure in 2025
Recommendations of the National Audit Office
The Ministry of Finance should include in the spending and tax reviews a justified and consistent policy outlining how different impacts are taken into account and presented in the reviews. To the extent that indirect impacts are included in the estimates, it should be ensured that the nature of these impacts is described, especially when it comes to the uncertainty of the impacts and the time span of their realisation.
The Ministry of Finance should include in the spending review a summary of how the identified potential for savings is targeted at different expenditure areas.
The Ministry of Finance should ensure the continuity of the reviews by promoting the inclusion of an obligation to prepare and publish these reviews in legislation, such as the Decree on the General Government Fiscal Plan.
The Ministry of Finance should create a systematic process for regular spending and tax reviews prepared during each parliamentary term, ensuring the systematic involvement of sectoral ministries and other experts in this process. A description of the process must be drawn up that describes, among other things, its organisation, the parties involved in it, what the reviews should cover, and their schedules.
Timing of follow-up
The follow-up of the audit will be conducted in 2028.
Contact persons
Mika Sainio
Principal Fiscal Policy Auditor
Fiscal policy audit
Ville Haltia
Principal Fiscal Policy Auditor
Fiscal policy audit