Finance Minister Riikka Purra (Finns) outlined the main points of her budget proposal following internal budget negotiations at the Ministry of Finance in Moisniemi, Espoo, on 6 August 2025. Photo: Antti Aimo-Koivisto / Lehtikuva
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Finance Minister Riikka Purra has proposed sweeping cuts and structural changes in Finland’s draft budget for 2026, aiming to reduce public spending by approximately one billion euros. The plan includes eliminating the Finnish refugee quota system, freezing university funding, and dissolving the Finnish National Agency for Education.
The proposals were outlined during preliminary budget talks in Espoo this week. Final negotiations will take place in September, when the full government convenes for its annual budget session.
One of the most notable measures would see the functions of the Finnish National Agency for Education transferred to the Ministry of Education and Culture. Purra also called for the university funding index to be frozen for the remainder of the government’s term. This would cut 59 million euros from higher education funding in 2026 and 112 million euros in 2027.
In the area of immigration, the draft budget would end Finland’s long-standing refugee quota programme. Finland currently accepts 500 quota refugees each year under arrangements with the UN. If approved, 2026 would be the first year in decades with no refugee quota.
Integration compensation to municipalities and wellbeing services counties would also be abolished. Development cooperation spending would be reduced by over 100 million euros, including cuts to development loans and previously planned increases to humanitarian aid.
The cultural sector and civil society funding would also face reductions. Subsidies to foundations and associations are slated for a 100 million euro cut. State support for arts, culture, and sport would be reduced further under the Finance Ministry’s plan.
Municipal finances would be affected as well. Purra’s proposal includes cutting 150 million euros from state transfers to basic municipal services.
Support for the ferry industry is also targeted. The draft budget removes wage subsidies for service staff working on cruise ships, a benefit currently extended to the broader maritime workforce.
Healthcare cost-sharing would be adjusted, with a proposed reduction in Kela reimbursements for private doctor visits.
Despite the cuts, the budget includes a significant increase in defence procurement. Purra is proposing three billion euros in new authorisation for defence equipment purchases, six times the current level.
There will be no general tax increases under the proposal. Income taxes will decline slightly next year, as previously agreed in spring negotiations. No new tax cuts are planned.
HT
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Source: www.helsinkitimes.fi
