A new programme management system for the implementation of the government programme was
introduced in 2003 with the aim of ensuring a coherent and coordinated implementation of government
policies. New policy programmes, which cover the most important intersectoral subject matters, are
included in the Government Strategy Document. The document also includes concrete impact objectives
and defines indicators for the monitoring of each policy programme. Currently there are four policy
programmes i.e. the employment policy programme, entrepreneurship policy programme, information
society policy programme and civil participation policy programme.
The biggest challenge for economic policy is to raise productivity. Improved productivity opens up
significant opportunities to curb the growth of expenditures and to reallocate resources. In 2003 the
Government launched a comprehensive Productivity Action Programme with the aim of achieving
significant productivity gains in the entire public sector. As the labour input continues to dwindle, the
total labour force in the public sector can not grow; instead, the functions and services of public
administration as a whole must be enhanced and resources reallocated so that the growing need for
services can be satisfied, avoiding price competition for the labour supply, which would be detrimental
for the national economy, and securing availability of labour for other sectors.
The increased focus on public sector productivity applies also to the municipal sector. The municipal and
service structure project set up by the Government has an important role in curbing public expenditure.
The aim of this project is to make sure there is a sound enough structural and financial basis for the
future production and provision of services that are currently the responsibility of the local government
sector and at securing the cost-effective provision of those services.
Figure 1 - The financial balance of general government subsectors in ratio to GDP, per cent-12-8-404890 92 94 96 98 00 02* 04* 06**TotaltCentral
government
Local govt.Social security
fundsGovernment Programme
The main aim of the Government is to develop the welfare state by enhancing growth and employment
and by improving basic services. Government measures to secure employment and growth focus on
action plans consisting of controlling the growth of public expenditure, reviving public finances and
reforming their structures, improving the position of the least well-off citizens and strengthening
economic growth potential through support for education, research, product development and growth
enterprises. The main goal of the Government’s economic policy is to reduce unemployment and to find
jobs for 100,000 persons during its term in office. This would imply an increase in the employment rate
to around 70 per cent.
According to the Budget Proposal for the year 2006 issued in September the Government is paying
special attention to improving the position of the least well-off. To support employment of the long-term
unemployed, the Government is implementing a labour market subsidy reform and a social guarantee for
the long-term unemployed, which will offer all unemployed target group members either work or active