- unemployment security costs, housing allowances and transfers to the Social Insurance
Institution; these expenditure items are, however, covered by the spending rules insofar as they are
affected by changes in their principles; - debt interest payments;
- any compensation to other tax recipients deriving from tax changes decided by central
government; - changes in transfers to the Social Insurance Institution caused by changes in social security
contributions; - expenditure corresponding to revenues from the European Union;
- expenditure corresponding to national gambling and lottery receipts and profit entered as revenue
from the Slot Machine Association; - capital expenditure.
Supplementary budget proposals, on the other hand, are included in the spending limits. The
Government’s declared aim is to secure balanced central government finances under normal conditions
of economic growth at the end of the electoral period, measured in terms of national accounting.
Furthermore, the Government’s guiding premise is that even in conditions of adverse economic
development, the deficit in central government finances, as measured in national accounting terms, shall
not exceed 2¾ per cent of GDP. In addition, the Government has agreed, as a supplement to the
Government Programme, that if annual proceeds from the sale of shares exceed 500 million euros, a
maximum of 10 per cent of the excess amount can be used on a discretionary basis for non-recurring
supplementary expenditures, primarily for infrastructure investments as well as for promoting R&D
activities, notwithstanding the expenditure rules and regulations or the spending limits for the electoral
term.
The allocation of appropriations by administrative branch is revised annually on the basis of a decision
on central government spending limits. In preparation of that decision ministries submit their own four-
year action and financial plans as well as their own spending limits proposal for the administrative
branch. The spending limits established by the Government provide a framework within which each
administrative branch works to prepare their proposals for the following year’s budget. The Government
Programme requires that more action strategies be included in ministries’ spending limit plans. Steps
have been taken to promote the integration of the spending limits procedure into the ministries’ action
plans. The aim has been to establish a system whereby resource priorities within and between ministries
can be steered by joint Government decisions. Furthermore, the aim has been to strengthen the political
control of the Government in the process of drawing up these plans.
The motivating force behind the spending limits for 2006-2009 has similarly been to support the
Government’s economic policy objectives and to persist with a fiscal policy that secures stable growth.
The starting-point is a cautious expenditure policy where strict economy is exercised in all administrative
branches. This also helped to create economic leeway for political decision-making.
2.3. Productivity action programme
The Government has made clear its commitment to securing continued access to public sector services
and the quality of those services in the future. To this end the public sector shall be developed to achieve
maximum efficiency and economy. In 2003 the Government launched a productivity programme for the
electoral period via which the performance of the entire public sector will be boosted. The programme
was initially drawn up in 5 pilot ministries and this year the procedure was extended to all administrative
domains. Among the measures included in the action programme launched by the Ministry of Finance
are to continue with the policy of transforming civil service departments and agencies into
unincorporated state enterprises and private companies; to purchase services from the private and third
sector; to improve and upgrade structures and strategies of service provision; to take better advantage of