The Finnish government is NOT responsible for economic upturn, but according to government’s own economic unit, public finances will remain weak

The government’s own National Audit Office has just published a report that says, in simple and frank language, that the government will not be able to balance its books by the end of the current election period as promised.

Furthermore it also states that the present Healthcare and new Counties reforms are based on over-optimistic cost savings.

Finally, the expected reduction of public spending by municipalities is not realistic without greater policy pressure from the government. In other words the government has been soft on the municipalities for political reasons.

This judgement is serious indictment of the management of public finances at a time of higher than expected economic growth.

Private sector companies have successfully taken advantage of the improved international economic growth with strong export performance, and consumers have also increased domestic consumption.

These activities have resulted in much higher economic growth, which have not been balanced by better financial management by the present government now or for the future.

The National Audit Office (NAO) is concerned about the present government’s over-optimistic estimates of cost savings for healthcare as proposed by the Healthcare Reform called SOTE. The NAO states that the costs of public healthcare are currently low in relation to other OECD countries, and the expected costs of the new reform can be much higher than expected.

Both of these comments have been reported in FinnishNews earlier. The costs of virtually all new national electronic records and related IT solutions are generally under-estimated. This has been seen in the reported huge cost over-runs, published in the UK and in the USA, with the same and similar suppliers that are now bidding for this business here in Finland.

Finally, it is reasonable to expect that the present and future governments will see that the costs of establishing the18 new Counties, ( the new authorities responsible for managing the healthcare reform), will also lead to “large unexpected costs”. Having such a large number of diverse units can result in a exceptionally large waste of taxpayers’ money.

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