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Sustainability assessments of general government finances in the knowledge base of economic policy

Audit Id 1575274048253
Title Sustainability assessments of general government finances in the knowledge base of economic policy
Title in original language

Julkisen talouden kestävyysarviot talouspolitiikan tietoperustassa

Finnish

Year 2019
Subject

Government Operations (Budget and Spending)

Type

Performance

Type of performance

Performed by single SAI

Comments In this audit, the National Audit Office of Finland (NAOF) evaluated sustainability calculations produced by the Ministry of Finance (MoF), reporting on public finance sustainability, and the use of sustainability indicators in fiscal policy. The goal of this audit was to ensure that the knowledge base of fiscal policy making is reliable, open and transparent, regarding the sustainability of public finance. The main findings can be summarized as follows: i) reporting of the sustainability of public finances should be more diverse, and the information reported to the parliament should be more extensive, ii) the long-term sustainability indicator (S2) is not a suitable indicator to be used as an independent target in fiscal policy, and iii) the sustainability gap calculations have been produced carefully, yet their correctness has certain problems. According to this audit, the sustainability of public finances should be assessed and reported more extensively. Reporting, which has so far focused on the long-term indicator S2, should be enriched with medium-term indicator S1 covering approx. the upcoming 15 years. The S1 would draw a better picture of the timeframe in which the sustainability challenges are occurring. NAOF recommends that the MoF develops its regular reporting on sustainability of public finances and enriches it with S1 indicator, for instance. The MoF should also ensure that the calculation and simulation methodologies are up-to-date and transparent in the future. The government should prepare an amendment in fiscal policy legislation, so it would be obligatory to comprehensively cover the sustainability of public finances in the general government fiscal plan.
Country

Finland

Materials

Audit report

Finnish

Download report

Summary

Swedish

See summary

Summary

English

See summary
Contact
Mika Sainio
mika.sainio@vtv.fi
https://www.vtv.fi/en
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