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Published: 18 December 2020

Share of social protection in general government expenditure decreased in 2019

According to Statistics Finland's data, consolidated total general government expenditure was 53.2 per cent relative to gross domestic product in 2019. Social protection expenditure is the largest single expenditure item. Its relative share of total expenditure decreased slightly, however.

Function distribution of general government expenditure in 2019

	Total expenditure %	Net expenditure % 1)	Final consumption expenditure %
G01 General public services	14.9	11.2	12.9
G02 Defence	2.3	2.4	4.4
G03 Public order and safety	2.2	2.2	4.3
G04 Economic affairs	7.9	7.5	9.0
G05 Environmental protection	0.4	0.3	0.5
G06 Housing and community amenities	0.6	0.2	0.4
G07 Health	13.4	13.1	25.3
G08 Recreation, culture and religion	2.8	2.8	3.9
G09 Education	10.6	11.0	17.8
G10 Social protection	45.1	49.2	21.5
G0 Functions total	100.0	100.0	100.0

1) Net expenditure = Total expenditure less received sales proceeds and premium income, and output for own final use.

Consolidated general government expenditure totalled EUR 128.0 billion in 2019. Total expenditure grew by EUR 3.3 billion or 2.6 per cent year-on-year. The ratio of expenditure to gross domestic product fell slightly, because the year-on-year change in gross domestic product at current prices was larger: 3.0 per cent.

The biggest single expenditure item of consolidated total general government expenditure was social protection expenditure, which in 2019 grew by EUR 1.1 billion or 2.0 per cent from the previous year. Expenditure related to health grew by EUR 600 million, expenditure on education by EUR 553 million and expenditure on general public services by EUR 457 million. In relative terms, expenditure on public order and safety grew most: 8.7 per cent or EUR 226 million from the year before.

Social protection expenditure formed 45.1 per cent of consolidated total general government expenditure in 2019. Even though social protection expenditure grew most in euros, its share of total expenditure fell by 0.3 percentage points from the previous year, because it grew more slowly than total expenditure. Of social protection expenditure, expenditure related to old age, most of which are paid employment pensions, grew again most in 2019, by around EUR one billion. By contrast, the prolonged growth in expenditure on housing allowances halted. The biggest fall in social protection expenditure was recorded in paid unemployment benefits.

Examined by transaction, general government expenditure grew in 2019 most for compensation of employees, social benefits and intermediate consumption. Compensation of employees grew by EUR 950 million or 3.3 per cent year-on-year. Paid social benefits other than social transfers in kind grew by EUR 748 million or 1.7 per cent. Intermediate consumption, or goods and services used in production, grew by EUR 715 million or 2.8 per cent.

General government expenditure is usually examined as consolidated expenditure from which current transfers between sub-sectors, such as central and local government, have been removed. By contrast, expenditure in sub-sectors is usually examined in non-consolidated form. In 2019, central government accounted for 25.8 per cent of consolidated total general government expenditure, local government for 40.5 per cent, and social security funds for 33.7 per cent. Non-consolidated central government expenditure grew by EUR 1.2 billion or 2.0 per cent in 2019 from the year before. Local government expenditure increased by EUR 1.8 billion or 3.6 per cent. Among social security funds, employment pension schemes' expenditure grew by EUR 889 million or 3.3 per cent, while the expenditure of other social security funds fell by EUR 267 million or 1.5 per cent.

Non-consolidated central government total expenditure was boosted most by general public services. Most of the growth in local government expenditure came from social protection, health care and education expenditure. The growth in the expenditure of employment pension schemes was mainly connected to paid employment pensions and the expenditure of other social security funds decreased due to lower social security expenditure, especially unemployment benefits.

General government total expenditure is by nature gross expenditure, which does not take into account the income attributable to the functions. The net expenditure of the statistics is derived when sales and premium income and output for own final use are subtracted from total expenditure. Then, for example, sales proceeds and service charges received by general government from enterprises, households or other general government reduce the expenditure of the function in question. Taxes paid by general government to one another or itself, such as value added tax and social security contributions, are not subtracted from the net expenditure, however.

Another comparable indicator is general government's consumption expenditure that describes current expenses caused for general government from service production less the service charges received from services and other sales proceeds from services.

In 2019, consolidated general government net expenditure amounted to EUR 112.2 billion. The ratio of net expenditure to gross domestic product was 46.7 per cent, which was unchanged from one year before. General government's consumption expenditure amounted to EUR 55.6 billion, or 23.1 per cent relative to gross domestic product, which grew by 0.3 percentage points from the year before.

Source: National Accounts, Statistics Finland

Inquiries: Ohto Soininvaara 029 551 3046, financial.accounts@stat.fi

Head of Department in charge: Mari Ylä-Jarkko

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Appendix tables

• Appendix table 1. Total expenditure of general government by function and sector 2019, million euro 1) (18.12.2020)
• Appendix table 2. Consumption expenditure of general government by function and sector 2019, million euro (18.12.2020)
• Appendix table 3. Total expenditure of general government by transaction and sector 2019, million euro 1) (18.12.2020)

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Updated 18.12.2020