The budget proposal of the Ministry of Defence follows the Defence Policy Report
The Report contains the defence policy guidelines for the development of Finland's defence. Responding to changes in the security environment and the long-term defence challenges are key elements in maintaining and developing defence capabilities. Key priorities are: 1) developing the rapid reaction units (RRU) of all services as well as readiness units; 2) replacing maritime and air defence capabilities (so-called strategic capabilities projects); and 3) developing new capabilities (particularly intelligence, cyber defence and long-range strike capability).
The sum total of expenditure will increase slightly on the current year
The draft budget of the administrative branch of the Ministry of Defence is EUR 2,877 million for 2018, which is about EUR 48 million or 2 per cent higher than in the 2017 budget. The draft budget includes, in accordance with the Government Programme, an appropriation increase for defence from EUR 80 million granted in 2017 to EUR 110 million in 2018. EUR 50 million has been allocated to improve readiness as required to respond better to changes in the security environment while EUR 2 million is allocated to hire contractual military personnel. The operating expenditure savings directed at all administrative branches and the Competitiveness Pact will cut appropriations by about EUR 16.3 million compared to the 2017 budget.
Focus on materiel readiness
It is planned to spend about EUR 941 million or 39 per cent of the national defence appropriations (without value-added tax expenditure) on materiel readiness while procurement of defence materiel accounts for about EUR 483 million. In addition, about EUR 458 million of the Defence Forces’ operating expenditure is planned to be spent on maintaining materiel and equipping troops.
The proportion of the expenditure in the main title of the Ministry of Defence accounts for 1.26 per cent of the anticipated GDP in 2018 (in 2017 this was 1.27 per cent).
Two new order authorisations are proposed for the Defence Forces
A maximum order authorisation of EUR 1.6 billion is proposed for the procurement of defence materiel; the expenditure is scheduled for 2018-2027. The Navy’s Squadron 2020 project is included, for the most part, in this order authorisation. Other major projects include The Squadron 2020 MLU, the anti-ship missile system 2020, national defence infrastructure, targeting support for military intelligence, and equipping Air Force bases.
An authorisation order of EUR 166 million is proposed for the operating expenditure of the Defence Forces for 2018-2022 to carry out procurements under the Defence Forces' development programme and to acquire spare parts and maintenance services.
Military crisis management will focus on Lebanon, Iraq and Afghanistan
EUR 57 million is proposed to cover the expenditure in the military crisis management equipment and administration which is about EUR 5 million more than in the 2017 Budget. This increase is mainly attributable to the training operation in Iraq.
The maintenance expenditure of Finnish crisis management troops (EUR 53 million) is included in the Ministry for Foreign Affairs main title. The planned strength of Finnish crisis management personnel in various operations, mainly in Lebanon, Iraq and Afghanistan, is currently estimated to require the work contribution of about 520 man-years.
Jukka Juusti, Permanent Secretary, tel. + 358 9 160 88101,
Kristiina Olsson, Director of Finance, tel. + 358 295 140 220.