Government budget cuts hit state employees as summer interns get warm welcome

State employees facing budget cuts will likely greet 500 new summer interns with smiles, as Prime Minister Petteri Orpo’s government finalises its latest round of austerity measures, writes Yle political correspondent Marica Paukkeri.

With economic growth stagnant and unemployment rising, the government’s final budget negotiations focused on targeted measures to boost youth and long-term employment. The most visible outcome: a pledge to hire 500 summer workers and interns across state agencies.

Other measures include expanding the use of youth employment vouchers—though Yle’s investigation found only a handful have been issued so far—and increasing tax deductions for household expenses and commuting costs. An additional €110 million will support renovation construction, with further funds allocated to peat subsidies and reduced business taxes.

Yet every new expenditure required cuts elsewhere. The deepest reductions fell on state administration and the Ministry of Social Affairs and Health, where newly appointed minister Wille Rydman (Finns Party) delivered on promises to trim spending. Non-profits and third-sector organisations providing preventive social and healthcare services face fresh cuts, despite some compensation through locally distributed welfare grants.

The negotiations also revealed tensions over fuel distribution mandates, with the Finns Party pushing to lower renewable fuel quotas—a move critics argue would do little to lower petrol prices. Meanwhile, other coalition partners floated proposals like replacing inheritance tax with capital gains tax or abolishing property transfer fees for first-time homebuyers. Such sweeping tax cuts, however, were deemed politically unrealistic after earlier welfare reductions for low-income groups.

As elections loom in a year, even minor funding disputes grew contentious. Finance Minister Riikka Purra (Finns Party) dismissed claims that electoral concerns influenced talks, though the government’s shrinking approval ratings clearly weighed on discussions.

With €400 million in compensatory savings needed, the latest round of cuts underscores the dwindling options for further austerity—leaving state workers to absorb the impact while summer interns arrive to temporary relief.