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Published: 30 January 2015

The share of social protection in general government expenditure grew in 2013

Around 43 per cent of general government total expenditure was spent on social protection in 2013. Expenditure directed at old age, of which most were pensions, grew most from 2012. The second biggest expenditure items were health, education and general public services. These data derive from Statistics Finland's statistics on general government expenditure by function.

Function distribution of general government expenditure in 2013, the function's share of expenditure

	Total expenditure %	Net expenditure % 1)	Final consumption expenditure %
G01 General public services	14,4	11,5	11,1
G02 Defence	2,6	2,7	5,5
G03 Public order and safety	2,4	2,3	4,6
G04 Economic affairs	8,2	7,7	9,0
G05 Environmental protection	0,4	0,4	0,7
G06 Housing and community amenities	0,7	0,4	0,6
G07 Health	14,5	13,3	25,7
G08 Recreation, culture and religion	2,5	2,6	3,7
G09 Education	11,2	11,8	19,0
G10 Social protection	43,1	47,2	20,2
G0 All functions	100,0	100,0	100,0

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

The share of social protection in expenditure grew in 2013. The expenditure share of general public services and education decreased. The share of social protection expenditure grew, in particular due to the increase in pension costs. The share of expenditure directed at old age has grown most in the 2000s. In 2001, around 16 per cent of the expenditure was connected to old age. In 2013, this share had grown almost to 21 per cent.

General government is comprised of central government, local government and social security funds. Expenditure grew fastest in social security funds, by 6.4 per cent from the year before. Social security funds pay a majority of social benefits and allowances, as well as the employment pensions of both the private and public sectors. The growth in the expenditure of central and local government slowed down from the year before and was slightly over three per cent in both.

General government expenditure can also be viewed by type of expenditure. A majority of total expenditure, i.e. around one-third, was social benefits paid in cash. The second most expenditure was directed at compensation of employees, 25 per cent of total expenditure (20 per cent on wages and salaries), purchased services and goods, around 20 per cent of expenditure, and investments, around seven per cent of expenditure.

Public total expenditure amounted to EUR 117 billion in 2013 and the ratio to gross domestic product was 57.8 per cent. Net expenditure was EUR 101 billion and the ratio to GDP was 50.2 per cent. Consumption expenditure amounted to EUR 50 billion and the ratio to GDP was 24.8 per cent.

General government total expenditure is by nature gross expenditure. It includes a considerable amount of purchase expenses between general government, which also constitute income for general government. After the ESA 2010 review, the total expenditure contains more internal expenditure, which can make it more difficult to interpret the key indicator. A more comparable key indicator, net expenditure, is calculated by deducting from total expenditure the received sales proceeds as well as production for own use, which means that the income from services including internal purchases of general government and the production costs of investments produced for own use do not affect the key indicator. Taxes paid by general government to 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 income from the services.

Impacts of the ESA 2010 review of national accounts

The European Union started using the new system of accounts (ESA 2010) at the end of September 2014. The national accounts of Finland adopted the system in July 2014. The review had a considerable effect on general government expenditure due to methodological changes, changes in the sector definition and time series adjustments.

This is the first release of the statistics on general government expenditure by function in accordance with ESA 2010. Therefore, more revisions than usual have been made to the time series of the statistics starting from 1990. More detailed information on all impacts of the ESA 2010 review can be found on the web pages of the ESA review of national accounts at https://www.stat.fi/til/ekt2010_en.html . The units belonging to general government in accordance with the renewed Classification of Sectors can be found on the web pages of the Classification of Sectors at http://www.stat.fi/meta/luokitukset/_linkki/julkisyhteisot.html (in Finnish).

Source: National Accounts, Statistics Finland

Inquiries: Jukka Hytönen 029 551 3484, kansantalous@tilastokeskus.fi

Director in charge: Leena Storgårds

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Appendix tables

• Appendix table 1. Total expenditure of general government by function and sector 2013 1) (30.1.2015)
• Appendix table 2. Consumption expenditure of general government by function and sector 2013 (30.1.2015)
• Appendix table 3. Total expenditure of general government by transaction and sector 2013 1) (30.1.2015)

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Updated 30.1.2015