General government expenditure by function: documentation of statistics

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18.4.2024 valid documentation

Basic data of the statistics

Data description

The statistics describe the breakdown of the total expenditure of the general government sector and its sub-sectors as set out in the Classification of the Functions of Government (GOFOG) of the European System of Accounts (ESA 2010) and by type of expenditure. The statistics can be used to monitor the achievement of economic policy objectives by examining changes in the structure of general government expenditure.

The statistics are based on the national accounts.

Statistical population

Under the Classification of Sectors, general government in Finland comprises central government, municipalities, joint municipal authorities, the Åland Government and social security funds. Central and local government do not include unincorporated state and municipal enterprises, which are market producers. In addition to on-budget activities, central government comprises such actors as off-budget funds, universities, Finnish Broadcasting Company (Yle), Senate Properties, and real estate companies of universities. Local government comprises municipalities and joint municipal authorities, companies managing universities of applied sciences and companies owned by municipalities that mainly produce services for their owners.
Social security funds comprise the units managing Finland’s statutory social security system. They comprise the units providing basic social security such as the Social Insurance Institution of Finland (Kela), the Employment Fund, unemployment funds, sickness funds, companies managing Finland’s statutory employment pension insurance scheme, pension foundations, pension funds, and public institutions (such as Keva).
Employment pension institutions were specified as statistical part of Finland’s general government under a special decision taken by the European Commission in January 1997.

Statistical unit

The statistics cover the general government sector, which is divided into central government, local government and social security funds. A list of general government units can be found here.

Unit of measure

The figures in the statistics are at current prices (in EUR million).

Reference period

The reference period of statistics is a calendar year.

Reference area

The reference area for the statistics is the whole of Finland.

Sector coverage

The statistics comprise all units of Finland’s general government in central government, local government and social security funds, as specified in ESA 2010. The statistics broaden the picture of the composition of general government expenditure but do not examine the matter from the perspective of individual industries.
The Classification of the Functions of Government used in the statistics comprises ten main categories, each of which is divided into specific functions. The data of the statistics only on the main categories are available for the period 1990 to 2000 but from 2001 onwards, data are also provided with a more detailed classification of functions.

Time coverage

The statistics start from the year 1990. For the period 1990 to 2000, the statistics only describe general government expenditure at the level of main categories. From 2001 onwards, the expenditure has also been described on the basis of a more specific division of functions.

Frequency of dissemination

The statistics are published in December each year. The data contained in the statistics are published on the website of the statistics. The data for year t-1 are published in year t. The statistics are derived from the national accounts and the figures match the latest annual national accounts at the time of the publication. The data contained in the statistics (especially the figures for the most recent year) are preliminary. In connection with the publication of the statistics, figures for earlier years may also change as annual national accounts are revised.

Concepts

Capital transfers

Capital transfers are different from current transfers in that they involve the acquisition or disposal of an asset, or assets, by at least one of the parties to the transaction. Regardless of whether the capital transfers are made in cash or in kind, they result in a commensurate change in the financial, or non-financial, assets shown in the balance sheets of one or both parties to the transaction.
Capital transfers consist of capital taxes, investment subsidies and other cap-ital transfers.

Compensation of employees

Compensation of employees (D.1) is defined as the total remuneration, in cash or in kind, payable by an employer to an employee in return for work done by the latter during the accounting period.

Compensation of employees is broken down into:
a) wages and salaries (D.11): wages and salaries in cash; wages and salaries in kind;
b) employers’ social contributions (D.12): employers’ actual social contributions (D.121); employers’ imputed social contributions (D.122).

General government total expenditure

General government total expenditure describes the sum of general government's expenditure type. Consolidated expenditure excludes property expenditure, income transfers and capital transfers between general government sub-sectors. Acquisitions of goods and services between general government sub-sectors are not consolidated, however. Thus, total expenditure is to some extent gross expenditure.

The General government, total (S.13) level is usually viewed as consolidated and sub-sector data as unconsolidated.

The ratio of total general government expenditure to gross domestic product is also called the expenditure ratio.

General government total expenditure is calculated by adding together the following expenditure types:

Consolidated/unconsolidated total expenditure =
P22K intermediate consumption or acquired services and goods +
D1K Compensation of employees, payable +
D29K Commodity taxes paid +
D3K Subsidies paid +
D4K Consolidated/unconsolidated property expenditure paid +
D5K Income taxes paid +
D62K Social benefits other than social transfers in kind, payable +
D632K Social transfers in kind, payable
D7K Consolidated/unconsolidated current transfers paid +
D9K Consolidated/unconsolidated capital transfers paid +
P5K Gross capital formation, i.e. investments
NP Net acquisitions of non-produced assets

Gross fixed capital formation

Gross fixed capital formation consists of resident producers' acquisitions, less disposals, of fixed assets. Fixed assets are tangible or intangible assets produced as outputs from processes of production that are themselves used repeatedly, or continuously, in processes of production for more than one year.

Intermediate consumption

Intermediate consumption consists of the value of the goods and services consumed as inputs by a process of production, excluding fixed assets whose consumption is recorded as consumption of fixed capital. The goods and services may be either transformed or used up by the production process.

Products used for intermediate consumption should be recorded and valued at the time they enter the process of production. They are to be valued at the purchasers’ prices for similar goods or services at that time.

Other current transfers

Other current transfers (D.7) include:

Net non-life insurance premiums (D.71)
These are premiums payable under policies taken out by institutional units. They comprise both the actual premiums payable by policy holders to obtain insurance cover during the accounting period (premiums earned) and the premium supplements payable out of the property income attributed to insur-ance policy holders, after deducting the service charges of insurance enter-prises arranging the insurance.

Non-life insurance claims (D.72)
These represent the claims due under contracts in respect of non-life insur-ance, i.e. amounts which insurance enterprises are obliged to pay in settle-ment of injuries or damage suffered by persons or goods (including fixed capital goods).

Current transfers within general government (D.73)
Current transfers within general government include transfers between the different sub-sectors of general government (central government, local gov-ernment, social security funds) with the exception of subsidies, investment grants and other capital transfers. Current transfers within general govern-ment do not include transactions on behalf of another unit; these are record-ed only once in the accounts, in the resources of the beneficiary unit on whose behalf the transaction is made. This situation arises particularly when a government agency (e.g. a central government department) collects taxes which are automatically transferred, in total or in part, to another govern-ment agency (e.g. a local authority). In this case, the tax receipts destined for the other government agency are shown as if they were collected directly by that agency and not as a current transfer within general government. On the other hand, transfers of tax receipts which form part of a block transfer from central government to another government agency are included in cur-rent transfers within general government.

Current transfers in international co-operation (D.74).
Current transfers in international cooperation include all transfers in cash or in kind between general government and governments or international organ-isations in the rest of the world, except investment grants and other capital transfers. The following are included:

a) Contributions of the government to international organisations (excluding taxes payable by member governments to supranational organisations)
b) Any current transfers which general government may receive from the in-stitutions or organizations referred to under (a)
c) Current transfers between governments, either in cash (e.g. payments in-tended to finance the budget deficits of foreign countries or overseas territo-ries) or in kind (e.g. counterpart of gifts of food and military equipment, emergency aid after natural disasters in the form of food, clothing, medi-cines, etc.)
d) Wages and salaries paid by a government, an institution of the European Union or an international organisation, to advisers or technical assistance ex-perts made available to developing countries.

Miscellaneous current transfers (D75)
Miscellaneous current transfers include current transfers to non-profit institu-tions, current transfers between households, and other miscellaneous current transfers.
VAT and GNI-based Union own resources (D76)

Property expenditure and income

Property expenditure and income (D.4) are generated when the owners of financial assets or natural resources give such assets to other institutional units for use. Income generated from the use of financial assets is called in-vestment income while the income from the use of natural resources is rent. Property income is the total sum of investment income and rents. Property income is classified as follows:

a) Interest (D.41);
b) Distributed income of corporations (D.42):
1) Dividends (D.421);
2) Withdrawals from income of quasi-corporations (D.422);
c) Reinvested earnings on direct foreign investment (D.43);
d) Other investment income (D.44):
1) Investment income attributable to policyholders in insurance (D.441);
2) Investment income based on pension entitlements (D.442);
3) Investment income from collective mutual funds belonging to sharehold-ers (D.443);
e) Land and natural resource rents (D.45).

Social benefits other than social transfers in kind

Social benefits other than social transfers in kind (D.62) include:

a) Social security benefits in cash are payable to households by social security funds and are provided under social security schemes. E.g. pensions, unemployment benefits.

b) Social assistance benefits in cash are payable to households by government units to meet the same needs as social insurance benefits but are not made under a social insurance scheme incorporating social contributions and social insurance benefits. E.g. living allowances paid by municipalities, child maintenance allowances.

Social transfers in kind

Social transfers in kind consist of individual goods and services provided as transfers in kind to individual households by government units and non-profit institutions serving households (NPISHs), whether purchased on the market or produced as non-market output by government units or NPISHs.

Subsidies

Subsidies (D.3) are current unrequited payments which general government or the institutions of the European Union make to resident producers, with the objective of influencing their levels of production, their prices or the remuneration of the factors of production. Other non-market producers can receive other subsidies on production only if those payments depend on general regulations applicable to market and non-market producers as well.

Subsidies granted by the Institutions of the European Union cover only current transfers made directly by them to resident producer units.

Subsidies are classified into:

a) subsidies on products (D.31)
(1) import subsidies (D.311)
(2) other subsidies on products (D.319)
b) other subsidies on production (D.39).

Classifications

Classification of Sectors 2023

The Classification of the Functions of Government, COFOG

Accuracy, reliability and timeliness

Overall accuracy

The statistics are derived statistics and based on the national accounts. The statistical population, basic data used and research design are the same as those used the national accounts.

The statistics represent a total survey and the data are obtained from central government accounts, statistical surveys based on the financial statements of municipalities and joint municipal authorities, and profit and loss accounts and annual reports of social security funds, and statistics produced by them. Financial statements of companies considered as part of general government are also used as sources.

Some of the data contained in the statistics (especially the figures for the most recent year) are preliminary, as some of the final data are not yet available at the time of the publication. In connection with the publication, early years of the time series may also be updated to correspond to revised national accounts data.

Timeliness

The statistics are published in December each year. The preliminary figures for the previous year are published in this connection and figures for earlier years are updated. At the time of the publication, the data to be published correspond to the latest national accounts.

Punctuality

Good practice requires that the dates on which national accounts data become available are pre-announced and that the pre-announced publication dates are met.
National accounts data transmissions in the framework of the ESA 2010 transmission programme should be punctually delivered to Eurostat on the date set out in the transmission programme (or before).
Statistics Finland frequently transmits data to Eurostat ahead of the legal deadlines.

Comparability

Comparability - geographical

Comparability of national accounts of EU Member States is ensured by applying common definitions of the European System of Accounts (ESA 2010). Compilation of the statistics in the EU Member States is also guided by the GOFOG methodological manual of Eurostat, the latest version of which was published in 2019.

Comparability - over time

The data contained in the statistics are comparable for the whole time series because the statistics are based on the national accounts that have been prepared in accordance with ESA 2010 definitions since 1975. Comparable time series are available from the year 1990 onwards at main category level of the Classification of the Functions of Government. Time series at more specific classification levels are available from 2001 onwards.

Coherence - cross domain

The data contained in the statistics are consistent with the national accounts and internationally comparable with the statistics produced in other EU Member States. Within the system of national accounts there is full consistency between the domains: annual and quarterly national accounts, government accounts, sector accounts, financial accounts, regional accounts, supply and use tables. However, in practice full consistency may not always be possible and temporary discrepancies might occur. At the time of the publication, the data contained in the statistics on general government expenditure by function are consistent with the latest national accounts. As the statistics on general government expenditure by function are published once a year but the annual national accounts are updated several times each year, the data contained in the statistics are not always fully consistent with each other.
Comparable time series are available from 1990 onwards. The statistics published by Eurostat can be found on the Eurostat website.

Source data and data collections

Source data

Data collection

Most of the data sources used as a basis for the statistics are the same as those used in the preparation of annual national accounts.
National accounts departments typically do not collect data themselves but receive them from other departments or institutions. Sector-specific data sources are described in the methodological description of Finland’s gross national income.

Frequency of data collection

Depending on the sources, the data used as a basis for the statistics are collected on a monthly, quarterly or yearly basis. The statistics are compiled at the end of the year and at that time, most of the financial statements used as a basis for the statistics are already available (including the figures for the most recent year).

Methods

Data compilation

The data contained in the statistics are derived from the annual national accounts. The purpose of the statistics is to broaden the picture of general government expenditure by adding the dimension of the Classification of the Functions of Government to the annual national accounts. The process of preparing the statistics is mostly integrated into the preparation of the annual national accounts so that the figures for the statistics on general government expenditure by function can be directly derived from the data sources of the annual national accounts. However, the compilation of the statistics also facilitates the preparation of the final annual national accounts.

Data validation

The comparison of data from different sources is an integral part of the national accounts compilation. Source data used in national accounts undergo a sequence of checks at Statistics Finland. The data are validated horizontally and vertically in connection with compiling and reporting. The data are reported to Eurostat each year and this agency also monitors the quality and consistency of the statistics.

Principles and outlines

Contact organisation

Statistics Finland

Contact organisation unit

Economic statistics

Legal acts and other agreements

The compilation of statistics is guided by the Statistics Act. The Statistics Act contains provisions on collection of data, processing of data and the obligation to provide data. Besides the Statistics Act, the Data Protection Act and the Act on the Openness of Government Activities are applied to processing of data when producing statistics.

Statistics Finland compiles statistics in line with the EU’s regulations applicable to statistics, which steer the statistical agencies of all EU Member States.

Further information: Statistical legislation

Confidentiality - policy

The data protection of data collected for statistical purposes is guaranteed in accordance with the requirements of the Statistics Act (280/2004), the Act on the Openness of Government Activities (621/1999), the EU's General Data Protection Regulation (EU) 2016/679 and the Data Protection Act (1050/2018). The data materials are protected at all stages of processing with the necessary physical and technical solutions. Statistics Finland has compiled detailed directions and instructions for confidential processing of the data. Employees have access only to the data essential for their duties. The premises where unit-level data are processed are not accessible to outsiders. Members of the personnel have signed a pledge of secrecy upon entering the service. Violation of data protection is punishable.

Further information: Data protection | Statistics Finland (stat.fi)

Confidentiality - data treatment

In a statistical sense, ‘confidential data’ means data which allow statistical units to be identified, either directly or indirectly, thereby disclosing individual information. To determine whether a statistical unit is identifiable, account shall be taken of all relevant means that might reasonably be used by a third party to identify the statistical unit. Although national accounts data are usually highly aggregated, there may be possible cases for detailed breakdowns of aggregates and/or small economies. In these cases measures should be taken in order not to disclose data of a separate statistical unit. Guidance on how to prevent disclosure can be found in the Handbook on Statistical Disclosure Control.

Release policy

Statistics Finland publishes new statistical data at 8 am on weekdays in its web service. The release times of statistics are given in advance in the release calendar available in the web service. The data are public after they have been updated in the web service.

Further information: Publication principles for statistics at Statistics Finland

Data sharing

The statistics are annual statistics and published once a year. The data contained in the statistics are published on the website of the statistics. As required under the ESA 2010 data transmission programme, the data are also reported to Eurostat.

Accessibility and clarity

Statistical data are published as database tables in the StatFin database. The database is the primary publishing site of data, and new data are updated first there. When releasing statistical data, existing database tables can be updated with new data or completely new database tables can be published.

In addition to statistical data published in the StatFin database, a release on the key data is usually published in the web service. If the release contains data concerning several reference periods (e.g. monthly and annual data), a review bringing together these data is published in the web service. Database tables updated at the time of publication are listed both in the release and in the review. In some cases, statistical data can also be published as mere database releases in the StatFin database. No release or review is published in connection with these database releases.

Releases and database tables are published in three languages, in Finnish, Swedish and English. The language versions of releases may have more limited content than in Finnish.

Information about changes in the publication schedules of releases and database tables and about corrections are given as change releases in the web service.

Data revision - policy

Revisions – i.e. improvements in the accuracy of statistical data already published – are a normal feature of statistical production and result in improved quality of statistics. The principle is that statistical data are based on the best available data and information concerning the statistical phenomenon. On the other hand, the revisions are communicated as transparently as possible in advance. Advance communication ensures that the users can prepare for the data revisions.

The reason why data in statistical releases become revised is often caused by the data becoming supplemented. Then the new, revised statistical figure is based on a wider information basis and describes the phenomenon more accurately than before.

Revisions of statistical data may also be caused by the calculation method used, such as annual benchmarking or updating of weight structures. Changes of base years and used classifications may also cause revisions to data.

Quality assurance

Quality management requires comprehensive guidance of activities. The quality management framework of the field of statistics is the European Statistics Code of Practice (CoP). The quality criteria of Official Statistics of Finland are compatible with the European Statistics Code of Practice.

Further information: Quality management | Statistics Finland (stat.fi)

User access

Data are released to all users at the same time. Statistical data may only be handled at Statistics Finland and information on them may be given before release only by persons involved in the production of the statistics concerned or who need the data of the statistics concerned in their own work before the data are published.

Further information: Publication principles for statistics

Unless otherwise separately stated in connection with the product, data or service concerned, Statistics Finland is the producer of the data and the owner of the copyright. The terms of use for statistical data