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New institutions, updates and evaluations - Seppo Orjaniesmi, Finland

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This presentation was made by Seppo Orjaniesmi, Finland, at the 9th Annual Meeting of the OECD network of Parliamentary Budget Officials and Independent Fiscal Institutions held in Edinburgh, Scotland, on 6-7 April 2017.

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New institutions, updates and evaluations - Seppo Orjaniesmi, Finland

  1. 1. Talouspolitiikan arviointineuvosto Economic Policy Council of Finland Seppo Orjasniemi Secretary General 6 April 2017 TALOUSPOLITIIKAN ARVIOINTINEUVOSTO RÅDET FÖR UTVÄRDERING AV DEN EKONOMISKA POLITIKEN ECONOMIC POLICY COUNCIL
  2. 2. Two Independent Fiscal Institutions • Economic Policy Council – Established in January 2014 by government decree – Provides independent evaluation of economic policies in Finland – Broad mandate • National Audit Office – Supervises compliance with the Stability and Growth Pact, since 2014 – Audits the Budgetary Framework
  3. 3. The Economic Policy Council • Five members appointed by the government for five years – Chairman and three other members proposed by economic departments of Finnish universities • At least one council member must be a member of an international research institution – One member with background in other social sciences proposed by Academy of Finland • Permanent secretariat – Secretariat located in VATT Institute for Economic Research, works independently – Secretary general nominated by Ministry of Finance, based on proposal by VATT and the Council
  4. 4. Mandate The Council’s mandate is to evaluate economic policy, in particular: 1. the appropriateness of economic policy goals 2. whether the goals have been achieved and whether the means to achieve the policy goals have been appropriate 3. the quality of the forecasting and assessment methods used in policy planning 4. coordination of different aspects of economic policy and how they relate to other social policies 5. the success of economic policy, especially with respect to economic growth and stability, employment and the long- term sustainability of public finances 6. the appropriateness of economic policy institutions
  5. 5. IFI principles • Economic policy discussed from domestic perspective • Statutory independence • Broad mandate • Resources – Appropriations separated from the mother institution – Secretariat, two economists – Background research reports – Support services from VATT • Reports and opinions published
  6. 6. Work Program for 2017 • In 2017 the Council focuses on publication of its annual report – Finalized and published in January 2018 • Also separate comments on fiscal policy – Comment on General Government Fiscal Plan in May – Comment on budget draft on October
  7. 7. Previous reports • 2014 report – Fiscal adjustment should be postponed till 2017-2018 – Pension reform decreases the sustainability gap – Tax system should be simplified • 2015 report – Fiscal policy stance is adequate, but overall tax rate should not be restricted – Short-term policy goals should be in line with the long run sustainability – Government overestimates the policy effects on employment – Analysis on Government Strategic program • 2016 report – Fiscal stance loosened in 2017, while long run sustainability requires adjustments – Government has not presented a plan to reach its policy goals – Analysis on employment policy and wage setting • Altogether 12 background reports
  8. 8. Coping with challenges • No direct reporting to government or parliament – Reports have received large publicity – Discussed in Parliamentary committees – Ministry of Finance has given public reply • Broad mandate requires focusing – Fiscal policy discussed in every report • Comprehensive policy analysis requires long report – Multiple background reports
  9. 9. Thank you for your attention!

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