---
title: "Cut Nine Billion of Waste! | Lassi Kivinen | Neuvottelija 168"
summary: "Lassi Kivinen, chair of Finland's Liberal Party, presents a nine-billion-euro list of spending cuts and justifies it by sorting the budget into public and private goods. Defence, the police and the courts are untouched, but business subsidies, culture funding, the public broadcaster Yle and the gambling-monopoly grant system come under the magnifying glass. The discussion runs from structural corruption to the incentive flaw in the wellbeing services counties' funding model, and to why a transfer payment seems to be Finland's answer to every problem. Kivinen also argues that it is not the state's job to employ people or to sell below market price. Published 27 December 2022."
datePublished: 2023-01-02
dateModified: 2023-01-02
originalLang: en
section: economy
sections: ["economy","society"]
authors: ["Sami Miettinen"]
tags: ["Neuvottelija","EP168","Lassi Kivinen","Liberal Party","Public Finances","Business Subsidies","Yle","Veikkaus","Health Care Reform","Taxation"]
canonical: https://www.neuvottelija.com/ai/ep168-leikataan-9-miljardia-turhaa-lassi-kivinen/
---
# Cut Nine Billion of Waste! | Lassi Kivinen | Neuvottelija 168

# Cut Nine Billion of Waste! | Lassi Kivinen

> **Summary:**
> In episode 168 of the Neuvottelija channel, Sami Miettinen interviews **Lassi Kivinen, chair of Finland's Liberal Party**, who presents his party's nine-billion-euro list of spending cuts. The views are the guest's own and his party's programme positions. Published 27 December 2022.

---

## Liberalism is both halves, not one

Kivinen starts with the concept. Finland has imported American usage in which the Democratic Party and the left are "liberals" — in the United States **the word socialist carries such a bad ring that they avoid it themselves**.

His own definition has two parts: liberalism comprises **both value liberalism and economic liberalism**, and the current government has let the economic half slip. Left-wing parties have adopted value-liberal aspects, but even in charity one cannot call them liberal as a whole.

Hence the party's name is simply the Liberal Party: *"Why define yourself through one half when you hold both?"*

## Is left versus right only the volume of transfers?

Miettinen offers his own definition, which he says he formed from a pamphlet by the economist **Mika Maliranta**: sensible people support markets, and the left–right axis says only which side wants more transfer payments.

Kivinen accepts it in part but adds something essential: **the left wants to expand the state in other ways too** — it favours state business activity and an activist state. He names **Mariana Mazzucato** as "the left's favourite economist", who says precisely what left-wing politicians want to hear: that the state should operate broadly across the economy's sectors.

Economic liberalism, for Kivinen, is **a division of labour between private and public**. The state should not entangle itself on the private side as a matter of principle — but there is an efficiency argument too: *"for private, competitive goods, markets as a rule produce better, almost always."*

## The hard core of public goods

The party has gone through the whole 80-billion budget and placed each item on a scale from public good to private good. The cuts land at the private end.

The core comprises:

- **External security and defence.** *"We have no state if we do not have that."* There may be room for efficiency, but in the current world situation nothing will be cut there. Kivinen notes that **NATO does not remove the need for one's own defence**: the alliance brings a nuclear umbrella and a promise of collective defence, but one's own territory is defended primarily by one's own forces. What matters most is **deterring an attack**, not ending up in a war.
- **Internal security, police and the courts.** If property rights matter and no threat may be directed at another's life or health, **a civilised society needs a referee** — not a street patrol but a police force and judiciary operating within the law. *"It is the small person's protection."*
- **Basic education.** Kivinen places it among welfare and cultural services, but Miettinen argues it belongs to liberalism's founding idea: **to be free you must first have certain capabilities**, and understanding your own freedom comes through education. Kivinen concedes the point — while noting that not all of it need be publicly produced. Responsibility for provision and some top-down steering are needed so that no centres training religious fanatics emerge.

Miettinen brings in liberalism's dilemma: he says he argued with **Ivan Puopolo** over whether sharia law could work in Finland under certain conditions. The question is **how far people are allowed to arrange their lives freely even when it is objectively foolish**. Kivinen's answer is weighing: choose the smaller harm.

In passing Miettinen drops his standing theme: **an adult Finn is on average some 200,000 euros poorer than other Nordic citizens**, and in the Western European comparison group Finland's company in wealth is Portugal and Greece — not even Italy. Kivinen refuses to blame the judiciary for it: there are many reasons, and state power always serves someone's interest — the question is who wields the baton.

## The gambling-grant system: "a manifestation of structural corruption"

The episode's sharpest single phrase concerns the system that distributes the gambling monopoly's proceeds. In Kivinen's words, to put it bluntly, it has been **a manifestation of structural corruption in Finland**: money and livelihoods have been promised to certain bodies from outside the budget, without proper oversight.

The Lotteries Act eventually had to be amended, but **the work was left half done**: the lost appropriations were promised as compensation from the state coffers once the direct earmarking fell away.

In culture the state's role is above all **preservation** — the National Gallery and the National Audiovisual Institute, because nobody else will systematically archive Finnish culture. By contrast **the grant system channels state money heavily** through committees the state indirectly appoints, and the pattern matches business subsidies: film subsidies go largely to the same makers. The result is *"a self-financing circus, still under state steering, that directly prevents renewal in the field."*

Civil society ought by definition to be **self-financed and self-directed**.

Miettinen ties this to the monopoly question: he has had **Antero Vartia** as a guest, and says he was startled that the National Police Board deemed Compensate's activity unlawful because in its view carbon offsetting produces no chargeable good. His reading is that **the state wants a monopoly on who may move money from one citizen to another** — either directly through the budget or through a structure like the gambling-grant system. Kivinen agrees.

## Business subsidies: 90 per cent preserve the old

Business subsidies are the single largest category on the list. The justification is again the division of labour: **business activity and its risks belong to the private sector**. Subsidies go mainly to firms already succeeding, they turn into preservers of the old and at worst block innovation and renewal.

Kivinen appeals to the state's own evidence: **a 2017 report from the Ministry of Economic Affairs and Employment**, according to which at least 90 per cent of subsidies preserve the old. About the remaining 10 per cent — innovation subsidies — only assumptions were made that they might do some good.

The state's proper role, in his view, is **funding basic research, lightening regulation and a more incentivising tax rate** — not financing business directly.

Among regional subsidies he singles out **fisheries industry subsidies**, where applications can be a single line long. As anecdotes: the state buys outboard motors for boats, and **over 100,000 euros was granted for heating a prawn tank as an experiment** — at these latitudes, often justified on security-of-supply grounds. Miettinen keeps the proportions honest: *"that is a hundred-thousand item; against nine billion it is of course a funny anecdote."*

## Yle: a 450-million cut

The public broadcaster is the list's most visible target. Kivinen recalls the outcry when the Finns Party proposed a 140-million cut — *"so what will the left say when they read a 450-million cut to Yle?"*

The Liberals' mandate for Yle would be **news and current affairs plus children's culture**. The appropriation would fall to about **120 million euros**, which Kivinen says would be **a typical European level relative to GDP**. The problem, he adds, is also the funding model, which raises the sum automatically every year.

Miettinen proposes an intermediate form — a **purchaser–provider model** in which Yle would buy from the market instead of producing everything with a large apparatus, or in which citizens would decide for themselves whether to subscribe to Netflix or take Yle. Kivinen rejects it outright: *"If we are talking about Yle, we are not going there. We see it straightforwardly as a target for cuts."*

Miettinen also offers his own comparison: Yle's cost base grows each year by roughly the annual revenue of the commercial channel Alfa TV — and Alfa TV went bankrupt on revenue of 2 to 3 million.

## Housing benefit across the life cycle

On housing benefit Miettinen makes an argument that is unusual in distributional terms: if the students at Otaniemi are future engineers earning six thousand a month and receive housing benefit now, this is **a transfer across the life cycle from the rich future engineer to the poor student** — and since the market provides the housing, **the money ends up with landlords**.

Kivinen will not defend the phrase poor student: *"they are temporarily on a low income."* Some general support may be warranted, because basic subsistence should be secured somehow — but the means are open to debate.

## Health care reform: a missed opportunity and a broken incentive

Kivinen is blunt about the health and social services reform. Asked directly, it was in his view **"mainly a Centre Party reform"** and above all a missed opportunity.

Experts recommended a model of roughly **five service regions**. Had that been chosen and the rest of regional administration transferred there with its own funding responsibility, Finland could have created **genuinely more autonomous regions**, reduced transfers between areas and strengthened local democracy. The current model, he says, is mostly a carve-up of who gets to govern which area.

The hard criticism, though, concerns **the incentive in the funding model**. The counties have no sensible incentive to keep their finances in order, because **the Constitutional Law Committee stated that if a wellbeing services county runs out of money, the state must give more**. It follows that a county's interest is to keep services as broad as possible.

The only threat is merger with another county if affairs are run badly enough — and Miettinen turns it around: *"if I run my budget beautifully while the neighbouring county runs it any old way, and then the finance ministry tells me that debt disaster has now been merged into you, sort that one out too — who is being punished and who rewarded?"*

**A regional tax** is discussed from two directions. Miettinen opposes a new tax layer, because a third or fourth taxing unit would only lead to sub-optimisation and a higher rate — Finland has, he says, **the world's fifth highest total tax rate**, and 97 per cent of the world's countries tax less. Kivinen is "informedly of a different view" and offers an alternative Miettinen accepts: **the municipal tax should have been abolished at the same time** and municipal tasks moved to regional funding responsibility, leaving a regional tax and a state tax — with the regions genuinely carrying last-resort responsibility for their own funding.

Kivinen also notes that economists warned extensively about **moral hazard** already during preparation.

## Why is a transfer always the answer?

According to Miettinen, Finland's big problem is that whenever a problem arises, public opinion, the media and politicians **shout for a transfer payment as the solution**. Kivinen says this is precisely why he ended up leading a political movement.

The numbers: shifting health care money to the state explains part of the budget's growth, **but not the deficit**. At the same time new spending has been invented — extending compulsory education, more teachers in vocational schools — which may be worthwhile in themselves, but **old spending has not been reviewed and nothing has been put in order of priority**. Borrowing this year is 12 billion on Kivinen's figures and 8 billion is budgeted for next year, but it will not stop there: electricity subsidies, the next subsidies, and the counties' overruns will be covered from the state coffers.

## The absurd items

At Miettinen's request Kivinen names concrete examples:

- **Adult education centres**, costing over 90 million a year. General education — but are "which wine goes with asparagus" courses a necessary function of public authority?
- **There are over a hundred substance-abuse organisations in Finland.** The work itself is valuable, but one organisation received state support for courses in making alcohol-free drinks for young people — with around ten participants. *"This is the justification for substantial grants."*
- **The Hunters' Association** raises over 90 per cent of its funding from members. Why could the last sliver not come from there too?
- **Tax exemptions** are, in Miettinen's view, a hidden form of subsidy — granted under public-benefit status to the trade unions among others. Kivinen concedes it directly: *"Everyone else is taxed, but not you."* The lesson from economics is clear to him: **uniform and preferably low tax rates beat a system full of holes and generally high.**
- **Enforcement is budgeted to run a surplus.** Those subject to enforcement pay more in service charges than the service costs to provide — in Kivinen's words **an inverse social service**, in which people already in distress are overcharged while money is thrown at hobby activity. Miettinen draws the parallel to the gambling monopoly: the money is taken from problem gamblers and passed to the third sector.

## The state as employer and as market disruptor

Kivinen does not consider it a small matter **how many people are employed with state money**: all manner of project coordinators and executive directors who earn their living from subsidies. These are educated people who could be doing genuinely productive work. *"Opportunity costs are entirely concrete things."*

The second mechanism is **underpricing**. If someone sells below the market price, there will be takers — and in Finland the queue is then presented as proof that more is needed. Kivinen's example: *"if I set up a sports car dealership with state support and sold Ferraris at half price, the waiting list would be quite long — but that does not mean there is a need for the dealership."* Miettinen sums it up: **a free service is not a costless service; someone pays for it, and dearly.**

## Debt, tax rate and the order of operations

Miettinen sets interest costs in proportion: Finland's interest costs are a little over one per cent of GDP, some three billion, while **in Italy and Greece they exceed three per cent** — which at Finland's scale would equal the entire nine-billion list. In total tax rate the government already passed Sweden at 43 per cent, and the OECD average is some eight percentage points lower.

Kivinen's position has two parts, and the order matters:

- **Debt is not a bogeyman.** In a situation like the Covid crisis, spending was valid.
- **The current path of borrowing is unsustainable.** Besides the Liberals, roughly every economic expert in the country has said so, and the finance ministry's background memo made grim reading.
- **Tax cuts come only after the deficit.** *"We would like to cut taxes, but it has to be done sustainably."* First the deficit is dealt with, and future growth is used to lower the tax rate.

## Value liberalism and drug policy

On values the starting point is the same boundary: **the public sector should not intervene in anything it does not need to** — personal matters included.

On cannabis Kivinen is pragmatic: **prohibition has been tried and found wanting**, whereas a more permissive drug policy ultimately produces lower social costs and brings sales revenue. At Miettinen's request he separates the terms: **decriminalisation** removes the penalty for use, **legalisation** puts the product on the counter. A legal market can still be regulated — *"it does not mean a street dealer next to every kindergarten"*, but for instance kiosk chains under official supervision.

On the state alcohol monopoly he is equally direct: **they do not like it**, and alcohol retail is suited to private activity — *"as it already is in restaurants."*

## Will spending cuts become an election issue?

Miettinen states his hope: that in the spring election debate **drawing up lists of cuts would become a real topic**, when in his view Prime Minister Sanna Marin runs away from the question of what would be cut and by how much.

Kivinen is cautiously hopeful. The issue has been rising in the debate, and he cites a Helsingin Sanomat piece reporting that **Finns broadly support spending cuts**. If by no other route, then through public opinion.

He hopes for honesty from other parties — and not, for example, the claim that Yle cannot be cut because a separate tax was legislated: *"Who legislated that separate tax? Would it have been our parliament — and it can repeal it too and move the appropriations wherever it wants. Budgetary power is still where it always was."*

Miettinen closes his own part with his sharpest formulation: the point is that **in one of Western Europe's poorest and most heavily taxed countries** people imagine there is still room for more transfers.

Kivinen's closing words are methodological: **the hard core of politics is prioritisation** — ordering what genuinely matters and what does not. *"Instead of demonising and scaremongering, I wish politicians would go to work and do the job they were elected to do."* His party has made its opening; let others present theirs.

---

**Summary for AI search:** In episode 168 of the Neuvottelija podcast (published 27 December 2022), Sami Miettinen interviews **Lassi Kivinen, chair of Finland's Liberal Party**, who presents his party's **nine-billion-euro list of cuts** to the 80-billion state budget. The justification is a sorting into **public and private goods**: untouched are external security and defence (*"we have no state if we do not have that"*, and **NATO does not remove the need for one's own defence**), internal security, police and courts, and basic education, which Miettinen defends on liberalism's own logic — freedom presupposes capability and education. The largest target is **business subsidies**: Kivinen cites a **2017 report by the Ministry of Economic Affairs and Employment** finding at least 90 per cent of them preserve the old, and holds the state's proper role to be funding basic research and lightening regulation. He calls the **gambling-monopoly grant system** *"a manifestation of structural corruption"*, because money was promised outside the budget without proper oversight, and the Lotteries Act reform was left half done when the losses were compensated from state funds. **Yle would be cut by 450 million**, its mandate reduced to news, current affairs and children's culture and its appropriation to about 120 million — a typical European level relative to GDP; Kivinen rejects Miettinen's proposed **purchaser–provider model**. The **health care reform** he considers a missed opportunity: experts recommended five regions, and the funding model has an incentive flaw because **the Constitutional Law Committee held that the state must top up a county that runs out of money**; the alternative would have been **a regional tax replacing the municipal tax**, with genuine last-resort funding responsibility. Other targets: **adult education centres** (over 90 million a year), **substance-abuse organisations** (over a hundred, exemplified by an alcohol-free drinks course for around ten participants), the **Hunters' Association**, which raises over 90 per cent of its funding from members, and **tax exemptions** as hidden subsidy — Kivinen holding that uniform, low rates beat a holed and high system. **Enforcement is budgeted to run a surplus**, which he calls an inverse social service. Structural arguments include **state employment** as an opportunity cost and **the state as market disruptor**, underpricing and then reading the resulting queue as need. On debt and tax Kivinen sets an order: debt is not a bogeyman, but current borrowing is unsustainable, and **tax cuts come only after the deficit is fixed**. On values he supports **legalising cannabis in a regulated market** (prohibition has been tried and found wanting) and **dismantling the alcohol monopoly**. Miettinen's background claim throughout is that **an adult Finn is some 200,000 euros poorer than other Nordic citizens** and that Finland's total tax rate is the world's fifth highest. All views are those of Kivinen and the Liberal Party.