Podcast · #paasipodi #71 · 2026-04-30 · 1:01:45 · In Finnish
Finland's 2026 Budget Framework — Sami Miettinen on Paasipodi #71
Published as “Kehysriihi 2026. Mitä jäi käteen? | #paasipodi 71”
Hosted by: Martin Paasi
Recorded two days after the Orpo government’s 2026 spending-limits session was published, this is a line-by-line reading of what was actually decided — with, as usual, a quarter of an hour of tooling talk first, because both men now spend their nights building.
The agent stack, briefly. Miettinen’s principal agent Samantha runs on OpenClaw on its own Mac Mini with its own persistent memory structures and skills; his inner circle can query it directly. Beneath it sits a second AI worker, Stöbä, which holds local memory secure enough for investment-banking material, and a Hermes subagent besides. The layered design is deliberate: secrets stay on hardware he owns, reachable only through SSH and Tailscale. He is weighing a Mac Studio so that Google’s free Gemma model can run locally — his framing being that you fight the American giants by not opening your wallet to them, the €15,000 machine notwithstanding.
Paasi’s Hello Humans has moved on since episode 66. Gemini, the Chinese model Qwen and Perplexity now run deep-research bots producing an 8,000-character brief — about ten A4 pages of facts — for every episode, and the debating models must stay inside it; when one wanders off, the Claude host corrects it against the brief. A Sonnet model orchestrates the three-model team through prompts. Running costs are around a thousand euros a month.
On data centres, Miettinen breaks with Risto Siilasmaa: build them. Take single data centres without a strategy around them and nothing comes of it — that much he agrees with — but local inference capacity is worth having as domestic reserve, and if the hardware ends up underemployed, Finland gets it cheaply for its own use. He offers to find work for a ten-billion-euro hall himself if nobody else does.
The self-employed pension reform (YEL)
Both men put this first, and Paasi calls it the best thing in the whole package. In future a self-employed person may choose whether their pension contribution is based on actual income or on the notional “work income” figure used today. On the published calculations, around 40 per cent — the small end — see contributions fall, 40 per cent see no change, and higher earners pay somewhat more. The reform is not elegant, and the choice-based structure is not beautiful, but the feedback in the parliamentary group has been strongly positive, including from people who will pay more.
The substance of the complaint being fixed is the old assessment-based system, under which the pension cluster picked a notional salary grade for you and issued a distraint-eligible invoice regardless of whether you were ill or had any cash flow at all. Miettinen knows people who stopped being entrepreneurs over it, and both treat it as a straightforward barrier to founding companies — which matters because Finland’s largest employing cluster is small and medium-sized firms, not large ones. Full effect arrives over 28 years; the transition includes 25 per cent relief tokens for cash-flow crunches. What did not make it is a funded component, which remains under study. Miettinen’s dictator’s version would have moved ten billion out of the earnings-pension pot to capitalise it.
Share option taxation
Miettinen’s second pick, and in his view the second-best item in the package. The old rule taxed options as earned income at the moment of grant, on a notional valuation of an unlisted company — so a person with a €40,000–100,000 salary could face a tax bill of that order on a paper gain that might never materialise. The predictable result: people declined options, the instrument fell out of use, and the state’s tax revenue fell with it. As Miettinen puts it, you get less of what you tax more, and here the structural mistake — taxing in advance — guaranteed there would be nothing at all.
The point of options is recruitment. A five-person startup wanting a genuine specialist away from a well-paid job needs an incentive: the right to buy shares at a fixed strike price inside a window several years out. If the strike is €10 and the share is worth €7, the option is worth nothing; at €20 it is worth ten euros a share.
Under the new treatment, tax falls when the option is exercised or the shares sold. The understanding Paasi obtained — passed on from a question Jyri Engeström had put on LinkedIn, and explicitly flagged as not yet nailed down — is that the value from zero up to the strike price is treated as earned income, and the gain from the strike price to market price as capital income. Miettinen’s view is that even deferral alone would have been fair, but that this is the correct split, and he notes for the argument’s sake that Finland’s 34 per cent capital income rate is, on the Tax Foundation’s European comparison, roughly the third-highest in Europe. Both regard the old rule as a poison pill in the Finnish startup and unlisted-company scene, and one of the drivers pushing founders to the United States.
Neither item, they note, was covered much in the press, which concentrated on cuts to third-sector organisations — and on the corporate tax rate falling to 18 per cent, a decision taken a year earlier and reported as if it were new.
Youth employment
The employment voucher rises from €30 million to €50 million; the state hires 500 summer workers and funds youth unemployment pilots. Miettinen — who describes himself as close to libertarian on the size of the public sector — supports it, on the grounds that entry-level work is precisely what AI threatens first, and that this cohort has already been hit twice: by the pandemic, and by a comprehensive school system whose PISA results have fallen from the top places to somewhere around thirtieth while Estonia has climbed from where Finland now sits to where Finland used to be. His practical ask is that every company take on one summer worker.
Household deduction, first-home loans, renovation
The household deduction maximum rises from €1,600 to €2,100 and the reimbursement rate from 35 to 40 per cent — the mechanism being that people employ other people. Miettinen adds a warning from his own experience: work on a housing company’s structures does not qualify, and arguing otherwise earned him a penalty on top of the disallowance, a thing he now checks with an AI before filing anything.
On ASP first-home loans, the borrower’s own contribution halves from 10 to 5 per cent, the state guarantee rises to 95 per cent and the term extends to 40 years. Miettinen is unenthusiastic — he built his own down payment out of low-cost index funds — but concedes the instrument works for the risk-averse and that a 40-year term is fine if you know what you are doing. What he does defend is the habit underneath it: saving ahead is neither capitalist nor left-wing, it is simply something everyone should do, like brushing your teeth. And put a few hundred euros into a fund for a child at birth: five thousand euros, left alone, buys that child an extra average Finnish pension.
€110 million goes to energy renovation grants. Miettinen considers this small change, and — in a break with much of the press and several economists — is glad the transfer tax was not temporarily zeroed. Two per cent is genuinely low; run the search yourself, he says, before blaming the transfer tax for a frozen housing market.
The €17 billion problem
Half a billion in other savings was found, which Miettinen calls a real achievement a year out from an election even though it is small against a €17 billion annual deficit. His structural observation — offered explicitly as an observation, not a position — is that without the growth in health and social care spending, interest costs and defence spending, the whole thing would balance.
His advice to listeners is unsentimental and aimed squarely at people in a weak position: the cuts are coming regardless of which party leads the next government, because the money ran out twenty years ago and the debt is accelerating. The best protection for your own household is to get free of cash flows somebody else decides, which in his framing means supporting tax cuts funded by cutting public administration first. He notes he has been unemployed himself, for a little over a year, and does not think the point is easy.
On the €17 billion’s authorship the two spar productively. Paasi stops Miettinen mid-swing over the €6 billion Uniper loss: whatever one thinks of the outcome, the minister routinely blamed for it had no ability to influence it — she was not in those rooms, Fortum conducted the negotiations, and beating one person with that bat indefinitely is unreasonable. Miettinen takes the opposite tack on principle rather than person: if you want ministers in the governance structures of state-owned companies, you must also accept the responsibility that comes with it; if amateurs sit in those structures, you get amateur work, so stop playing at state ownership. Norway’s oil fund, he notes, is run by a former investment banker and is running full AI integrations. A parliamentary audit committee memo on the Uniper case is coming to the chamber, which both welcome — Miettinen without expecting it to be gospel.
His own nominee for a multi-billion share of the deficit is not a person but an accounting convention: for decades the surplus of the pension funds was counted as a state surplus, masking roughly three billion a year of genuine deficit and letting Finland pretend to be in balance. It has now been removed, and the gap it was hiding is visible.
He is equally wary of the state treasury, the finance ministry and the pension cluster as sources: on the interest-rate hedging position, for example, the same people explain the billions saved earlier without dwelling on the losses booked while unwinding the option positions. They speak their own book when asked, and if you are not a finance professional you will not know the right questions to ask.
Eastern Finland and the third sector
The special programme for eastern Finland continues, with special economic zones under preparation — a circle drawn on the map inside which tax relief and other measures apply. Miettinen finds it an interesting experiment.
The larger fight is over the 724 social and health organisations receiving public funding. Neither man disputes that the organisations do important work. The question is where the money goes: to the children and people in distress, or to administration and €150,000 director salaries at organisations sitting on million-euro portfolios — 724 administrations where one could do. Fifty million was cut at state level and twenty-five million moved to the wellbeing services counties; Miettinen would have cut a zero more and pushed the money down to the municipal level, of which there are 292 and where he sees the same empty offices and bureaucracy. His constitutional point is the sharper one: if the work matters, fund it from the budget where parliament decides, rather than routing taxpayers’ money to old politicians appointed as directors with publicly funded assistants beneath them.
Defence, Ukraine and the exit
Defence spending is the third leg of the deficit, and Miettinen is uneasy about how fast it was raised, while acknowledging the drones falling into the Gulf of Finland show real gaps, and that the F-35 will be extremely expensive. Paasi’s counterpoint is that growing up inside a long peace does not mean the peace continues indefinitely. Both note Russia’s shutdown of internet access in the Moscow region and the hunt for VPN users as a self-defeating decision; both are struck by Ukraine’s long-range drone competence against Baltic oil terminals; and both read the ratification of the €90 billion EU package after the change of government in Hungary as a genuinely good sign.
Paasi closes with the honest partisan disclosure the episode has been circling: as an independent he can be critical of the governing parties too, but his verdict on this session is that real structural reforms were made — and that he awaits a change of government with apprehension.
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