The indicator describes general government expenditure by function on the basis of national accounts data. The term "general government" denotes the public sector and includes central government, (federal) constituent states, local government, and social security funds. The Finnish general government sector includes the State, municipalities and intermunicipal authorities, the regional government of the Åland Islands, and social security funds.
The measurement of general government expenditure is part of the evaluation of general government finances and the structural coordination of economic and social policy. A key objective of Finland’s economic policy is to maintain sustainable economic growth that at the same supports the stability of the public sector. A prerequisite for stability is a balance between expenditure and revenue. The parallel development of economic and social policy has long been a notable feature of the Nordic welfare society. This is in part a necessity, given that large public sector expenditure cannot be covered without an economic policy that supports employment and the labour sector. A key objective of social policy, moreover, is precisely the support of job-creating economic growth. An economic policy that creates jobs effectively and increases tax revenue significantly reduces pressure on growth of general government expenditure.