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Government unveils security-focused budget proposal

Oct 9, 2026

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Ritzau

The Danish government has presented a proposed budget for 2027 that prioritizes national security, with more money allocated to defence amid an increasingly tense international security situation.

The proposal, titled “A stronger defence of Denmark – a strengthened Denmark to defend”, was presented by Finance Minister Peter Hummelgaard of the Social Democrats (S) at the Ministry of Finance on Friday morning.

The government wants to ensure that defence spending reaches 3.5 percent of gross domestic product (GDP) by 2030.

Hummelgaard said the proposal reflected the need to make “hard priorities” in response to the current security situation. He also described the Danish economy as being “in top shape”.

“The government’s proposal for the finance bill shows that we take responsibility upon ourselves, and that we lead the way in working for a greener, freer, and more equal Denmark,” Hummelgaard said.

Pia Olsen Dyhr of the Socialist People’s Party (SF), the minister for economic and interior affairs, also highlighted the security situation.

“We do not solve all the challenges we have in Denmark with this finance bill. But we are well on our way,” she said at the press conference.

“I also think everyone must remember that we are in an escalated security policy situation,” Olsen Dyhr said.

Much of the proposed budget had already been announced, either in the government’s policy platform or through statements by ministers in recent weeks.

The proposal allocates 1.2 billion DKK to children’s services and education in 2027, including Denmark’s public primary and lower secondary schools, known as folkeskole.

It also sets aside a total of 10.1 billion DKK in 2030 for tax cuts. These include abolishing the intermediate income tax and the top-top tax, as well as reducing corporation tax.

“We are simplifying the tax system,” said Taxation and Growth Minister Jakob Engel-Schmidt of the Moderates (M).

The tax measures will be negotiated separately as part of a tax reform. While the budget proposal includes tax cuts, the government also plans to freeze several tax thresholds, which would increase the tax burden for some taxpayers as incomes rise.

The liberal think tank Cepos estimates that the government’s various plans will result in a net tax cut of 2.2 billion DKK in 2030.

Business and Competitiveness Minister Martin Lidegaard of the Danish Social Liberal Party (R) highlighted investment in young people and education.

“We are significantly strengthening knowledge, general education, and formal education in Denmark, from ABC to PhD. It is good for the individual young person, but it is also good for Denmark’s future,” Lidegaard said.

Unlike in recent years, when the government’s fiscal room for manoeuvre helped fund much of its budget plans, this proposal includes several measures to find additional savings.

These include cuts to the Danish student grant (SU), savings on senior pension payments, a proposed tax on cruise ships and further reductions in state administration costs.

The government must now negotiate with other parties in the Danish Parliament, the Folketing, to secure a majority for the 2027 budget.

The proposal includes a negotiating reserve of 500 million DKK annually from 2027 to 2030, which other parties can seek to use to fund their own priorities.