The Danish government has proposed a budget for 2027 that emphasizes national security, with increased funding for defense in light of a 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 October 10, 2026.
The government aims for defense spending to reach 3.5 percent of gross domestic product (GDP) by 2030. Hummelgaard stated that the proposal reflects the need for “hard priorities” in response to the current security landscape, and described the Danish economy as being “in top shape.” He added, “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.”
Pia Olsen Dyhr of the Socialist People’s Party (SF), the minister for economic and interior affairs, also addressed the security situation, noting, “We do not solve all the challenges we have in Denmark with this finance bill. But we are well on our way.” She emphasized the escalated security policy situation.
Much of the proposed budget had been previously announced in the government’s policy platform or through ministerial statements. The proposal allocates 1.2 billion DKK to children’s services and education in 2027, which includes funding for Denmark’s public primary and lower secondary schools, known as folkeskole.
Additionally, the budget sets aside a total of 10.1 billion DKK in 2030 for tax cuts, including the abolition of the intermediate income tax and the top-top tax, as well as a reduction in corporation tax. Taxation and Growth Minister Jakob Engel-Schmidt of the Moderates (M) stated, “We are simplifying the tax system.”
The tax measures will be negotiated separately as part of a tax reform. While the budget includes tax cuts, the government also plans to freeze several tax thresholds, which may increase the tax burden for some taxpayers as incomes rise. The liberal think tank Cepos estimates that the government’s 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 the importance of investing in young people and education, stating, “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.”
Unlike in previous years, the government’s fiscal room for maneuver is limited, prompting the inclusion of measures to find additional savings. These measures 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 use to fund their own priorities.