Alexander Stubb (NCP), the Minister of Finance, has outlined conditions for the tax concessions promised to labour market organisations by the Government.
Stubb reminds that the recent agreement on measures to reduce unit labour costs – the so-called social contract – alone is not enough and urges both sides of the labour market to continue exploring the possibilities of local bargaining in good faith.
“The Government will meet you halfway,” he states. “I sincerely hope that progress is made in local bargaining, allowing us to reduce labour taxation.”
The ball is now in the court of labour market confederations, says Stubb.
“The pact still needs the approval of SAK [the Central Organisation of Finnish Trade Unions]. The round of union-specific negotiations must also be a success. Collective agreements must incorporate both adjustment measures and local bargaining.”
- Sipilä: Social contract allows Finland to catch up with Sweden (03 March, 2016)
- Ministry of Finance: Social contract falls short of objectives (02 March, 2016)
- Sipilä: A number of questions remain unanswered (01 March, 2016)
“The Government is hopefully able to […] adopt major tax concessions to boost purchasing power,” he says.
The Minister of Finance also estimates that the second alternative is in the best interests of no one. “Unless we are able to boost employment, the cycle of spending cuts will continue. I doubt anyone wants that.”
The Taxpayers' Association of Finland has already demanded that the tax concessions be implemented.
“It is crucial that the Government fully compensates for the effects of the proposed increases in social security contributions in order to be able to avoid steep income tax hikes in the years to come. Fragile domestic demand, meanwhile, has to be protected under conditions of continuing wage moderation,” states Teemu Lehtinen, the chief executive of the Taxpayers' Association of Finland.
He calculates that offsetting the austerity measures unveiled by labour market confederations on Monday will necessitate tax concessions worth almost one billion euros.
Aleksi Teivainen – HT
Photo: Markku Ulander – Lehtikuva
Source: Uusi Suomi