The National Coalition and Social Democrats are embroiled in a spirited debate over the direction of economic policy making in Finland.
Kalle Jokinen, the chairperson of the National Coalition Parliamentary Group, declared on Wednesday that Antti Rinne, the chairperson of the Social Democrats, and his “billion-euro populism” are presently the most serious threats to the Finnish economy.
His statement was a response to remarks made by Rinne on Tuesday. Rinne accused the National Coalition of “debt populism” and argued that the party has sought to profile itself as a stringent economic agent while being the single biggest contributor to the debt burden of the central government.
“The National Coalition has raised Finland’s central government debt more than any other party. The sum stands at well over 100 billion euros, and it’ll grow again next year,” he was quoted as saying in the summer meeting of the Social Democrats by Iltalehti.
The National Coalition, he added, has demonstrated a willingness to increase the debt burden, while regularly claiming that there is no funding for forward-looking investments.
“The National Coalition is spending funds on the tax cuts of high-income earners – its own buddies. Whenever we’re talking about improving the position of low and middle-income earners, the National Coalition views that we’re out of funds,” slammed Rinne.
Such claims are simply not accurate, retorted Jokinen.
“Rinne’s logic is that because the National Coalition has been part of the government for 27 of the past 31 years, the increase in central government debt is because of the National Coalition. Rinne completely pushes aside the fact that numerous recessions have taken place over that period of time.”
Jokinen also pointed out that the government has introduced cuts worth approximately 1.3 billion euros in labour taxation during this electoral term, focusing particularly on low and middle-income earners.
“The cuts were introduced to promote growth, employment and competitiveness,” he added.
The Parliament’s Information Service has calculated that the earnings of low-income earners have decreased in spite of the cuts in income tax rates, while those of earners in higher income deciles have crept up due to measures introduced by the government of Prime Minister Juha Sipilä (Centre). A similar conclusion has been reached by the Finnish Federation for Social Affairs and Health (SOSTE).
Rinne on Tuesday also reiterated his promise to raise pensions not exceeding 1,400 euros a month.
Jokinen argued that it is populist to make such promises at a time when the central government debt continues to increase despite the positive economic situation in Finland. He also reminded that the cyclical situation does not eliminate the need for additional structural economic reforms.
“I think Rinne’s billion-euro populism is the most serious threat to the Finnish economy today,” he said.
Aleksi Teivainen – HT
Photo: Mikko Stig, Antti Aimo-Koivisto – Lehtikuva
Source: Uusi Suomi