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The Finnish government announced the conclusions of its budget session in a news conference in Helsinki on Wednesday, 16 September 2020. (Markku Ulander – Lehtikuva)


THE RULING COALITION has agreed on “numerous measures” to improve the employment situation and promote the transition to a carbon-neutral society in Finland, according to Prime Minister Sanna Marin (SDP).

The government yesterday announced it has wrapped up its budget negotiations, revealing it decided on measures that should add 31,000–36,000 people to the ranks of the employed.

The package of measures laid out by the five ruling parties also includes a few measures that were announced earlier, such as the scaling down of the unemployment path to retirement, which is expected to have an employment impact of 6,500–7,000.

One of the key new measures is reforming employment services to provide more support to job seekers at the start of their periods of unemployment and after each six-month period of unemployment. The reform will also oblige job seekers to apply for up to four openings a month depending on their work capacity and the regional labour market situation.

A failure to apply for the requisite number of openings could lead to a suspension of unemployment benefits.

Branded the second coming of the activation model for unemployment security, the reform is expected to grow the ranks of the employed by 9,500–10,000.

Raising the school-leaving age, lowering early-childhood education fees and expanding the wage subsidy scheme, in turn, are expected to grow the ranks by 1,600, 2,500–3,600 and 500–1,000, respectively.

The government additionally asked labour market organisations to draft measures to bring 10,000–12,000 over 55-year-old job seekers back to the ranks of the employed and improve both their labour market position and ability to cope in working life. The organisations must come up with a credible proposal to meet the target by November.

“If the labour market organisations don’t give an answer that meets the target, the government will make the decisions itself,” said Minister of Science and Culture Annika Saarikko (Centre).

Industrial energy tax cut, rebates abolished

The government also announced a handful of measures designed to make the country carbon-neutral by 2035 and carbon-negative shortly thereafter.

The industrial energy tax, it confirmed, will be slashed to the lowest level allowed by the European Union. The rebates for industrial energy tax will be abolished after a four-year transition period during which the existing energy subsidies will be used to encourage industries to shift to emission-free technologies.

The scheme to compensate for indirect costs arising from emissions trading will be scrapped.

“A new temporary electrification subsidy will be created for energy-intensive industries, which provides a more effective incentive for carbon-neutral production and the electrification of energy-intensive companies while taking cost competitiveness into consideration,” its press release reads.

The tax on heating fuels such as coal, natural gas and fuel oil will be increased to generate 105 million euros in additional tax revenue as of the start of 2021. The tax on peat will be raised by 2.7 euros per megawatt hour and incorporated with a price floor mechanism that, together with the cost of emission rights, ensures the energy use of peat decreases by at least 50 per cent by 2030.

Emma Kari (Greens) tweeted that the decision will almost double the tax on peat.

The government is proposing a budget worth 64.2 billion euros for 2021. The budget shows a deficit of 10.8 billion euros, raising total central government debt to 135 billion euros during the course of next year.

Aleksi Teivainen – HT
Source: Uusi Suomi