Jyri Häkämies, the director general at the Confederation of Finnish Industries (EK), has reminded the Government of its so-called 50-50 clause. The Confederation of Finnish Industries (EK) has re-affirmed its unequivocal opposition to all new tax increments, emphasising that in the current, bleak economic situation further tax hikes could result in a loss of jobs and decrease in investment activities.

The purported perils of the tax hikes are the gist of the confederation's message to the Government, which is scheduled to convene for its so-called framework session next week to contemplate the measures needed to balance the national economy.

Jyri Häkämies, the director general at EK, underlines that the required savings of an estimated three billion euros must be realised through cuts in public and municipal spending and by carrying out the major structural reforms – the reform of the social welfare and health care system, the reform of municipal structures and the reform of the pension system.

EK agrees with the consensus that the adjustment measures should be phased over a several-year period.

In addition, the confederation called attention to the promise made by the Government to achieve half of the savings with tax increments and the other half with spending cuts. Thus far, however, 70 per cent of the savings have effectively been achieved with tax hikes and only 30 per cent with spending cuts, because the decision to cut state subsidies to local governments has induced a rise in municipal tax rates, EK highlighted.

The Government should therefore refrain from further tax increments, if it plans to abide by its own rules, the confederation argues.

Häkämies estimates that the most notable savings can be achieved in the social welfare and health care sector, because that is where also the costs are the highest. On the other hand, EK cautions the Government against slashing its spending on education and research.

Heikki Arola – HS
Aleksi Teivainen – HT
Photo: Heikki Saukkomaa / Lehtikuva