Antti Lindtman, the chairperson of the Social Democratic Party, attended a plenary session in parliament in Helsinki on Tuesday, 16 April 2024. Lindtman on Wednesday presented the opposition party’s plan for reducing the national debt burden on YLE A-studio. (Emmi Korhonen – Lehtikuva)

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THE SOCIAL DEMOCRATIC PARTY has presented a 2.5-billion-euro fiscal adjustment package as an alternative to the spending cuts and tax hikes announced by the government on Tuesday.

Antti Lindtman, the chairperson of the Social Democrats, admitted on YLE A-studio on Wednesday that Finland has to take action to reduce its debt burden.

He argued that the government should have taken a harder look at revenue sources such as the excise tax, dividend tax, interest expense deduction and foreign real estate companies. The opposition party, he stated, would not have embarked on a spree of spending cuts but rather approached the endeavour from a different standpoint – first by re-examining previously announced spending increases and tax decisions.

“We would’ve first examined the government’s spending increases and tax solutions that weaken the public economy, as has been recommended by the National Audit Office,” he said.

As examples of such decisions he pointed to subsidies paid to private health care providers, the excise tax cut and the tax treatment of high-income earners. The Social Democratic Party would also be willing to adjust business subsidies and subsidies with a detrimental impact on the environment.

Its tax measures would add 1.5 billion euros and other measures another 1 billion euros to state coffers.

Lindtman viewed that the government granted special protection only to the wealthy and high-income earners in its newly concluded framework session: the tax decisions only benefit people at the high end of the income scale, he argued, the single parent of two children who works full time will lose hundreds of euros a month.

“You’re cutting from low-income wage earners making less than 1,500 euros a month in gross income. The income group of cabinet ministers is getting 1,700 euros. If this is the government’s understanding of inequality, I don’t want to know what’s the government’s understanding of inequality,” he slammed.

The plan was rejected as vastly insufficient by Antti Häkkänen, the minister of defence and deputy chairperson of the National Coalition. “Finland would’ve really ended up on the same road as Greece,” he said on A-studio.

Häkkänen declined to evaluate the equality of the measures, pointing to the difficulty of such an exercise.

“Finland has 5.5 million different views on equality. We have to tailor a programme that enables the country to overcome its debt cycle. Which groups are ready to lift Finland from the mire? Can we bring debt under control, can we get the economy growing?”

Also other opposition parties have criticised the outcome of the framework session, according to Helsingin Sanomat.

Annika Saarikko, the chairperson of the Centre, on Tuesday said the government seems intent on continuing to complicate the lives of families with children and erode child welfare, elderly care and health care services in many parts of Finland.

“Health care costs will increase, not decrease, as a result of this,” she wrote in a press release from the Centre.

The fiscal adjustment package unveiled by the government is characterised by inequality and lack of a long-term vision for a healthy economy, estimated Sofia Virta, the chairperson of the Green League. Atte Harjanne, the chairperson of the Green Parliamentary Group, viewed in turn that raising the general value-added tax rate to 25.5 per cent is in principle a sound measure to increase tax revenue.

“Raising it brusquely to one of the highest levels in Europe at a time when low-income people are already facing substantial cuts will spell trouble for the daily lives of many. A VAT of 25.5 per cent suggests the government didn’t have the courage to [levy] Pigouvian taxes and trim subsidies,” Harjanne wrote on X.

The package trashed out at the framework session sends “a catastrophic message” to low-income earners, people with sicknesses, students and small entrepreneurs, commented Li Andersson, the chairperson of the Left Alliance.

Harry Harkimo of Movement Now, in turn, slammed the package for failing to spur economic growth.

Aleksi Teivainen – HT

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