Labore's Mika Maliranta suggests increasing the reduced VAT rates. According to Markus Lahtinen of Pellervo's economic research, the reduction of unemployment insurance premiums could give the state a larger slice than is currently the case.
Finland the billion figures presented for the need for further adjustment of the public finances have inflated rapidly.
The government and the Ministry of Finance have given harsh estimates of how many new difficult economic decisions are now needed.
The Ministry has assessedthat in order to avoid the EU's fiscal “observation category”, the government must decide on additional savings of no less than three billion euros already this year.
It is such a big package that the government cannot practically survive without tax increases. This also the Prime Minister Petteri Orpo (cook) has confirmed in public.
Pellervo's economic research (PTT) CEO Markus Lahtinen considers the additional adjustment of three billion euros too large.
In Lahtinen's opinion, a suitable amount could be around 1.5 billion euros.
“These estimates of three billion are, in my opinion, too big for this situation,” Lahtinen tells STT.
The director of Laboren, the former Research Institute for Salaries Mika Maliranta says that previous adjustment decisions have already increased the risk of a prolonged recession in the Finnish economy.
“Now if decisions of that scale are being made on top of it, these risks will increase very significantly. It would be appropriate to think about these before deciding on the three billion,” Maliranta commented to STT.
In any case, there seems to be a big additional adjustment ahead. In that case, according to Maliranna, it is important that all three methods are in use, i.e. spending cuts, tax increases and structural measures.
“How the emphasis is placed between these three is a political decision,” says Maliranta.
Lahtinen believes that tax increases must also play a significant role in additional measures. In his opinion, big cuts can no longer be made to social security. According to Lahtinen, the fins of future growth, i.e. education and research, should not be cut either.
I'm in Lahti thinks, for example, that taxation on tobacco and alcohol could be increased more than has been decided so far.
Lahtinen also mentions the so-called solidarity tax paid by high-income earners, which the government has decided to continue in a relaxed manner. According to him, in the current difficult situation, it is impossible to think that the taxation of high income earners will be reduced.
In addition, in Lahtinen's opinion, a larger portion of the reduction in unemployment insurance premiums could be siphoned off to the state.
“I would say that at least half a billion euros could still be taken from it.”
Maliranta, on the other hand, proposes to increase the reduced value added tax rates, which could collect a lot more tax revenue. For example, the value added tax on food is currently 14 percent, while the general value added tax rate is 24 percent. Purra has also flashed Alvi lifting the food In Talouselämä magazine in December.
Maliranta states that increasing the food Alvi would have negative effects on income distribution. The tax increase would hit low-income earners hard, with a relatively large portion of their income going to food. According to Malirantna, corrective income transfer solutions should be made in the same context.
“With the unification of the value added tax rates, so much tax revenue would be obtained that it would also be sufficient for corrective, compensatory measures,” says Maliranta.
Ministerial budget manager Mika Niemelä says that there are several reasons for the increase in the need for adaptation.
Firstly, the welfare regions made a bigger deficit than expected last year.
“We have set aside one billion euros for it, but it is not enough,” says Niemelä.
The state will compensate welfare regions for the deficits they made last year in 2025. According to Niemelä, the amount to be compensated is about to rise to 1.45 billion euros.
Another reason is the larger-than-expected decrease in municipalities' state contributions. Compensating municipalities for that can increase government spending.
In addition, the ministry's latest economic forecast is gloomier than before. Niemelä says that tax collections now look weaker than in previous estimates.
Finland the deficit of the public finances is expected to be 3.5 percent this year and 3.4 percent of the gross domestic product next year. The deficit is about to exceed the three percent limit of EU economic rules.
According to Niemelä, the danger is that Finland will be subject to the EU's excessive deficit procedure. Therefore, the aim is to reduce the deficit to less than three percent.
Pressure for adjustments is also brought by the goal written in the government program, according to which the deficit should be no more than one percent of GDP at the end of the election period.
“Based on the current forecast, it will not happen, and it will require some new actions.”
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