Purchasing power and uncertainty

The Orpo Government’s program was published on June 16th. Anyone can assess the program and the actions it contains for themselves by reading the outcome of the negotiations on the Finnish Government’s website.

It is a good thing that the Government Program is raising employees’ purchasing power by reducing income taxes. The focus, though, is on low and medium incomes, which leaves a large share of the Union’s members who are in work outside the group of beneficiaries. The reduction in income taxes will be compensated by raising the lower rates of VAT.

Another undoubted positive is the commitment to improving basic skills. The Union campaigned before the elections in the spring for raising the basic level of math skills. Now money will be invested in this, which will hopefully improve the sorry situation. The Government is also committed to steadily raising the funding for research and innovation.

For employees, uncertainty is also increasing. The Government has said that Finland will move towards a Nordic labor market. The list of targeted changes is long. Easier dismissals on personal grounds, giving bargaining rights to all employers regardless of the terms of collective agreements, no pay for the first sick day, shorter notification periods for furloughs, year-long fixed-term contracts without a legitimate reason, limitation of the right to strike, and so on.

Unfortunately, only some things have been copied from other Nordic countries. Balancing elements that would improve workers’ negotiating position have not been included in the Program. So, it looks like there will be more uncertainty in the future.

The list of measures to balance the public finances is long. It also includes changes to the pension system. A lot of people and their families will feel the effects. We should hope—and lobby to ensure—that when cuts are made, they take humanity and balance into account.

None of the items presented in the Program will come into force immediately. Everything has to be prepared, some things with associations. The first actions will be implemented in practice in 2024, either via the budget or new Acts and amendments coming into force. The Union will make an impact on the preparations while lobbying for its members’ interests.

Petteri Oksa
Advocacy director