Main government partners the National Coalition and Social Democratic parties are looking forward to wrinkle-free budget talks in August, pointing out that the most painful decisions relating to budget cuts and tax hikes were already made during the spring.
However the opposition says it is suspicious of the apparent unbreakable consensus holding together Prime Minister Jyrki Katainen’s six-party coalition.
Finance Minister Jutta Urpilainen begins finalising her budget presentation on Monday ahead of its publication on Wednesday.
Jan Vapaavuori, head of the National Coalition parliamentary group, said he expects no fireworks since most of the budget will reflect decisions about spending cuts and tax hikes already taken during the spring.
Leader of the Social Democratic parliamentary group Jouni Backman said that upholding decisions made in the spring will add credibility to the government’s budget program.
Opposition parties call for growth, job creation
The opposition Finns Party and Centre Party both have clear expectations of the budget, with the Finns Party’s Timo Soini calling for measures to encourage growth and employment.
“It’s the only way to ensure that we will have jobs, income, entrepreneurship, a vision for the future,” he said.
Newly-elected Centre Party chair Juha Sipilä appeared to be singing from the same hymn book as he called for jobs and structural reform in the industrial sector.
“This is an urgent task for us, which has been forgotten because of the euro crisis. We need to put effort into this as well,” he urged.
Vapaavuori and Backman also had expectations that the budget would address social issues, some of which had come to light in recent times.
“Some targeted efforts would be needed, some of them resulting from these Nokia layoffs to be focused on some municipalities. And of course those that specifically promote the competitiveness of the Finnish export sector,” said Jan Vapaavuori.
Backman said he'd be looking for measures to boost employment, particularly among the long term unemployed and the young.
Cracks in government solidarity?
Both opposition parties were keeping a keen eye out for signs of possible cracks in the coalition government.
“I have wondered how the National Coalition has been able to dictate the government’s economic policy and now I’m hoping to see a change toward a more humane and socially equitable direction,” Soini said.
“The elder care bill that was debated in June shows that there are differences. It can’t be easy,” Sipilä said, referring to a contentious bill to reform services for seniors in care facilities.
Tax hikes and spending cuts
Key budgetary measures agreed in the spring include tax increases aimed at pulling some 1.5 billion euros into state coffers.
The tax hikes include a one-percent increase in value added tax, and an effective increase in income taxes caused by government’s decision to abandon salary adjustments linked to the cost-of-living index.
Additionally, employees earning more than 100,000 euros annually will be subjected to a new solidarity tax.
Government will publish its budget presentation on Wednesday. The proposal will be discussed by government during August before it is tabled in parliament during the autumn.
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