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Cabinet aims to boost employment, exports and security in next 2 years

The Finnish government has unveiled measures it says will raise the employment rate while maintaining fiscal discipline and beefing up security. The blueprint comes as the three-party coalition marks the midway point of its four-year legislative term. At least some new jobs will be opening up in the cabinet itself.

Lapset leikkivät Suotorpan päiväkodin pihalla Kustavissa.
The government wants to get more kids into daycare and more parents into the workforce. Image: Roni Lehti / Lehtikuva
Wif Stenger

Prime Minister Juha Sipilä’s three-party coalition government announced a raft of ambitious plans for the second half of its legislative term late Tuesday. Cabinet members had just emerged from a two-day midterm conference weighing the efficacy of measures imposed since they took office in late May, 2015.

According to the premier, the main target is cutting unemployment, primarily by reducing incentives to remain outside of the workforce.

One of the prime ways of tackling this, according to the government's proposal, would be lowering fees for early childhood learning and hiring more staff for daycare centres, Sipilä told reporters late in the evening at his official residence, Kesäranta.

Daycare costs would be waived altogether for some 7,000 low-income families, while others would see fees drop. The maximum monthly fee is now 290 euros a month per child.

Jobseekers to be "activated"

The cabinet has set an ambitious target of 72 percent employment, up from last year's average of 68.7 percent.

To do so, it aims to encourage people to move to where work is available through various incentives. TE employment offices will get an extra 50 million euros to help "activate" unemployed people, while there will be slightly tighter restrictions on jobless benefits for those who are not categorised as "actively" looking for work.

If the plan is approved by Parliament, there will also be better unemployment and sick-leave benefits for the self-employed, and clearer rules on so-called "zero-hour contracts" that do not guarantee any minimum number of working hours. Other steps are aimed at helping entrepreneurs who declare bankruptcy.

More funds to be returned to education

Following the deep cuts in education in recent years, the government now proposes a 400-million-euro boost for education and research. Seventy million of that would go to the Finnish Funding Agency for Innovation (Tekes) with 50 million earmarked for the Academy of Finland. Eighty million more would go to professional training. Fifty million would be ladled out to boost exports and tourism.

Under the plan, comprehensive schools will receive 15 million euros to promote equality, particularly by shrinking class sizes and adding special education in "challenging areas". Another 45 million euros is to be spent on fighting youth marginalisation.

There would also be slight rises in grants for university-level students with children and care allowances for pensioners.

On the other hand, housing benefits would be trimmed in the hopes that this might rein the rise in rents and in housing allowances, which now total some two billion euros a year.

More security – and more ministers

Perhaps with recent extremist attacks in mind, the government also wants to invest 100 million euros more in internal security. Supplementary funding would go to the Defence Forces, police and the Security Intelligence Service (Supo).

Altogether the government estimates that its proposals would bring four billion euros in annual savings, with a roughly equal amount to be spent on reform measures. It calculates that reforms to social service and health care, as well as consolidating Finland's provinces will save three billion euros.

Sipilä predicts that all of the government's targets will be met if economic growth settles into a track of two percent annual growth. Last year it was 1.4 percent, following four years where GDP shrank or was nearly stagnant.

Finance Minister Petteri Orpo of the conservative National Coalition Party (NCP) praised Sipilä and wished him a happy 56th birthday, calling the reform package "a good gift combining responsible financial management with a strong look toward the future".

The cabinet also agreed to hire three more cabinet ministers to share the workload. The NCP will take over the justice portfolio from the Finns Party, which will in turn take over culture, sports and European affairs. Sipilä's Centre may also split the current Minister of Agriculture, Forestry, Environment and Housing Kimmo Tiilikainen's duties with another minister. Some new ministers may be announced as early as this week.

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