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Tuesday's papers: Lower income tax, chaotic Brexit and alcohol use

Today's papers look into the finance minister's plans to lower income taxes, an ex-MP's view on the Brexit talks, and imbibing habits in Finland.

Olutpulloja alkon hyllyssä.
Image: Ismo Pekkarinen / AOP

The minister of finance, Petteri Orpo, predicted on Monday evening that income taxes will fall by 200-300 million euros next year, while excise duties and environmental protection taxes will rise, reports daily Aamulehti.

According to Orpo, next year’s budget proposal will include tax reductions that will be distributed to all income brackets.

"We have to encourage people to work and to achieve a high employment rate if we want Finland to succeed," the National Coalition Party politician said.

Orpo touts the plan as a "green-blue tax solution", where the focus will shift from taxing work and entrepreneurship to taxing consumption. However, it is not yet clear which consumption taxes will rise, Aamulehti reports.

Despite the ongoing economic growth, Orpo said Finland will continue to accrue about 1.5-2 billion euros in debt next year. As a result, the government will maintain its index freezes on benefits, under which scheduled inflation-based increases to basic social security payments in Finland have been suspended since 2015.

"We are concerned about the aging population and, without a doubt, we have some lean times ahead in the 2020s. A tight budget gives us a buffer for the coming years," Orpo said..

Aamulehti reports that Orpo is optimistic that the government will achieve its aim of reversing the debt trajectory in 2021.

Brexit talks

Meanwhile, liberal conservatist former MP and MEP Risto E. J. Penttilä argues in business paper Talouselämä that the European Union has been too uncompromising in Brexit negotiations.

According to Penttilä, who currently heads the think tank Nordic West Office, a chaotic Brexit will not benefit anyone.

Penttilä argues that negotiators on the EU side have crushed UK hopes that post-Brexit trade between the two players could continue as before. This is because the EU fears that an easy exit from the bloc will invite countries in Eastern Europe to try the same, he says.

"This analysis is completely wrong. The Eastern European countries need the EU for their security policy," Penttilä argues.

Penttilä says it would be smart for the EU to maintain a good relationship with Great Britain to maintain not only free trade but also the valuable transatlantic connection.

As regards the global economy, Penttilä says a huge storm is brewing.

"We are facing a threat of a trade war, a chaotic Brexit and a banking crisis in Italy."

Boozing habits

Despite recent changes to Finland’s alcohol laws that were intended in part to increase alcohol consumption in restaurants and bars, Finns still prefer to drink at home or in parks, writes daily Helsingin Sanomat.

Last year, about 11 percent of alcohol consumption in Finland took place in restaurants and bars, down from 20 percent in 1997.

HS quotes a European-wide study from 2016 that shows imbibing at home is most common in Lithuania, Denmark and Finland, while the Greeks, Portuguese and Croatians prefer to drink in bars.

Liberalising the alcohol laws was driven by Parliament’s desire to make the Finns’ drinking habits more "European", according to HS. This shift seems not to have happened.

In contrast, the assortment of alcoholic beverages in supermarkets has grown, which may further encourage people to drink at home.

According to Kaarlo Simojoki, director of the non-profit substance abuse clinic organisation A-Clinic Foundation, shifting the use of alcohol to restaurants and bars would inevitably reduce consumption as a whole.

"The social control is completely different. At home, it doesn’t matter if you throw up on the table. In a bar, it does," Simojoki says.

He challenges bars to think up ways to attract more customers.

"It has to be about something else besides drinking. In England, people go to pubs to throw darts and they don’t get totally wasted at the same time."

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