JHL: County tax would solve the funding problems of wellbeing services counties

Trade Union JHL proposes introducing county tax to solve the funding problems of wellbeing services counties. The trade union demands that bringing the public finances into balance must be done in a just way.

The President of the Trade Union for the Public and Welfare Sectors JHL, Håkan Ekström, is genuinely worried about how the Government of Finland will succeed in its spending limits session next week.

– It’s challenging for the Government to stabilise the public finances and at the same time try to mitigate the effects of the low period in the economic cycle on the national economy. One of the reasons why the situation is challenging is that while cuts are made in spending, at the same time taxes are lowered, and this increases budget deficit and forces the central government to borrow more money than before.

Ekström talks about the difficult situation of the wellbeing services counties. The Government’s spending limits session will not bring sustainable solutions to that. He says that it’s regrettable that county tax was ruled out in the Government Programme. It would have offered a solution to the funding of the wellbeing services counties.

– The funding of the wellbeing services counties is structurally at much too low level. The Government tries to get more savings, and at the same time the need for services grows. The social welfare and health care sector already suffers from labour shortage and the need for care will increase rapidly as the population grows older. For example, the number of people over 80 years of age will increase by nearly 100,000 during the budget planning period.

It’s expected that the debt of the wellbeing services counties will more than double during the budget planning period from five billion euros to over 11 billion euros. Cuts in their funding should be withdrawn and counties should be given more time to cover their deficits.

Ekström stresses that public finances need balancing.

– It has to be done in a just way. The burden must be distributed to all parties and most importantly so that more of it goes to those who have more carrying capacity, income and wealth.

JHL proposes tax increases of about 1.7 billion euros, which would make it possible to bring the public economy into better balance in a just way. The proposed measures include cancelling some tax reliefs of autumn 2023, for example returning the old minimum limit for solidarity tax on wealth.

– We need structural reforms in the tax system, such as cutting the dividend tax subsidy of non-listed companies, Ekström points out.

In addition to strengthening government revenue, JHL proposes cutting expenditure by about 930 million euros. Half of that would come from calling a timeout on the West Railway (Länsirata), which is not economically viable. Also, reimbursements from Kela for private medical care should be returned back to 2023 level. With the proposed measures it would be possible to balance the public finances in a just way in a scale of up to 2.6 billion euros.

JHL reminds that the state productivity programme will probably bring significant challenges for the operations and staff in many government agencies.

The trade union hopes that the public economy and public services in Finland are brought to such level where statutory public services can be produced on a sustainable basis and so that the wellbeing of the employees in secured.

More information
JHL President Håkan Ekström, 040 828 2865
Special Advisor Samuli Sinisalo, 040 705 0398