SY submits agenda for Government spending talks

Suomen Yrittäjät, the Finnish SME association, has published its concrete policy proposals for the Government’s upcoming spending talks. The proposals focus on fixing problems in the YEL system, enforcing the Act on Payment Terms, reforming the Public Procurement Act, shortening the waiting period for sickness allowance and extending working hours.

“The economy and employment require decisions that strengthen the conditions for growth and job creation,” says Mikael Pentikäinen, CEO of Suomen Yrittäjät.

The Government of Prime Minister Petteri Orpo (NCP) has called the spending talks “a ‘growth and employment’ round of talks”. Suomen Yrittäjät is proposing ten measures aimed at strengthening growth and employment. A key principle is that taxation should not be raised and that companies’ access to finance should be improved.

“It’s extremely important that payment terms legislation is finally enforced. A regrettable practice in Finland is that small companies are effectively forced to act as banks for large companies. Reform of the Entrepreneur’s Pension Act is also important. Many business owners are struggling to cope with their current pension contributions,” Pentikäinen says.

A competitive Finland needs more work, not less. Public holidays and long annual leaves in the public sector must therefore be openly reviewed.

Päivi Puonti, Chief Economist, Suomen Yrittäjät

“Finland cannot succeed if labour input declines”

Suomen Yrittäjät is also offering policymakers its own model for compensating employers for the costs of employee sick leave. The qualifying period for sickness allowance should be shortened to three days from the current ten.

“At present, the employer pays at least ten days’ salary for an employee who is off sick and receives no compensation. Even small costs and risks can become a barrier to hiring for SMEs,” says Päivi Puonti, Chief Economist at Suomen Yrittäjät.

Suomen Yrittäjät proposes that the Government launch studies on extending working hours and shortening the waiting period for sickness allowance during the current parliamentary term. This would ensure that policy options are ready for the next round of Government negotiations and could be implemented quickly after the elections. 

“A competitive Finland needs more work, not less. Public holidays and long annual leaves in the public sector must therefore be openly reviewed. Finland cannot succeed if labour input declines at the same time as expenditure increases,” Puonti says.

Suomen Yrittäjät’s proposals for the spending talks

1. Launch a study on extending working hours

The Government should launch a study on measures to increase annual working hours in both the private and public sectors without increasing employer costs.

2. Shorten the sickness allowance waiting period to lower the threshold for hiring

The current obligation to pay sick pay is particularly burdensome for small employers. Suomen Yrittäjät proposes shortening the qualifying period for sickness allowance from ten days to three. This would not increase public expenditure, as sickness allowance is funded by employers, business owners and employees. Suomen Yrittäjät believes a study should be launched.

3. YEL reform to strengthen trust

Reform of the Entrepreneur’s Pension Act must strengthen trust in the system and encourage entrepreneurship. The pension system must also be made more efficient and more flexible.

4. Public Procurement Act reform to open up markets

The Government has placed a Bill before Parliament to reform the Public Procurement Act. The aim is to increase competition and reduce non-competitive procurement. The reform must be carried through decisively. 

5. Late payments are driving companies into bankruptcy – enforcement of payment terms legislation now

The number of bankruptcies has increased. Many companies fail because they do not receive payments on time. Payment terms legislation is widely breached, including by state-owned companies. Suomen Yrittäjät calls for a supervisory authority to enforce compliance.

6. Maintaining tax policy decisions to strengthen predictability

The Government has reduced the highest marginal income tax rates. It will lower corporate tax from the beginning of 2027 and has committed not to tighten dividend taxation for unlisted companies. Predictability in tax policy is crucial for investment and growth. These decisions must be upheld.

7. A rapid support package for construction is needed

Suomen Yrittäjät proposes that the Government introduce a package to boost construction. Permit processes must be streamlined. State guarantees are needed to get construction projects moving. The household tax credit should be improved to stimulate renovation activity.

8. Fix SME financing, give small businesses the right to a basic bank account

Financial market regulation needs a comprehensive review and national overregulation must be dismantled. The proposal to grant micro and small businesses the right to a basic bank account must be implemented without delay to ensure access to basic banking services. State innovation funding should be increased significantly.

9. Transparency in social and health care costs must be increased

Comparable calculation of unit costs is essential for building a cost-efficient service system. Costs must be broken down and published at unit level to enable comparison between public and private provision.

10. Continue deregulation and streamline regulation

The Government has committed to removing at least 300 regulations that hinder businesses during the current term, just over half of which have been implemented. Suomen Yrittäjät calls for this work to continue and for the regulatory burden on businesses to be reduced further.

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