Economic policy at the national level means the state’s financial, structural and labour market policy. Suomen Yrittäjät brings the voice of enterprise and small and medium-sized enterprises (SMEs) to the economic policy discussion. Suomen Yrittäjät also follows, analyses and comments on EU economic policy.
Finland’s challenges are the structure and indebtedness of the public finances, a limited labour pool, and relatively weak productivity, particularly in public services. The Finnish economy’s production structure has also changed substantially: the share of large industrial players in production and jobs has shrunk and SMEs are increasingly responsible for providing employment.
Suomen Yrittäjät believes that economic policy should incentivize businesses to invest domestically, thus supporting employment, economic renewal and tax receipts.
For Finland to succeed, there must be incentives to work and do business. Income, corporation and dividend taxes should be reduced and consumption taxes increased. Activities causing negative externalities, in particular, should be taxed more heavily. Thus, there are grounds for reducing direct taxation and increasing indirect taxation, if necessary.
When balancing the public finances, the focus should be on curbing spending rises. The government should review public expenditure and focus on the factors that will boost future economic growth. By all metrics, the Finnish public sector is too large given the country’s economic performance.
In addition to financial policy, the labour market substantially affects economic development. Because the net growth in private sector jobs over the past 20 years has been entirely due to SMEs, these businesses’ position and needs must be considered when the ground rules of the labour market are written. The labour market must be made more flexible by increasing company-specific local bargaining.
The consequences of the ageing population place particular pressure on the labour market. As the working-age population shrinks and even the present human resources are to a certain extent significantly underused, the labour markets must develop to increase the supply of workers. Finland has far too many people of prime working age who are not in employment, and labour immigration must urgently be made easier.