The decline in living standards will not make the campaign theme very popular in next spring’s parliamentary elections, which the parties of the current center-left coalition are well aware of.
With prices rising as much as six per cent, wages just a couple of per cent this year and mortgage rates rising, the finance minister Annika Saarikko (Cen) has again suggested a reduction in income tax as one way to facilitate it.
His list of possible measures also includes a reduction in VAT on food and a reduction in the tax on petrol. However, if the government is to take the idea forward, it must be selective.
"I can say directly that there is no possible reality where all this could be done," Saarikko told the news agency STT in an interview.
Saarikko has previously mentioned a reduction in income tax, and now, according to him, there is even more reason to do so. However, he is not ready to promise tax cuts.
"Of course, it is also necessary to consider where the state gets its income if income taxes are reduced," The archipelago says.
He also called on the social partners to act responsibly.
The labor market situation is currently difficult, as wage demands in the care sector have not yet been resolved and negotiations in the private sector will begin in the autumn. Trade unions have increased the demands.
"The Ministry of Finance is, of course, preparing for the autumn and we are following the debate on the forthcoming salary round with concern. I do not think I will be the first finance minister to appeal to moderate wage demands, but now I strongly appeal." Saarikko told STT.
According to Saarikko, history contains bitter lessons about what happens if salary increases are not kept in check.
"With energy prices being the main driver of inflation, it is not good to continue to accelerate inflation with high wage settlements. Inflation is a spiral and should be avoided," The archipelago said.
Source: The Nordic Page