Annika Saarikko: Increases in benefits next year, two conditions for income tax

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Finance Minister Annika Saarikko said she is cautious about large tax cuts. Saarikko brought up two points related to the price increase: families with children and electricity. Iltalehti's politics and economy reporter Mika Koskinen reports on the situation on the spot. Antti [email protected] at 13:39 (edited at 16:04)

The preparation of next year's state budget continued on Wednesday with the internal budget negotiations of the Ministry of Finance. The Ministry of Finance's budget proposal is the basis for the government's budget rush between August and September.

Finance Minister Annika Saarikko (centre) pointed out at her press conference in Moisniemi, Espoo, that the economic situation has become weaker direction in Finland and elsewhere in the world.

– The risk that we will end up in an economic recession cannot be ruled out, Saarikko said.

The minister reminded that employment and the number of employed people are nevertheless historically high in Finland.

Saarikko has previously raised the income tax reduction as one possible way to improve citizens' purchasing power. He stated that the issue is still on the government's table. Saarikko set two conditions for its implementation.

– The action is important to commit to implementation if the risk of a recession seems greater, or if we can be sure that employers and employees will agree on a reasonable wage settlement in Finland.

Saarikko pointed out that wage settlements should not deepen inflation .

> Its fate will be decided in the budget tussle.

– The equation of growing expenditures and hopes for large tax cuts are difficult to reconcile, the minister stated.

Saarikko estimates that inflation will stabilize next year.

Annika Saarikko: Increases to benefits next year, two to the income-tax area condition

Annika Saarikko emphasized on Wednesday that we cannot afford big tax cuts. Antti Nikkanen

Index increases continue

Saarikko emphasized that the government will continue to want the welfare society and its social security to take care of the weakest.

He reminded that the government has already decided to propose early index increases for subsidies tied to the national pension index due to sharply increased prices. Among other things, the national pension, the labor market support, the basic part of the income support and the study allowance increased at the beginning of August.

The level increases will continue next year.

– When prices are rising, it means that benefits will also increase at the beginning of next year.

Saarikko said that he considers the increase in the commuting expense deduction to be a viable solution. He made it clear that he supports its continuation.

The Minister of Finance also raised his concerns about the situation of families with children and the low birth rate, as well as the rise in the price of electricity.

In Saariko's opinion, lowering early childhood education fees should still be considered. The issue has been proposed by the prime minister's party SDP. Saarikko reminded that early childhood education fees have already been significantly reduced in the last election periods.

Saarikko is suspicious of the Bensavero reduction, because it is an expensive operation in terms of state finances, and according to him, one could not be sure that it would show up in the driver's wallet .

Lowering the fuel distribution obligation made sense for Saariko, because it was a cost-effective measure that was visible at the gas pump.

Saarikko considers the reduction in food value added tax proposed by the Left Alliance to be justified, but in relation to that too, according to Saariko, it should be ensured that the reduction would be visible to consumers in the purse.

– I am very cautious about big tax cuts, because there is a lot of uncertainty ahead, the minister stated.

Saarikko said he would ask for VM and work – and the Ministry of Economy's staff to continue looking for ways to deal with the risks associated with the rise in electricity prices.

The Ministry of Economy's internal budget negotiations will continue on Thursday. The budget proposal is supposed to be presented on Thursday at 2 p.m.

Editorial: The government should not accelerate inflation with budget decisions 28.7. 21:28 Comment: Inflation is galloping wildly and the people are biting, but the state treasury is thanking 3.8. 10:43 A drastic cut to Kela compensations, reliefs to price restrictions – these are on the table in the budget amendment on 3.8. 11:27

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