The Confederation of Finnish Industries (EK) and the Federation of Finnish Enterprises (Suomen Yrittäjät) said on Wednesday that they were mainly satisfied with the government's budget proposal unveiled the previous evening.
The main business lobby EK commended the government's decision to stick to the growth measures decided in the spring. According to the Confederation, the decisions made by the government were difficult, but essential for economic sustainability.
The entrepreneurs' association meanwhile said that it is good for economic growth that the government is adjusting the economy by cutting spending rather than raising taxation on work and entrepreneurship. However, the organisation criticises cuts in R&D funding.
The Finnish Taxpayers' Association described the tax policies decided on by the government as largely beneficial and expected. It said that the most important change is the general reduction of taxes on earned income, coupled with a clear reduction in the highest marginal taxes. Its CEO, Teemu Lehtinen, argued that changes in taxation of earned income would support the economy's return to growth.
Labour groups: Cuts are unfair
On the other hand, the budget proposal has received a harsh verdict from the biggest labour groups.
The main blue-collar federation, the Central Organisation of Finnish Trade Unions (SAK), criticised many cuts, including those to the ARA subsidised housing loans. The organisation did concede that the budget compromise hammered out by the four governing partners on Tuesday does include some improvements compared to last month's draft proposal by Finance Minister Riikka Purra (Finns). The SAK represents about 800,000 workers.
Meanwhile Patrizio Lainà, Chief Economist at the Finnish Confederation of Professionals (STTK), declared that the government has failed in its economic policy. In an STTK blog post on Wednesday, Lainà said that the planned one-billion-euro adjustment in the state budget is being implemented unfairly.
"The adjustment treats everyone else harshly, but companies and high-income earners are being pampered with tax cuts," he said, adding that government should reverse its decision to cancel tax deductions for union membership fees.
The STTK says it is "very worrying" and "unacceptable" that the government is taking another 100 million euros from the State Pension Fund to supplement state finances.
It also slammed the decision to slash housing construction subsidies.
"The construction industry is doing badly, and subsidised housing construction has kept at least some of the wheels turning. Now the industry's downturn will continue, and the economy will weaken even further," said Lainà.
He said that cutting corporate subsidies by 141 million euros is "a good start" but warned that cutting back on R&D will undermine economic growth. The STTK represents some 400,000 employees.
