Budget: Centre and Greens want to raise alcohol tax next year

Pressures for more spending in vocational education and on universities

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The Parliamentary group of the Centre Party wants the government to agree on a “moderate” increase in the tax of alcohol.
      At its summer meeting in Tampere on Wednesday, the Centre Party Parliamentarians agreed with the view expressed by the Greens on the matter. Two other government parties, the National Coalition Party and the Swedish People’s Party, would postpone such a decision until detailed information becomes available concerning alcohol consumption over the whole year.
     Parliamentary group chairman Timo Kalli did not specify the exact meaning of “moderate”. He said that there were calls for regular increases in the alcohol tax in order to avoid sudden changes at any one time.
     In addition to raising taxes on alcohol and tobacco, the government is to decide on cuts in income taxes. Minister of Finance Jyrki Katainen (Nat. Coalition Party) has proposed reductions amounting to EUR 1.3 billion, of which EUR 500 million involves inflation checks, and EUR 800 million are “genuine” tax cuts.
     
There is pressure to increase spending on education, with calls to increase the number of beginners’ spots in vocational education, and to boost university funding.
     Many who completed comprehensive school in the spring were not able to get a place to study in senior high school or vocational school.
     Even after a second round of applications last week, an estimated 2,000 to 3,000 youngsters were not able to secure a spot in further education.
     Both Prime Minister Matti Vanhanen (Centre) and Minister of Education Sarí Sarkomaa(Nat. Coalition Party) have been speaking about the need to prevent social marginalisation of young people under the age of 25, calling for an increase in available vocational education.
     Setting up 1,000 more openings in vocational education would cost EUR four million.
     Universities are also calling for more money. The government programme contains provisions for increases of EUR 80 million in spending on universities during the present Parliamentary term.
     
The Ministry of Finance has proposed that funding should be increased evenly to the tune of EUR 20 million a year. Sarkomaa wants to spend EUR 40 million of the total in next year’s budget.
     A question that is on a much bigger scale is the government’s notion that now would be the right time to significantly increase funding to encourage energy conservation and the use of renewable sources of energy.
     According to preliminary information that has been available, perhaps about EUR 10 million is to be spent on energy supports of both private households and companies.
     
The Ministry for Foreign Affairs is expected to get slightly more funding for crisis management operations.
     Prime Minister Vanhanen does not expect any major disagreements to emerge in the budget talks. The government is to put forward its proposed changes to the Finance Ministry’s budget proposal on Thursday afternoon.


Previously in HS International Edition:
  Rise in alcohol tax leads to surge in personal imports from Estonia (22.8.2008)
  Budget: Finance Minister Katainen proposes EUR 800 million in tax cuts (1.8.2008)
  NEWS ANALYSIS: Stopping growth in tax progression would be something new (22.8.2008)

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