Government new draft budget offers more money for war veterans

Alcohol tax hike to be considered next year

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The government’s draft budget, which was finalised late on Wednesday, includes an item of EUR 20 million for physical rehabilitation of war veterans. The funding is timed to mark the 60th anniversary of the end of the Continuation War.
      The funding extends veterans’ rehabilitation to new groups, including the victims of attacks by Soviet partisans, and to men who took part in evacuating cattle from approaching fighting.
      Social Services Minister Liisa Hyssälä (Centre) said on Wednesday that war invalids will be given better access to municipal outpatient care and institutional care.
     
The draft budget also calls for a seven euro monthly increase in national pensions already next year, instead of 2006 as had been previously put forward.
      About 4,000 long-term unemployed will be given the right to apply for pensions as of May next year. The benefit is available to those born between 1941 and 1947 who have been out of work for more than ten years.
     
Wednesday’s proposal calls for income tax cuts of just two percent for wage earners as an inflation adjustment. The government still holds out the possibility for more tax cuts if a moderate incomes agreement is reached this autumn.
      Prime Minister Matti Vanhanen (Centre) emphasised that the government would work hard to help achieve a moderate long-term incomes agreement.
     
The government seeks to boost employment through a number of measures, including the expansion of the tax deductibility of hiring domestic help, and by easing VAT on small companies.
      The government has also agreed on a cut in the mandatory employers’ contributions for low-paying professions.
     
The taxation of alcoholic beverages is not to be re-examined until next year, when enough information is available on the impact of the move. Finance Minister Antti Kalliomäki (SDP) says that possible decisions could be made early in the year, and that a tax hike might not be needed.
      The government decided to implement the sickness insurance reform according to plan.
     
The government completed its draft budget in one day. The final sum of the draft is EUR 37.6 billion.
      It was unexpectedly easy for the government to agree on issues such as spending the EUR 45.7 million from sales of state-owned corporate stock for transport projects. The money will be invested in highway and rail infrastructure work and in subsidies for mass transit. Construction of roads to harbours will get EUR 13 million, and the same amount will go to widen roads, build more passing lanes on highways and railings on motorway central reservations, and to implement other measures to improve highway safety.
      The state is also budgeting EUR 2 million for improvements for private unpaved roads in rural areas.
      The negotiators agreed that financing for flights of rejected asylum seekers out of the country would be arranged through the transfer of funds within the Ministry of the Interior.
     
The Ministry of Finance presented its latest growth forecast during the budget talks. According to the revised forecast, growth in the national economy this year will be 2.9%. Previously the ministry had predicted 2.4% growth for this year. The forecast for next year is 2.7%.
      Kalliomäki said that this growth will be sufficient to achieve the goal of creating 100,000 new jobs.


Previously in HS International Edition:
  Surge in crime after alcohol price cut - no plans for tax hike during budget talks (18.8.2004)
  Left Alliance begins work on shadow budget (4.8.2994)

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