Incomes policy: government backs “framework deal” with EUR 400 million

Tax breaks for companies and wage earners, agriculture fuel tax break retained

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Rami Huhtala, 29, who works at Helsinki’s Vuosaari Harbour, was pleased on Monday that his union, the Finnish Transport Workers Union (AKT), decided on Monday to join the centralised incomes agreement, also referred to as the “framework”.
      “What is most important is that the agreement was reached. Nobody wants to go on strike now. The increases are not so great for ordinary workers that they would affect life in any way”, Huhtala said.
     
In Tampere   55-year-old teacher Päivi Wheeler was also relieved that agreement was reached without conflicts or strikes.
      “The increase, which is well under 100 euros [a month], is better than nothing. The single payment of EUR 150 is quite nice. But as much as I would want more pay, I would like funding for smaller class sizes.”
     
Also quite pleased are the leaders of Finland’s labour market organisations, who signed the framework agreement on Monday morning.
      “Now we have come to the common conclusion that this has sufficient coverage, and that the framework agreement will be implemented”, said Mikko Pukkinen, managing director of the Confederation of Finnish Industry (EK).
      In his view, a comprehensive and relatively moderate pay agreement prevents wage competition, guarantees corporate competitiveness, and brings predictability to economic policy.
     
After the framework agreement was signed, the government gave its approval to backup measures that it had promised as an incentive for the framework agreement.
      Already on Tuesday, Parliament will start processing the government proposal for measures with a price tag of EUR 401 million. Helsingin Sanomat has learned that the government is also providing incentives for agriculture.
      In its original budget proposal the government agreed that agriculture would no longer get a rebate on the carbon dioxide tax that it pays on light and heavy fuel oil. The cancellation of the rebate would have cost farmers about EUR 18 million a year, but now the changes are being postponed, apparently for the two years that the framework agreement is in force.
     
The signing of the framework agreement came two days behind schedule; the transport sector did not iron out its differences until the early hours of Monday morning.
      Pukkinen notes that this is the first time in the history of modern labour market policy that a solution has been reached that covers industry, services, and the public sector, as well as transport.
     
The agreement was welcomed by Prime Minister Jyrki Katainen (Nat. Coalition Party), who called it a “positive exercise for Finland.
      “There are a limited number of things that Finland can affect on its own. A pay contract supporting industrial peace and competitiveness, buying power and employment is in our hand. Now we have reached the goal. There is reason to be very satisfied”, Katainen said at a press conference on Monday afternoon.
      The Prime Minister gave special thanks to Minister of Labour Lauri Ihalainen (SDP) for his efforts in facilitating the agreement.
     
According to Lauri Lyly, president of the Central Organisation of Finnish Trade Unions (SAK), the framework agreement is a victory for Finnish collective bargaining and the Finnish labour market model.
      “This shows that a small nation can only succeed by making agreements. For wage earners, this kind of a more extensive solution makes it possible to advance matters affecting working life which would not be possible in negotiations with individual unions. In this respect, this is an historic day”, he said.
      Minister of Finance Jutta Urpilainen (SDP) said in Brussels that she cannot put into words the satisfaction that she felt when she received a text message that the agreement had been reached.
     


Previously in HS International Edition:
  Broad-based incomes framework reached - tough negotiations expected at individual union level (14.10.2011)
  Labour market: framework contract to be implemented (28.11.2011)

Helsingin Sanomat