Jorma Ollila calls for stronger stimulus measures
Nokia chairman speaks at 90th anniversary of Chamber of Commerce
Jorma Ollila
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Jorma Ollila, Chairman of the Board of Nokia, says that the stimulus measures planned by the Finnish government are insufficient. In his view, expected economic developments are so worrying that stimulus measures are needed that go beyond the tax cuts and public investments announced so far.
“The entire world economy is in trouble. The Finnish government cannot fight problems of the global economy: we will not have a lucky escape this time either.”
“We can nevertheless adapt to the difficulties with less damage and expedite the return of the economy onto a track of employment-promoting growth”, Ollila said on Wednesday at an event marking the 90th anniversary of the Central Chamber of Commerce in Helsinki.
Ollila praised the government’s decisions on supplementary budgets. In his view, stimulus is needed now even if it means increased borrowing.
“The financing of Finland’s public sector, when pension funds are taken into consideration, has a strong surplus. That gives room to manoeuvre, and time to adapt when difficulties arise. When is that room to be used, if not now?” Ollila asked.
Ollila urged local authorities and citizens to invest in repair work.
“The cost level is becoming more reasonable. Now it is sensible to implement plumbing repairs and to renovate schools and homes for the elderly.”
Ollila feels that the government’s tax cuts set for next year are spurring buying power at the right moment, and are creating preconditions for longer term economic growth. They are also the best way to level out the discrepancies in capital gains and earned income taxation.
In Ollila’s view, the taxation of dividend income cannot be seen as very light in Finland, considering the combined effect of taxation on a company’s result, and dividend income.
For that reason, he does not feel that the taxation of dividends should be increased.
“In saying this I am not denying that the differences of tax levels in certain cases (unlisted companies) cause problems that nibble away at the legitimacy of taxation”, he said.
Ollila also needled opponents of cutting taxation.
So that the reduction in VAT on food might also encourage consumer demand, Ollila called on the retail sector to make sure that the tax cut leads to lower consumer prices. “Otherwise it is apparent that competition in the retail trade does not work in an acceptable way.”
Ollila also predicted that there will be pressures to lower the corporate tax level of 26 per cent in coming years.
Helsingin Sanomat
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| 20.11.2008 - TODAY |
 Jorma Ollila calls for stronger stimulus measures |
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