Ministers disagree on funding for employment programme

Labour Minister promises more money

Tarja Filatov

Matti Vanhanen

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Different views have emerged within the government on how to deal with the costs of its employment programme.
      Minister of Labour Tarja Filatov (SDP) said on Wednesday that the planned labour market reforms cannot be implemented without additional funding. She said that extra money - between EUR 30 million and 40 million - is needed if more jobless are to be offered work and training.
      On Tuesday Prime Minister Matti Vanhanen (Centre) and Minister of Finance Antti Kalliomäki (SDP) were unaware of any such need. "These are internal transfers", Vanhanen had said.
      On Wednesday Filatov and Labour Ministry official Harri Skog presented their proposal on reforms in labour market supports and its financing.
     
The main idea of the employment programme is to set conditions for the extension of labour market support benefit enjoyed by the unemployed beyond two years.
      Under the proposal, when a person has been out of work for 500 working days, he or she would be required to work, or to take part in vocational training as a condition for the continuation of the benefit.
      Filatov said that she had the backing of the rest of the government for her calls for additional funding. However, a day earlier Prime Minister Vanhanen and Finance Minister Kalliomäki voiced different views.
     
The proposal of the working group was not unanimous; the Association of Finnish Local and Regional Authorities indicated that it did not trust the calculations according to which the extra costs to municipalities would be compensated.
      The employment programme is seen as possibly the most important single item in the government's goal to increase the employment level, and to secure the finances of the welfare state in the coming decades.
      However, the working group concedes that employers also need to be encouraged to hire more jobless people. The government is expected to decide within a month on tax breaks or fee reductions to promote employment in low-paid fields.
     
One of the aims is to improve the service offered by employment offices, which are to have different options available for the jobless, depending on how long the individual has been out of work.
      The most important aim is to help the approximately 100,000 people of working age whose unemployment threatens to stretch beyond two years.
      "I have had the idea that if it is carried out, this could raise the employment level by at least one percentage point", Skog said on Wednesday.
      "Don't make any promises", Filatov commented.


Previously in HS International Edition:
  Unconditional unemployment benefit to be limited to 500 days from 2006 (27.1.2005)

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