The competitive strength of services is also crucial to the strengthening of employment
The decisions of the government’s budget session are not sufficient for resolving employment problems, and the tax decisions are also still inadequate. The Finnish Commerce Federation calls for the government to take the service sector and competitive strength of commerce into consideration alongside other sectors so that the wheels of the economy can be set in motion.
The commerce sector supports the government’s efforts in mitigating the consequences of COVID-19. It is important to cover all of the costs of testing and thereby allow safe and smooth work, business and use of services. The best growth and employment policy is for the economy to work as normal as possible.
However, the government’s tax decisions remain inadequate on the whole. This applies to both electricity tax and incentive traps.
The global nature of e-commerce and distance selling has significantly changed the operating environment in the commerce sector. The government reduced the electricity tax rate applied to the manufacturing industry, but the entire service sector and commerce as its biggest industry were excluded from the decision.
“In international comparison, the unfair competitive position of the domestic commerce sector is now further highlighted. Gradually reducing the electricity tax rate applied to commerce to the same level applied to industry would significantly improve the international cost-competitiveness of the commerce sector and its possibilities of compete with Amazon, which is about to storm the Nordic countries, or Chinese low-price commerce giants,” says Mari Kiviniemi, Managing Director of the Finnish Commerce Federation.
“Lowering day care fees does not resolve the incentive trap issue that is tormenting the commerce sector. As income taxation is not actually lowered, either, the incentives for work are not improved. The tax decisions of the budget also do not adequately support the purchasing power of consumers, and thereby private consumer services,” Kiviniemi emphasises.
Furthermore, the decisions made to improve employment leave room for hope. The government is aiming for 31,000–36,000 additional people employed by 2029. The measures are partly steps in the right direction, but the commerce sector is concerned over the slowness of the employment measures and deems them to be insufficient considering the economic situation on the whole.
“All measures moved to further preparation and legislative projects concerning working life must have a positive impact on employment that can be calculated. Therefore, no labour legislation projects that practically raise the threshold of recruiting or result in additional bureaucracy or costs in business should be realised, as they make it even more difficult to achieve the employment objective,” Kiviniemi says.
The EU recovery package funding must be allocated in a sector-neutral way
The commerce sector provides employment to almost 300,000 Finns, and in recent years, new jobs have been created specifically in service sectors. Therefore, it is important to take the competitive strength of the commerce sector operators into consideration alongside other industries.
“It is absolutely necessary with regard to the EU recovery package that the funding is allocated in a sector-neutral way. There is great potential for reform, electrification and digitisation in commerce and other services as well,” Kiviniemi concludes.
For more details, please contact: Mari Kiviniemi, Managing Director, Finnish Commerce Federation, tel. +358 (0)50 511 3189, email@example.com
The Finnish Commerce Federation represents commerce – the largest sector of economic life. Commerce employs around 300,000 people in Finland. The Federation has around 7,000 member companies and represents both retail and wholesale commerce in industrial policy and labour market lobbying.