The Government Programme’s main policies strengthen economic growth and employment – more ambition is needed in dismantling monopolies 

The Finnish Commerce Federation is satisfied with the main policies of the Government Programme. If realised, they will enable a stable and predictable operating environment for businesses and strengthen economic growth and employment.

“It is very welcome that the Government has committed to the proposals of the Parliamentary Working Group on Research, Development and Innovations’ to increase the funding of Finnish research and development activities to four per cent of GDP by 2030. It is important to accelerate Finland’s transition towards a modern service economy and also to allocate subsidies to the development of consumer services,” says Mari Kiviniemi, Managing Director of the Finnish Commerce Federation.

The commerce sector is a major investor, so the changes to the permit system planned in the Government Programme are necessary.

“It is excellent that permit processes are streamlined, permit and supervision practices are harmonised and that there is a commitment to reducing the administrative burden. National regulation added to EU regulation does need a cleanup. It is also justified to commit to dismantling old regulations when proposing new ones,” Kiviniemi says.

The commerce sector also warmly welcomes the company restraining order included in the Government Programme. The company restraining order strengthens safety in shops and the ability of employers to protect their employees from serious and repeated disruptive behaviour. Corresponding regulations entered into force in Sweden in 2021.

Purchasing power to be taken into account in tax decisions

According to the OECD, Finland’s overall tax rate is the fifth-highest in Europe, so the aim of reducing taxation and especially the taxation of earned income is laudable.

“Decreasing the taxation of labour will improve incentives to work and support purchasing power. However, it is important that the taxation of labour is steadily reduced so that purchasing power improves at all income levels and no new incentive traps are created,” Kiviniemi points out.

The Finnish Commerce Federation is concerned about increases in the lowest VAT rate. Tightening VAT will both reduce the purchasing power of the Finns and affect, for example, bookstores, which are challenged by foreign e-commerce.

“The vitality of domestic bookstores is important for the future of Finnish literature and the range of services offered by the specialty goods trade, also in smaller localities,” Kiviniemi regrets.

The reform of labour legislation and dismantling of incentive traps are moving in the right direction

The Finnish Commerce Federation considers the Government’s aim to reform the housing allowance, social assistance and unemployment security so that the incentive traps that burden commerce can also be dismantled. The aim of creating a model for one general allowance and one application, as outlined in the interim report of the Social Security Committee, is also commendable.

The commerce sector will continue to face the challenge of securing skilled labour, so the effects of tightening the conditions for work-related immigration must be closely monitored.

As the largest employer in the economy, commerce considers it important that the Government embark on the proposed labour market reforms that, if implemented, will support Finland’s competitiveness and increase employment.

“Reforming the industrial peace legislation towards the level of competitor countries – the Nordic countries and Germany – is highly justified and necessary. Similarly, the expansion of local bargaining is a move in the right direction,” says Kiviniemi.

“Workplaces have an increasing need to be able to agree on tailor-made solutions for each company and its personnel, as the situation of companies varies greatly depending on, among other things, economic cycles, customer needs and the competitive situation. Similarly, changes in labour legislation that lower the recruitment threshold encourage employment, especially for smaller companies,” she continues.

Pharmacy reform should be continued towards dismantling the requirement of pharmacist ownership

With regard to the distribution of pharmaceuticals and pharmacy reform, the Government Programme could have been more ambitious and set the objective of genuinely increasing competition and opening up markets by abolishing the old-fashioned ownership of pharmacies by pharmacists.

“Now, the programme policies allow the pharmacy reform to proceed, but the development steps are very small. As a rule, a larger reform would also have enabled multiple savings to the state budget compared with what was agreed in the Government Programme,” says Kiviniemi.

According to the Finnish Commerce Federation, the Government Programme entry on the liberalisation of the sale of over-the-counter medicines is a step in the right direction.

“When the over-the-counter medicines deemed safe by Fimea are released for sale in other outlets and price competition in over-the-counter pharmaceuticals increases, commerce will be able to offer assistance to those in need closer and with more extensive opening hours and lower prices. The day-to-day lives of consumers can be made easier without compromising pharmaceutical safety,” Kiviniemi says.

Instead of protecting the monopoly business of pharmacies, the aim of the pharmacy reform should be pharmaceutical safety and advice, cheaper pharmaceutical costs for society and consumers, and smooth, accessible and available pharmacy services throughout the country – including in sparsely populated areas. According to the Finnish Commerce Federation, this goal would also be strongly supported by the dissolution of pharmacy ownership by pharmacists.

The step towards deregulating the sale of wine must be taken by the mid-term review

As regards the sale of alcohol, the commerce sector hoped for extensive structural reforms towards more European practices.

“However, the reforms have been disappointingly limited. There is strong public and parliamentary support for the sale of wine in grocery stores, which was not sufficiently taken into account at this time. It is, however, a positive thing that a report on the deregulation of wine sales will be carried out jointly by two ministries by the mid-term review. This will make it possible to take the next step in the reform,” Kiviniemi believes.

The commerce sector considers the reform of alcohol legislation so that alcohol retailers will have the right to deliver alcoholic beverages through remote sales in a responsible manner and taking care of age limit control to be positive.

“This is a clear improvement from the consumer’s point of view and increases the equality of retail companies operating in Finland with foreign companies,” Kiviniemi explains.

For further information, please contact:

Mari Kiviniemi, Managing Director, the Finnish Commerce Federation, tel. +358 50 511 3189, mari.kiviniemi (at)kauppa.fi