Prime Minister Petteri Orpo at Yle’s Prime Minister’s interview hour at Kesäranta in Helsinki on Sunday, 27 April 2025. Photo: Markku Ulander / Lehtikuva
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Prime Minister Petteri Orpo (NCP) defended his government’s tax cuts and pension fund borrowing during a roundtable interview with reporters on Sunday.
Speaking from his official residence in Helsinki, Orpo acknowledged that cutting taxes carries risk but insisted that inaction would be worse for Finland’s economy. The government’s decision to lower taxes will cost the state around two billion euros in lost revenue, with cuts aimed at businesses and higher-income earners.
Orpo said economic growth will compensate for the revenue shortfall. “The government’s budget decisions create the basis for new growth and more tax income,” he told reporters.
He argued that cutting corporate taxes will lead to new investments and jobs. Former Prime Minister Matti Vanhanen (Centre) criticised the plan on Friday, saying it will mainly boost dividends flowing out of Finland rather than local investments.
Opposition leader Antti Lindtman (SDP) warned that Finland risks falling under the EU’s excessive deficit procedure due to the worsening debt situation.
Orpo also defended the government’s use of state pension funds, describing it as a “responsible move.” He said the money would be used for growth-stimulating measures and not for the planned increase in defence funding.
The government plans to fully compensate municipalities for revenue lost through the corporate tax cut, which will see the rate lowered to 18 percent.
Sunday marked two years since Orpo’s coalition was agreed, though ministers were sworn in later. An Yle analysis published over the weekend showed that the government has so far missed two of its three main goals.
The government pledged to create 100,000 jobs but employment has fallen by almost 50,000 since the coalition took office. Finland now has around 300,000 unemployed people, including more than 115,000 long-term unemployed.
Despite cuts to healthcare, education, culture, and social services, the government has failed to halt the growth of public debt. Many economists argue the situation will worsen due to the latest tax cuts.
Although purchasing power among those still employed has improved slightly since mid-2023, it remains below the peak levels of late 2021. Unemployed people face a tougher situation after the government cut unemployment benefits.
“Purchasing power is literally collapsing for those without jobs,” said Mikael Kirkko-Jaakkola, chief economist at the Taxpayers’ Union.
The Orpo government’s term is scheduled to end in spring 2027.
HT
- Next Article Matias Marttinen to take over as Finland’s new employment minister
Source: www.helsinkitimes.fi
