HELSINKI: Experts of the Organization for Economic Cooperation and Development (OECD) have suggested that Finland should give up the plan for a universal basic income, which has caught the eyes of international audience.
The remarks from OECD came just weeks after the current Finnish coalition government gave up a plan to reduce the compensation for taking care of under-three-year-olds at home. The reform was called off due to the opposition from the populists and centrists that have their core support in rural communities. Local commentators said on Wednesday that the ideas of curbing the benefits for working age people would create strong political resistance.
Parliamentary elections will take place in April next year and the current coalition is not likely to introduce any new plans to reduce benefits.Finland has just experienced a wave of labor action in protest against fresh legislation to reduce jobless benefits if the recipients do not look actively for work.
OECD admitted that the financing of a welfare state is increasingly difficult due to international tax competition. At the same time, Finland should decrease the taxation on salaries in order to make employment attractive.To compensate the decline in income tax revenue, the report recommended an increase in real estate taxation. Currently, the Finnish real estate tax levels are below the real value of the properties.