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Wed, 15 Jun, 2016 12:09:02 AM FTimes – STT Report, Jun 15  From top left Prime Minister Juha Sipilä, Minister of Justice and Employment Jari Lindström, Minister of the Interior Petteri Orpo and the Minister of Economic Affairs, Olli Rehn at the "Competitiveness Pact" signing ceremony in Helsinki on Tuesday. Photo – Lehtikuva. The competitiveness agreement was signed on Tuesday evening at the prime minister’s official residence Kesäranta in Helsinki.
Cabinet ministers and labour market organisation leaders were present during the signing.
The deal has been negotiated for more than a year. The agreement finally clicked in place after the council of Metalworkers’ Union approved it last Friday.
The competitive package, among other things, will extend the working hours by 24. In return, the government has promised tax cuts.
The timeline of the competitive agreement has been expanded by two months, said Prime Minister Juha Sipilä during the signing of the contract. Right now, the contract’s coverage is about 86.5 per cent.
If the coverage exceeds the 90 per cent threshold, the government has promised to lower taxes by 515 million euros next year. Otherwise, tax cuts will remain at 415 million euros.
According to Sipilä, the 90 per cent threshold could be reached if the pharmaceutical and financial sectors agree to the contract.
According to the service sector employees’ association Palta, the obstacle for their 28,000 employees to accept the contract comes from about 2,000 Nordea employees who hope their old extra pension disputes will be settled within the framework of the agreement.
If the Competitiveness Pact achieves sufficient coverage and is put into effect, the government will introduce tax concessions on earned income amounting to EUR 315 million in the 2017 budget.
The finance ministry estimates that this would be sufficient to compensate for the impact on taxpayers of the increase in charges agreed in the Competitiveness Pact in 2017.
If the coverage of the Competitiveness Pact is greater than 85 per cent, the amount of the tax concessions will be increased by EUR 100 million, to a total of EUR 415 million.
“I can confirm that the coverage is greater than 85 per cent. Furthermore, coverage in excess of 90 per cent is still possible, in which case further tax concessions amounting to EUR 100 million will be made, bringing the total to EUR 515 million,” said Sipilä.
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