Welfare society and taxation was the theme of the Day of Commerce
KESKO CORPORATION PRESS RELEASE 21.01.2013 AT 15.00 1(2)
The Day of Commerce seminar, organised by Kesko for the 16th time in Helsinki
today, attracted about 600 participants from among trade and industry. The
speakers of the seminar were Henna Virkkunen, Minister of Public Administration
and Local Government; Ilpo Kokkila, Chairman of the Board of the Confederation
of Finnish Industries EK; Pekka Laaksonen, Valio CEO; Juhana Vartiainen,
Director General of Government Institute for Economic Research VATT; Leena
MÃ¶rttinen, Director of EK; and Fatbardhe Hetemaj, Business Manager of VMP. The
theme of the Day of Commerce was the welfare society and taxation. The key issue
of the day was the level of welfare services Finland can afford to provide in
The seminar was opened by Kesko's President and CEO Matti HalmesmÃ¤ki, who said
that the welfare services preserved by public funds are in danger. In Finland,
direct and indirect taxation is already extremely high and the growing welfare
services are financed to a great extent by borrowing.
Minister of Public Administration and Local Government Henna Virkkunen assessed
the impact of the reform in local government structures on the economies of
municipalities. According to Virkkunen, there are in the core of the reform
three major issues that all Finns should discuss seriously: 1. How will the
Finnish welfare society manage in the 2020s and 2030s?, 2. How will the
municipality-based system stand in the 2020s and 2030s?, 3. How much extra
financial burden we will have to put on the shoulders of small age groups in the
2020s and 2030s?
"According to the report by the Ministry of Finance estimating the
sustainability gap of public economy, the change in the age structure of
population alone involves a pressure for additional five billion euros to the
welfare services offered by municipalities by the beginning of the 2020s. If
municipalities are expected to finance this by their tax revenue alone, it would
mean an increase of seven percentage points to the municipal tax rate. Tax rate
differences between municipalities are already significant, up to five
percentage points. If we continued with the current local government structure
and financing model, the difference in tax rates might grow to even 15
percentage points during the next three terms of municipal councils. It is
evident that major reforms are now needed both in structures and operating
systems," said Minister Virkkunen.
Ilpo Kokkila pointed out that without successful companies which provide
employment and make investments we will not be able to finance welfare services.
"Finland is losing competition both on the export market and in terms of the
amount of investments directed here. In order to finance our welfare services in
the years to come, it is time to change the operating environment of companies
attractive to investments and make exports competitive again. It takes a lot of
work- from all of Finns," said Kokkila.
Pekka Laaksonen said that only work creates genuine value and only brainwork
creates wealth. Laaksonen would rather tax genuine values and cash flows, not
market prices and yield expectations. According to him, incurring debt is
something not to be encouraged.
Leena MÃ¶rttinen said that welfare and growth of Finland will continue to be
based on the high level of competence both in exports and on home market.
"Domestic demand has been provided a strong foothold for total demand when the
world market has been floundering. Growth is also a structural issue in Finland.
Incentives for entrepreneurship, ownership and healthy risk taking should be put
in order. A new Finnish success story is not created by choosing winners but
believing in enterprise. This should also be reflected in decisions on
Juhana Vartiainen presented the Swedish labour definition which allows a margin
to the economy in order to preserve the welfare society. He also spoke about the
new division of labour between various sectors and industries. According to
VATT's analysis, the trading sector will probably be one of the winners of the
structural change. Its importance as a labour intensive sector will be
highlighted in Finland in the future.
The closing speech of the seminar was given by Fatbardhe Hetemaj, who was named
as Refugee Woman of the Year in 2009. She pointed out that new taxpayers are
needed to Finland. According to Hetemaj, it would benefit all, both from the
viewpoint of competitiveness and social wellbeing, if immigrants had more
opportunities to integrate into the Finnish working life. "Everyone who is ready
to work for their own and the country's wellbeing is welcome to Finland," said
Photos of the speakers at the Day of Commerce seminar can be downloaded from
http://aineistopankki.kesko.fi/kesko en and their presentations from
Further information: Merja Haverinen, Vice President, Corporate Communications,
Kesko Corporation, tel. +358 10Â 53 22764
Kesko (www.kesko.fi) is one of the Global 100 Most Sustainable Corporations in
the World. We are a retail specialist whose chains have about 2,000 stores in
the Nordic and Baltic countries, Russia, and Belarus. Our stores offer quality
to the daily lives of consumers.
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