Skip to content
Home » Government’s budget decisions don’t help low-paid workers – purchasing power still not improving
Press releases

03.09.2025 14:02

Government’s budget decisions don’t help low-paid workers – purchasing power still not improving

The decisions made in the government’s budget session do not improve low-income earners’ confidence in their personal finances. PAM is disappointed that the government continues its policy of tax cuts favouring high earners.

Annika Rönni-Sällinen seisoo ulkona takki päällä kädet puuskassa.

Instead of taking measures to strengthen the purchasing power of low-paid workers, the government decided to stick with the tax cuts for high earners that they agreed upon in the spring. These billion-euro tax cuts increase the pressure for additional budget cuts, which the government now decided.

— By carrying out the tax cuts agreed in the spring, the government is punishing ordinary Finnish workers while further increasing the purchasing power of those who are already well-off, says PAM president Annika Rönni-Sällinen.

According to her, the government’s decisions reflect its values. PAM believes the government should have taken steps in this budget session to improve the purchasing power of low-paid workers, and thereby also strengthen domestic demand and consumption. Instead, the government has chosen to stubbornly hold on to decisions like removing the tax deductibility of trade union membership fees.

— The government is acting in line with its earlier promises. It is truly shameless that they continue to worsen the situation of the most vulnerable in working life and stick to previous decisions, even though it has become clear they don’t work. The government had all the keys in its hands but chose not to turn them, Rönni-Sällinen says with frustration.

The earlier cuts made by the government have already increased the need for government social assistance among workers in the sectors represented by PAM. Preliminary findings from a report by the Labour Institute for Economic Research (Labore), to be published in September, show how the government’s tax changes combined with the cuts act as a “transfer of income from the poor to the rich”.

For example, the removal of the exempt amount in unemployment benefits, previously decided by the government, seems to have increased the share of people who are entirely unemployed and driven more wage earners into financial distress. Reintroducing the exempt amount would therefore, in PAM’s view, have been a correct and effective measure to improve the purchasing power of low-income earners. It would also have boosted employment, as extra income for low-paid workers is quickly spent and goes directly into domestic demand.

Keywords:

income politics taxation

What did you think of this content?

Read next

Search