Finland’s Social Democrats, who may be returned to power for the first time in 20 years on Sunday, plan to raise taxes to fund the country’s generous welfare system as it struggles to cope with a rapidly ageing population.
Antti Rinne’s Social Democrats have led in the polls for almost a year, with many Finns concerned over the future of public services and welfare due partly to the cost of caring for its growing ranks of pensioners.
“We need to strengthen our welfare society – and that needs money,” Rinne, a former union strong man, told Reuters in an interview ahead of parliamentary elections on Sunday.
He said raising taxes would also help combat inequality in Finnish society.
The left-leaning Social Democratic Party (SDP) topped the most recent poll with 19.0 percent support, Finland’s public broadcaster Yle reported on Thursday, although it would need to build a coalition to form a stable government.
“We need to spread our tax base and we need to strengthen it. That’s a big policy change here in Finland if we do that,” Rinne said.
The current centre-right government’s policies have hurt the income of less privileged groups such as pensioners, families with children, students and the unemployed, Rinne said.
Since the last parliamentary elections, in 2015, centrist Prime Minister Juha Sipila has made preventing Finland from taking on more debt one of the government’s main goals together with pulling the country out of the three-year recession that eventually ended in late 2015.
Last year, Sipila’s government managed to cut Finland’s outstanding debt for the first time in a decade.
But the tight finances led to austerity measures and spending cuts such as reductions in unemployment benefits, pension freezes and cuts to public sector holiday pay, which made his government deeply unpopular.
“That’s not a fair way to do it,” Rinne said, adding he would adopt a different strategy to balance the public finances. “We can collect a little bit over 1.5 billion euros more in taxes, but not via income taxes,” he said.
He suggested raising some consumption taxes as well as the capital gains tax, which now stands at 30 percent and at 34 percent for gains above 30,000 euros ($34,000).
Rinne’s talk of raising taxes is unlikely to drive off his supporters, many of whom value highly Finland’s huge welfare state.