The amount of corporate grants given to companies by the Finnish public sector varies between €4 billion and €9 billion, depending how you calculate the number. It varies because of what is included, but if you take into account direct subsides, cheaper land acquisition, tax benefits and cheap financing you end up nearer the bigger figure.
The act of granting this huge amount of subsidies is actually impossible to understand given the following facts:
- Most of the financial benefits are given to large profitable companies that pay huge dividends.
- Many are big energy users, and are not particularly innovative, while others, like shipping companies, add very little to exports.
- The agricultural and forestry sectors get relative large shares for less value-added products.
- Total corporate taxation revenues are only around €4 billion!
The amount granted is between 10% and 20% of total public tax revenues – not an insignificant amount that could be stopped immediately and passed on to more important and productive parts of the economy.
There is no question that education, preventative healthcare and good infrastructure are more important and more productive investments.
The big lobby groups say that corporate taxation should be stopped if corporate grants are cut, but that is a dumb solution because industry and commerce benefit enormously from our free public education and healthcare systems. There is nothing strange about them paying their fair share into the common pot.
Yes, the main industrial and commercial lobby groups hate any proposals to abolish state subsides. However, it is useful to recall that they are not running our government, nor are or should the political parties be controlled by them.
Companies, large and small, create the jobs and to do that they need to be profitable, and that has to be without public handouts. If they are not profitable then they should not be in business.
The same logic applies to people of working age. We all need education, healthcare and the other basic services for which we pay our taxes. Common goods like education and efficient welfare systems are best managed cost efficiently by the public sector with the purpose of ensuring that the employment rate is as high as possible.
This has not been the case for the last 10 years. We should not be supporting those unemployed people with public handouts if they can work. With a current low 72% employment rate in Finland, there are just too many people not working. Handing out public money without a time-limited obligation to find a job is money down the drain.