Finnish Elections Test Public Support for Welfare Reform after Center-Right Government Resigns

By Katya Pollock (PO ’21)

On March 8th, Finland’s center-right coalition government, led by Prime Minister Juha Sipilä, resigned after failing to pass a promised reform of healthcare programs. A dramatic rise in the population’s old-age dependency ratio and recession-level labor force participation rates have tightened financial pressure on the country’s healthcare, pension, child-care, and unemployment services. Welfare reform, climate change, and immigration tensions are set to be deciding issues in parliamentary elections scheduled for April 14, 2019, in which Sipilä’s Center party is polling in fourth place.  

Sipilä, a millionaire telecoms and bioenergy entrepreneur, entered politics in 2011 as a Parliamentary candidate for the Finnish Center Party. Founded to represent small farmers in eastern and northern Finland, the Center Party advocates social liberalism and economic decentralization. The party’s more conservative faction voted against the legalization of same-sex marriage in 2014 and opposes Finland’s membership in the European Union. Sipilä was elected chairman of the Center Party in 2012, promising to lead the party in a mission to create new jobs in Finland’s green economy.

In the 2015 Finnish parliamentary election, Sipilä built his party’s campaign for national leadership on the promise of technocratic solutions to Finland’s economic recession and high public spending. His policy proposals included implementing universal basic income to cut welfare costs and freezing wages to improve Finland’s export competitiveness. The Center Party won the election and formed a relatively small governing coalition of 123 seats out of 200 in Parliament together with the populist Finns Party and National Coalition. The government succeeded in cutting education and social security budgets while increasing working time for most employees, although not without facing some of the largest strikes in modern Finnish history organized by dissatisfied unions.

After years of intra-coalition negotiations, the Center Party proposed a healthcare reform package in 2016 which would amalgamate over 200 local health and welfare authorities into 18 regional offices and allow private companies greater freedom of operation within the public healthcare system. The party estimated the reforms would reduce health care costs by €3 billion between 2019 and 2029. The progress of reform efforts was hampered, however, by Health Minister Hanna Mantyla’s resignation in 2016 and the plan’s rejection by the parliamentary constitutional committee in 2017. The committee concluded that the government’s plan to increase private participation in healthcare would violate Finland’s constitution and that implementing the planned changes by 2019 was unrealistic. Sipalä responded by delaying the implementation of reforms by a year, to January 2020, before choosing to resign last month, telling news reporters at a press conference, “There is no way ahead. I am hugely disappointed. We need reforms, there is no other way for Finland to succeed”.

Over the past twelve years, successive Finnish governments have tried and failed to pass healthcare reform. A number of recent scandals have highlighted neglect in elder care homes, prompting politicians to discuss tightening regulations in facilities for the elderly. Finland’s Social Democratic Party, currently leading in polls, is promising tighter restrictions for staff in elder care homes, greater investment in child-care and pensions, and the strengthening of primary health care with the addition of at least 1,000 new doctors or nurses. Finland’s Green League party is campaigning on policies to address climate change, including net carbon neutrality by 2030, a restructuring of the tax system to focus on environmental taxation, and improvements to public transportation. The Finns Party, part of the current governing coalition, is advocating for tighter immigration restrictions following a series of sexual abuse cases in the Northern province of Oulu in which the suspects were immigrants or asylum seekers.

If the Social Democratic Party wins the upcoming election, they are likely to partner with the Green Party and the Left Alliance to form a governing coalition. All three parties have been outspoken critics of the Center coalition’s welfare cuts and labor market reforms. A coalition of the SDP, Green and Left Alliance would reject the healthcare budget cuts proposed by the Center coalition; instead, the SDP has said it will address high unemployment and welfare spending with an increase in corporate taxes, which the Center Party counters will reverse hard-won increases in job-creation. After four years of austerity measures causing public frustration, however, it may be too late for the Center Party to stop Finland’s national politics from taking a turn to the left.  

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