The trade unions, along with the employers and the Government, all wish to return to the centralised incomes policy system. This is believed to provide the best means for securing a balanced distribution of income, maintaining consumer purchasing power and preventing rampant inflation, now that Finland has joined the EMU. The current rate of inflation is about to become a problem for Finland: by the end of July consumer prices had risen by as much as 3.7 per cent, whilst an inflation rate of below two per cent has been set as being the goal for all EMU countries.

Lauri Ihalainen, the President of SAK, is of the opinion that internally, SAK is at present in a better position to accept an incomes policy than was the case during the previous bargaining round of a year ago. However, some obstacles to a centralised incomes policy remain, and these must first be removed, the Government having a key role to play in this. The current Minister of Finance, who is a member of the right-wing National Coalition Party, has proposed a reduction to the present unemployment benefit, a suggestion that SAK will not accept under any circumstances. In addition to this, the Minister would like to curb the right to take part-time retirement, which has recently gained in popularity.

The biggest obstacle to reaching a centralised incomes policy is the slow pace at which the Government is processing the proposed new legislation on employment contracts. SAK is demanding, jointly with the other employee organisations, that the Government and Parliament press ahead with the Employment Contracts Act which will regulate the fundamental issues of employment, in the form in which it was proposed by the Legislative Committee after it had completed the essential preparatory work.

More purchasing power by means of lower taxes and higher pays

Lauri Ihalainen of SAK has proposed that a wide-ranging incomes policy agreement, which would run until the autumn of 2003, should be adopted on a national basis. Such an agreement could come into force next January at a time when the majority of the currently valid collective agreements are due to expire. The purchasing power of the employees would be secured by means both of a reduced rate of taxation, which has already been ruled in by the Government, and by pay rises. According to Mr Ihalainen, the rises in wages and salaries should be measured in such a way that they would not accelerate the rate of inflation.

SAK has also stated that an index clause should be included in any agreement of several years’ duration, to allow for the possibility of external forces causing a rapid increase in inflation. For example, the increase in the current rate of inflation has, in the main, been caused by the steep rise in the price of oil. In order to maintain equal income progression in both the private and the public sector, it would be necessary to include an income progression guarantee in the incomes policy. Pay rises will certainly become a subject for hard bargaining during the coming autumn. There are various internal pressures amongst the SAK affiliates on the question of pay. The majority of the SAK affiliated unions accepted pay rises of 3.1 per cent last winter, but some unions have negotiated considerably higher increases. The employers have already started making noises about the importance of Finland being competitive and are demanding moderation in pay rises. It has been calculated, at the Ministry of Finance, that all rises in wages and salaries should remain around the two per cent mark next year, in order for Finland to maintain the same rate of inflation as that of the other EMU countries.

Top priority for adult education

A package of rights and benefits has already been drafted by SAK for inclusion in the potential incomes policy agreement. One of the most important elements in this package is the provision for life-long learning. SAK is demanding the implementation of planned provision for education and training. This would enable people to temporarily leave their work in order to participate in further training or education without losing their job. They would also be paid during this period. With this, SAK emphasises once again the importance of continued learning and the necessity to further develop the vocational training system.

Improvements to the position of the workforce would form another important element in the centralised incomes policy agreement. It is the aim of SAK to gain better opportunities for the employees to exert their influence on changes which take place at the workplace. SAK is demanding, in addition, that the position of shop stewards be strengthened. A small, but specific decrease in the number of annual working days is also on the SAK 'wish list'. Ascension Day, which invariably falls on a Thursday, is a public holiday in Finland, but this is cancelled out by the following Saturday, which is treated as a full working day. SAK is currently requesting that the Saturday which follows Ascension Day be treated as a non-working day, but with no effect on pay. This particular reduction in working time has already been implemented in some sectors of industry.

Wide-ranging final agreement before Christmas

October is the earliest that any negotiations on a centralised incomes policy can be commenced. By that time it should be possible to have had all the obstacles and the various hurdles, which lie in the way of an incomes policy, cleared away and for the employers' and the employees' respective organisations to present their respective aims. Should the negotiations produce a consensus, then the trade unions and the employers' federations should be able to apply the centralised agreement to the various sectors of industry in November, and to draw up new collective agreements.

If the current schedule can be maintained, a new centralised incomes policy agreement could be signed in early December and this would come into force in January.

Should the scheme outlined by Mr Ihalainen be successful, industrial peace should prevail in Finland for the next three years. During this period, in early 2002, the Finnish mark will become redundant as a currency and the Euro will take its place. Towards the end of the proposed incomes policy period, in the spring of the year 2003, general elections will be held in Finland, and the current coalition Government, which consists of all the colours of the rainbow, will have to face the test of its popularity amongst the electorate.