Finland to give basic monthly income to all its citizens

Finland to give basic monthly income to all its citizens

Finland to give basic monthly income to all its citizens

Written by Lahiru Fernando

08 Dec, 2015 | 5:39 pm

Finland, considered as one of the happiest countries in the world, will be a much happier place for its citizens as the Finnish government is currently in the process of coming up with plans to introduce a new national basic income. The country’s government is to make a final decision on the plan in November 2016.

If the process goes in schedule, the country will scrap all existing benefits and grant €800 ($870) per-month to every Finnish citizen. Calculations have revealed that the proposed National Basic Income would cost the government 52.2 billion euros annually. Though the idea sounds far-fetched, it looks like the Finnish Government is pushing through with the plan which has a strong political and public backing in the country.

Several Dutch cities will introduce basic income in 2016 and Switzerland is currently holding a referendum on the subject.

A poll commissioned by the Finnish Social Insurance Institution, the Government agency which is planning the proposal, showed that 69% support a basic income plan. Furthermore, Finland’s Prime minister Juha Sipilä is in favor of the idea and he’s backed by most of the major political parties. PM Sipilä has commented on the basic income saying that to him, it means “simplifying the social security system”.

However, to the people who live outside the Scandinavian country, the plan raises two obvious questions: Why is this a good idea and how will it work?
The idea may sound counter-intuitive, but the proposal is meant to tackle unemployment. Finland’s unemployment rate is currently at 9.53% and a basic income would allow people to take on low-paying jobs without personal cost. At the moment, a temporary job results in lower welfare benefits, which can lead to an overall drop in income.

If the Finnish Government hands over €800 to all 5.4 million citizens on each month, it would cost the Government €52.2 billion a year. However, Finland is not planning on giving the basic income to every citizen. Only adults will receive the basic income. With around 4.9 million adults in Finland, this would still cost €46.7 billion annually.

All this sounds wonderful, but it also has a downside as some people may be worse off under the plan. As the proposal hasn’t been published yet, it’s not yet known exactly who will lose out. But those who currently receive housing support or disability benefits could conceivably end up with less under national basic income, since the plan calls for scrapping existing benefits. And as national basic income would only give a monthly allowance to adults, a single mother of three could struggle to support herself compared to, for example, a neighbor with the same government support but no children and a part-time job.

Finally, the proposal raises the question of whether it’s really fair to give a relatively better off individual the same amount of welfare as someone who’s truly struggling. Finland’s constitution insists that all citizens must be equal, though, of course, equality can be interpreted in many different ways. So far, there’s no definitive answer as to whether national basic income will create a more or less equal society.

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