During the past year the SYL team has been spending a lot of time thinking about generation policy. Of course, intergenerational equity has always been part of SYL’s advocacy work, but this year we have considered the term as a theme which infiltrates our activities and our policy. But what does it mean that society and the environment should be left for future generations in a better state than we found them in? What will it take for this to happen? How much is too much when it comes to pension contributions? Why the hell are we being told to be patriotic and have more babies?
Clearly, this matter has started to gain the interest of the media. During the previous parliamentary elections, the theme of intergenerationality only seemed to be discussed in relation to the sustainability gap: we cannot leave an untenable burden of debt. Difficult decisions have to be made. Budget cuts hurt us all.
Or do they? A few weeks ago, I attended a seminar on intergenerational equity organised by Tela with the aim to create a “collision” between youth and student organisations and pension organisations. During our group discussions we tried to find issues that the different organisations had in common, and ways for the organisations to dissolve tensions between generations.
I was sitting in the room listening to presentations given by representatives of the pension organisations. Active, recent retirees are the best kind of inhabitants in a municipality, they pay lots of taxes and take part in organisational activities. Pensioners are worth up to 500 million euros to society every year as they help their children and friends with childcare. The majority of pensioners also feel that the sustainability of the pension system is an important issue, and few organisations were willing to support Kimmo Kiljunen’s recent index initiative.
I quickly realised that we had come to the seminar to discuss very different issues. After spending some time in pleasant conversation about common themes, I ventured to ask the question: what about the zero-sum game of the nation’s finances?
The fact of the matter is that no predictions or forecasts are indicating that Finland is on the road to stable, continuous economic growth. It is also the case that pension expenditure is rising at a considerable speed in Finland, and within a few years the social welfare and health care expenditure will also take off.
In the past 10 years, one third of the increase in public spending has been allocated solely to the growing pension expenditure. The spending pressure in pensions, social welfare and health care keeps growing, but the public income does not grow at a similar rate. In the near future, we will have to allocate more and more money to social welfare and health care than we currently are. In practice, this means that the money to cover the growing social welfare and health care spending will have to be found by making cuts to some other areas of public spending. In a situation like that, the Ministry of Education and Culture’s administrative sector, which is the largest category of expenditure within the public economy, is in a very vulnerable position.
The aging population deserves sufficient social welfare and health care of a high quality, as well as their pension. Equally, the younger generations and families with children deserve a high-quality education system, a reasonable taxation and the promise of a pension in their old age. Currently, it looks like the promise of care and living standards that the society has made to the older generations will be kept at the expense of the younger generations. But I might be wrong – I would really like to be.
At the economic seminar Taloudenpuolustuskurssi, organised by Helsingin Sanomat and Aalto EE, Kaius Niemi from HS asked the politicians on the panel an excellent question: what are the political parties going to do about the fact that for many years now, the average income of 30-year-olds has been considerably lower than the average income of pensioners? How will the political parties deal with the challenges of intergenerationality and take action which may not benefit their largest and most active group of voters, the pensioners?
To be honest, the answers given by the panellists were a load of pointless drivel. Everyone did, however, agree that we should be able to discuss intergenerational equity more openly and bravely than we currently do.
I fear that even the brave discussions are too late – at this point we need action.
Silja Silvasti, SYL’s Social Policy Adviser