More and more people are proposing to revive the economy with investments in construction. There would be good destinations for the money, starting with boarding schools and ending, for example, with bridges and the public road network, but there are still open questions about the methods of financing investments.
the CEO of INFRA ry Paavo Syrjön according to this, the desire for recovery requires a lively discussion about the means of funding recovery measures. It is bad to revive the penniless, he thinks.
"Debt relief is justified in a bad economic situation, but continuous taking on additional debt cannot be the only solution. Not everything can be left to the investment package planned by the EU. We need new, national ideas that take into account Finland's special features", says Syrjö.
The most painful problem of Finland's waterway network is its poor condition. Remote Finland compared to its competitor countries is already suffering financially from the situation. Logistics costs are clearly higher than competitor countries, on average 14 percent of companies' turnover.
"For example, the targeted revitalization of basic road maintenance is therefore part of a larger solution that has a long-lasting effect on the economy and competitiveness. There is starting to be a consensus on this, but not on the method of financing the repair shop. One way could be temporary additional financing, which would be implemented with a small, earmarked additional fee. The road repair debt would be reduced to a fraction of what it is now by collecting, for example, one cent in the price of a liter of fuel for ten years, an infrastructure fee comparable to a maintenance security fee," Syrjö suggests.
In order for the highways to remain in good condition, the permanent level of highway funding should be capped at 1 percent of GDP. This can only be achieved by looking for new funding sources outside the state budget. As one option, a fund that invests in infrastructure has been used.
"It would open infrastructure investment to private individuals, such as pension companies. Now the bus financing is almost completely dependent on the fluctuating budget framework, which is twisted every four years, even though the impact of the euro extends far beyond the moment of construction. Funding targets should be chosen based on national economic criteria with a 10–20 year horizon. This affects employment, the smoothness of transport, the location and investment decisions of companies and people. Good infrastructure enables unified working areas, lively regional municipalities and a good tax revenue stream."
For more information:
CEO Paavo Syrjö paavo.syrjo(@)infra.fi, tel. 040 560 1803
Director Heikki Jämsä heikki.jamsa(@)infra.fi, tel. 050 587 2911