Roundup: Finland's basic income scheme sparks debate

A basic income scheme in Finland, which was designed to increase employment and simplify the welfare benefits system, has sparked heated discussion in the country.

The Finnish government announced on Thursday that 2,000 jobless people in the country would receive a tax-free monthly basic income of 560 euros(626.84 U.S. dollars), instead of other unemployment compensation, in a two-year trial program that starts early next year.

Recipients of the basic income are also entitled to other work-related benefits if they find new jobs. Previously, unemployment welfare benefits are suspended once a jobless person is hired.

Markus Kanerva, CEO of Tank, a think tank that has studied basic income-related issues, told newspaper Helsingin Sanomat the scheme is a good start despite it may yet to be the best possible solution. According to him, similar tests have yet to be launched elsewhere in the world.

"Whatever happens to the plan, it may open the way to test economic policies in advance - in a scientific way," researcher Olli Karkkainen of Nordea Bank told Helsingin Sanomat.

"If this system would be applied to the whole nation, it would result in a 10-billion-euros public deficit," he added.

However, critics believe the program, which focuses only on jobless people, would offer limited understanding on the overall situation as workers, young people and students were excluded from the test.

The launch of the scheme needs to be approved by Finland's parliament. There is still controversy regarding the scheme so far. Some question whether it is constitutionally acceptable as those who were selected as participants of the plan will be getting social security that is different from the rest of their peers. Endit