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On Monday, Finance Minister Magdalena Andersson (S) will present the largest budget the Riksdag has ever seen. In the wake of the crown crisis, the government and cooperation parties C and L will submit new proposals at a cost of more than SEK 100 billion. In a normal year, the incumbent finance minister is usually happy if he can achieve reforms for a fifth of that amount. And forget all the talk about the margin of reform: here the state will borrow the money and let the central government debt grow.
So far, the parties have submitted proposals for roughly SEK 90 billion on a little-seen carousel of games. This means that there are still tens of billions left to distribute when the budget is presented in full on Monday. Based on DN information, an S-branded work package will occupy the last part of the budget space.
But it already says It is clear that companies can expect major tax cuts next year. Individuals will also have more left in their wallets after S was forced to give in to lower income taxes. In total, these are tax cuts for businesses and individuals of approximately SEK 30 billion next year.
At the same time, municipalities and regions will receive substantial contributions. Next year, just over SEK 20 billion will be distributed in general and specific government grants.
Many of the business tax cuts and government subsidies are temporary measures. They are mainly applied during 2021 and sometimes extend even during the following years. These are, therefore, urgent measures to curb the effects of the crisis in the crown and mean that no one can count on more state budgets of this magnitude in the coming years.
– If we want to face a crisis in the future, we must gradually return to order and learn about public finances. However, it shouldn’t go too fast to inhibit recovery, says Jonas Frycklund, deputy chief economist at the Confederation of Swedish Business.
He emphasizes that one A prerequisite for making investments as large as those currently being made is that public finances are in good shape. The Confederation of Swedish Companies believes that a budget of the order of magnitude presented is well balanced in the circumstances. He believes that several points of what has been presented so far are in line with what the Confederation of Swedish Companies has demanded, for example, the reduction of employer contributions for young people and the reduction of corporate taxes.
– In the situation we find ourselves in, it is not possible to implement everything permanently. But for us it is important that certain things extend and become permanent. We believe, for example, that a reduced employer contribution would be needed for young people even after two years, says Jonas Frycklund.
LO chief economist Ola Pettersson believes the January parties have alternately featured wine and water so far. It assumes that there will be more investment in jobs and asks, among other things, for more resources for adult education and polytechnics.
– It is absolutely crucial because we are moving towards a period of higher unemployment and rapid structural change. We have high hopes there, says Ola Pettersson.
He disapproves of that so far He has been so focused on taxes and believes that the proposed tax cuts are “grossly ineffective” and in the long run complicates the possibility of good welfare development.
– What makes some of these tax cuts more bearable is that they are temporary.
He emphasizes that a very aggressive fiscal policy is now needed to support the recovery. So it is no problem that there are a lot of temporary stimuli in the fall budget.
– It is an exceptional situation that requires an exceptional fiscal policy. We are forced and forced to do a lot. So I think the focus on the budget so far does not respond to the real problems of the Swedish economy, such as unemployment, anemic well-being and insecurity that exist in many parts of society, says Ola Pettersson.
Economist Åsa Hansson He is a member of the Fiscal Policy Council, a body of experts whose task is to review the government’s fiscal policy. He warns that urgent efforts overshadow the economy’s deepest structural problems.
– Now there is a lot of fire fighting for natural reasons, says Åsa Hansson.
She calls for more efforts to be devoted to what she sees as the crisis’s greatest danger: that already marginalized groups end up even further away from the job market. Instead of large deductions from employment tax that go to the vast majority of employees, these billions should be directed, for example, to newcomers or the low-skilled.
– What worries me most is that exclusion will increase, says Åsa Hansson.
