Sweden announces major jobs package

The Swedish government announced on Friday it plans to spend 23 billion kronor ($2.8 billion) over the next three years on “employment and retraining” measures in an attempt to minimize the effects of the weak economy.

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The package includes increased support for the unemployed as well as more funding for high school and college-level vocational training.

The government plans to spend 8.3 billion kronor in 2009 and 8.8 billion in 2010, before reducing the size of the support package to 5.8 billion in 2011.

The measures were announced during a joint news conference featuring the heads of the four centre-right governing parties.

Also included in the package is a call for more spending on infrastructure projects and an increase in the tax deduction available for construction services related to home repairs and maintenance (ROT-avdraget).

The deduction will go into effect immediately.

“So you can start ordering your services now,” said Enterprise Minister and Centre Party leader Maud Olofsson, who proposed that home owners could take advantage of the tax break to help make their homes more energy efficient.

“That has an effect on employment which we estimate affects 7,000 people,” she said.

According to the government, the comprehensive jobs package will provide employment or educational assistance to 58,700 people in 2009; 72,000 people in 2010; and 34,200 people in 2011.

“Sweden is clearly feeling the global crisis. Sweden is an export-dependent country and it’s hard to confront [the crisis] when so much depends on our export markets,” said Prime Minister Fredrik Reinfeldt.

The prime minister also stressed the importance of bolstering the financial system while at the same time keeping an eye on government spending.

“Today it’s also important to get a financial package in place that can address the need for better access to credit,” he said.

“It’s important to emphasize the importance of the financial policy framework. We can’t lose our grip on public finances […] the best news we can give the Swedish people is to provide a stimulus which won’t eventually lead to tax increases or a reduction in welfare.”

Nearly 3 billion kronor will be spent to help improve efforts by Sweden’s National Public Employment Agency (Arbetsförmedlingen) to match job seekers with potential employers.

Social Minister Göran Hägglund said the government had taken the opinions of representatives from regional employment offices into account in formulating the measure.

“The point is to help those who are unemployed to get a new job as quickly as possible so that people are on their way toward getting a job when the economy turns around,” he said.

Education Minister Jan Björklund then discussed the high number of places available within Sweden’s education system.

“Right now colleges have between 10,000 and 12,000 spaces available. Thus we conclude today that there is no need for more places. However, when it comes to adult education, we’re proposing an expansion,” he said.

He explained that resources will be devoted toward creating 5,300 new places for adult vocational education during 2009, which Björklund claimed would allow 20,000 to 25,000 people to receive additional training.

“A vocational college with 3,000 spaces will be inaugurated. In reality, maybe around 6,000 people could given spaces there,” he said.

Björklund added that financial aid would be made more generous for students over 25-years-old, allowing them to have up to 80 percent of the costs of their studies covered by grants, up from the average of 30 percent which grants cover today.

The proposed measures would only be in effect from 2009 through 2011, with the exception of the proposed doubling of the reduction in payroll taxes for employers who hire a long-term unemployed worker.

In addition, the increased tax deduction for home renovation and maintenance services will also be made part of the permanent tax code governing household services.

The government plans to present the proposal for a vote in the Riksdag at the end of January.