• Sweden edition
 
Sweden budget bill sparks heated debate

Sweden budget bill sparks heated debate

Published: 20 Sep 2012 15:59 GMT+02:00
Updated: 20 Sep 2012 15:59 GMT+02:00

Swedish Finance Minister Anders Borg defended the government's 2013 budget proposition on Thursday, in the face of tough criticism from unions and opposition politicians.

"We're presenting this year's budget proposal in very uncertain times. But with this budget, Sweden will have perhaps the strongest finances in Europe," Borg told reporters during a morning press conference.

"The budget includes long-term, necessary investments. But the starting point is that we're in a tough situation. We have countries like Greece, Spain, and Italy that give reasons for great concern."

The government announced reforms totalling 22.7 billion kronor ($3.47 billion) aimed at stimulating growth and employment next year, including investments in infrastructure, research and development, and programmes to improve job opportunities for young people.

It also plans to cut the corporate tax rate from 26.3 to 22 percent to improve prospects for new jobs and investment.

Borg lamented that Europe would likely grow at no more than one percent in the coming decade, but added that Sweden is well-equipped to weather the persistent economic slowdown.

"Even if the Swedish economy grinds to a halt, if the global economy stops, we have room to implement needed measures," said Borg.

Borg said he expected Sweden's strong economic growth rate -- 3.9 percent in 2011 -- to slow in 2012 but maintained his forecast of 1.6 percent this year, 2.7 percent next year, and 3.7 percent for 2014.

He added that Sweden, which has in recent years presented a balanced or surplus budget, can expect a deficit of 0.3 percent of gross domestic product this year and 0.6 percent next year, before returning to a slight surplus of 0.3 percent in 2014.

The country is also in the enviable position of having a falling debt level: in 2011 it had public debt of 38.4 percent of GDP, which is expected to fall to 37.7 percent in 2012, 36.9 percent in 2013 and 34.7 percent in 2014.

"We have much higher growth numbers than the rest of Europe. And we haven't had any unpleasant surprises in our public finances," he said.

The government also expects unemployment to drop from 7.5 percent next year to 6.7 percent in 2014.

According to the government's calculations, the budget will add 0.4 percent to GDP growth in 2014 as well as 17,000 jobs.

In presenting the budget at the Riksdag, Borg painted a picture of the Swedish economy as being "a little better" than other countries when it came to growth, employment, and public debt.

However, the opposition was quick to pounce on the minister, with Social Democrat Fredrik Olovsson grilling Borg about the government's decision to scrap the goal of maintaining a budget surplus.

"That's been a strength of Sweden's that we've had a broad backing of this financial framework. Now the government's own expert agency has warned that policies aren't going to fulfill parts of that framework; that they won't reach the goal of maintaining a surplus," said Olovsson.

"You're not going to maintain a surplus, but you're still going ahead with a huge reduction in corporate taxes. Why?"

Borg refused to answer, however, instead launching a counterattack on the Social Democrats.

"We have Europe's strongest finances, stronger than Germany's, Finland's, the Netherlands' and Austria's. In that situation, when we take responsibility for protecting Sweden, investing in the future; when we choose infrastructure, research, corporate taxes; then Fredrik Olovsson says that's too much because they are too pessimistic and because they've already proposed everything," the minister responded.

"I don't think I've seen a more incoherent economic policy ever presented in this chamber. The only words that come to mind are political opportunism."

Meanwhile, the Green Party's Per Bolund slammed Borg for thinking more about the 2014 elections than the economic challenges facing Sweden.

"Anders Borg seems to be looking more at the election cycle than the business cycle," he said.

There was also plenty of criticism for Borg and the budget from outside the Riksdag chambers, with Social Democrat economic policy spokesperson Magdelana Andersson taking issue with the minister's employment forecast, which she argued was too optimistic.

"Anders Borg seems to be in a parallel universe; you could call it wishful thinking," she said.

She slammed the government's corporate tax cuts, expressing doubts as to whether the government would be able to keep Sweden's public finances in order.

Ulla Andersson of the Left Party said the budget showed that Borg and the government had "chosen sides".

"He's choosing by cutting corporate taxes and increasing big companies' profits instead of tackling unemployment," she said.

"In so doing, he's also rejected reforms that create jobs," she added, questioning whether lower corporate taxes would create more jobs as the government claims.

Union groups were also quick to express their displeasure over the 2013 budget.

Anders Ferbe, head of the IF Metall manufacturing union, argued the budget was "immoral and unacceptable" for not devoting any of the surplus funding to the ill and unemployed.

Karl-Petter Thorwaldsson, chair of trade union federation LO, also pointed to what he saw was a lack of measures to help combat unemployment.

"It's remarkable that the government doesn't take this opportunity to fight mass unemployment when 400,000 people are outside the labour market. The government's budget has huge deficiencies and isn't going to create the jobs we need," he said in a statement.

Business groups were more positive toward the government's budget, however, with Urban Bäckström, head of the Confederation of Swedish Enterprise (Svenskt näringsliv), praising the government's focus on reforms.

"Sweden needs more reforms that strengthen competitiveness and allow more ideas to be turned into profitable companies," he said in a statement.

"The government has taken several steps in the right direction."

Meanwhile Robert Berqvist, chief economist with the SEB bank, said the government's growth forecasts where "at the high end of the scale".

"His forecast is 2.7 percent and we're at about 1.5 percent. That's a big difference," Berqvist told the TT news agency.

TT/The Local/dl

Follow The Local on Twitter

Don't miss...X
Left Right

Your comments about this article

19:09 September 20, 2012 by Hisingen
Any good journalist should know that this sentence is not correct, and the word to have been used is FIGURES, not numbers.

"We have much higher growth numbers than the rest of Europe. . . ."

As to the content of the budget . as a pensioner I am staggered by the untold wealth that will eventually be coming my way. About 50SEK per month.

Wow, what shall I do with it all?????
20:29 September 20, 2012 by Abe L
I'm concerned about not taking serious steps to support consumer spending, most importantly through reduced income tax and/or lower VAT. That is what will be fuelling the economy the next couple of years to come.

I agree that it would have also been a better choice to spend some of the surplus on creating jobs and work. It would be in Sweden's interest to incorporate some legislations that make it more appealing to foreign companies. In a similar way Ireland, Luxembourg and Holland have done.
09:25 September 21, 2012 by Great Scott
This waffling buffoon keeps on about Sweden's economic strength, it's his answer to everything. The problem is, it's a lie and he continuingly spits this out to the Swedish public. He is playing with figures to suit himself, the words "strongest finances in Europe" are used by many finance ministers all over Europe. This is the only effort he works on as Sweden's finance minister, His doesn't see unemployment going through the roof, health care collapsing, poverty and crime rising. He doesn't want to answer questions outside of his little box. Once again this is a budget for the rich, he is looking after his own kind. He needs to go on one of these reality TV shows, where he can go to many places in Sweden and see for himself what it's really like outside of Stockholm. I think he might ask who the buffoon is running this country.
09:28 September 21, 2012 by micvau
This Swedish government seems to be living on cloud 9. Minister Borg you must be smoking some good Sh*t, because you're definitely away with the fairies with your futuristic financial predictions. You need to come back down to earth and start doing what's best for the Swedish working class. This following report sums up on how f''cked up the Swedish financial system really is.

Welcome to the modern Sweden and i hope you all now enjoy reading where your hard earned taxes are going to.

Fakta: Så mycket bidrag får invandrare.

Sedan etableringsreformen tradde i kraft får en nyanland arbetsløs invandramamma med tre barn foljande bidrag varge månad:-

6510 kr. etabieringsersattning

4500 kr. etableringstillagg

4500 kr bøstadsbidrag

3754 kr. barnbidrag

2546 kr. underhållsstød

= 21 810 kr i månaden skattefritt

Utøver detta har invandrare ratt till:

259 200 kr. i retroaktiv føraldrapenning.

12 000kr. skattefri SFI bonus.

Invandraren kan sjalv valja i vilken takt foraldrapengen ska betalas ut. SFI bonusen betalas ut vid avklarad kurs.

Inget av ovenstående bidrag kan dras in for att invandraren vagrar att ta ett erbjudet jobb.

KALLA: STATSKONTORET
Today's headlines
Eco-conscious Swedes in hen house trend
Chickens photo: Shutterstock.

Eco-conscious Swedes in hen house trend

Fresh eggs from the hen house at the bottom of the garden is the latest eco-friendly fad being pursued by Swedish urbanites ready to run the risk of a little neighbourhood friction to keep their Saturday pancakes organic. READ () »

Football fan father leaves baby in sweltering car
Parked car photo: Shutterstock.

Football fan father leaves baby in sweltering car

A baby was saved from a car parked in the stifling heat outside of a football stadium in western Sweden on Sunday with the child's father believed to be at the game. READ () »

Police launch probe after Easter ferry smash
A coastguard vessel involved in the rescue operation. Photo: TT

Police launch probe after Easter ferry smash

Stockholm police are investigating criminal negligence in connection with a crash involving a small taxi vessel and a giant Finland-bound ferry on Friday which left three people needing rescue from the icy waters of Stockholm's archipelago. READ () »

Ikea to introduce 'green' vegetarian meatballs

Ikea to introduce 'green' vegetarian meatballs

Swedish furniture giant Ikea is planning to put vegetarian meatballs on the menu in an attempt to cut down on its carbon footprint, the company has announced. READ () »

Students to keep paying off debt beyond 67

Students to keep paying off debt beyond 67

The Swedish government has proposed scrapping the 25-year span for repaying student loans, by suggesting those who attend higher education should keep paying the money back well into retirement. READ () »

Drowned puppies found in crayfish cage
The crayfish cage in the picture is not the one mentioned in the story. Photo: Christine Olsson/TT

Drowned puppies found in crayfish cage

Police in eastern Sweden have launched a preliminary investigation of animal cruelty after two puppies were found drowned in a crayfish cage. READ () »

Three rescued after cruise ship sinks boat
Rickard Rundgren Björk of the coastguard services speaks to the media after the rescue operation on April 19th 2014. Photo: Maja Suslin /TT

Three rescued after cruise ship sinks boat

Three Saturday morning sailors had a lucky escape after their small boat collided and sank after it crashed into a cruise ship whilst sailing in the Stockholm archipelago. READ () »

Missing Swede found alive and well in UK
Sofie Marie Jansson. Photo: Metropolitan Police

Missing Swede found alive and well in UK

British police have found the missing Swedish girl Sofie Jansson in London, exactly a week after she was last seen, with authorities saying she is doing well. READ () »

Social Democrats make tax pledge to elderly

Social Democrats make tax pledge to elderly

Sweden's opposition party has stepped up its efforts to secure the pensioner vote by pledging to lower taxes for the elderly and make higher earners pay more. READ () »

Malmö Nazi attack victim on the mend
Showan Shattak pictured in Malmö before his attack. Photo: Facebook

Malmö Nazi attack victim on the mend

The 25-year-old man, whose stabbing by neo-Nazis sparked mass demonstrations across Sweden, has made a strong recovery in hospital and took to social media to thank supporters for campaigning against fascism. READ () »

RECEIVE OUR NEWSLETTER AND ALERTS
TT
Society
Kids in Victorian garb mark Swedish Easter
Shutterstock
National
Swedish MP ordered chemtrail probe
Society
Swedish supermarket Ica pulls contested Easter commercial off air
Kungahuset
Society
Swedish royals set baptism date for princess
finest.se
Gallery
People-watching April 16
Politics
Who's the prime minister's heir?
Alfie Atkins
Society
Are children's books the key to families integrating in Sweden?
National
'Sweden Dem protests cater to party's martyr image'
National
'Swedish research grants were fantastic, but now it's like Australia'
Society
Only in Sweden: The ten problems you'd never encounter elsewhere
National
Swedes stopped to take my picture, but didn't look me in the eyes
Business & Money
A swipe of the hand replaced cash and cards in Lund
Advertisement:
YouTube
Features
Video: Oliver Gee finds out how to embrace The Swedish Hug
TT
National
Abba duo hints at reunion
Private
National
Flash mobs hug it out across Sweden
Finest.se
Gallery
People-watching April 11-13
TT
Politics
Swedes to give six-hour workday a go
TT
Society
Aussie choir member wows Abba in Sweden
YouTube
Society
Stockholm magic a surprise YouTube hit
Fastighetsbyrån
Society
Gallery: The Local's Property of the Week
Private
Society
Swedes find 200-year-old gravestone in living room
Stockholm School of Economics
Sponsored Article
Why a bachelor's degree is no longer enough
Deepti Vashisht
Features
Deepti Vashisht dissects the magic of Sweden's personal ID number
Shutterstock
Society
Ten signs you've been in Sweden too long
Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Blog Update: The Diplomatic Dispatch

28 October 15:16

The Green Growth Group Summit »

"Today on the 28 October in Brussels, a large group of key EU Ministers and business people, including UK Secretary of State for Energy and Climate Change Edward Davey, and Swedish Environment Minister Lena Ek, will meet to discuss green growth. They all have a stake in resolving a challenge which, although it is crucial..." READ »

722
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com