• Sweden edition
 
Unions propose profit cap on welfare business

Unions propose profit cap on welfare business

Published: 15 Jan 2013 10:30 GMT+01:00
Updated: 15 Jan 2013 10:30 GMT+01:00

"Working for the public good and limiting how much profit is taken out should be fundamental principles," LO vice-chair Tobias Baudin and leaders in 14 of its member unions wrote in an op-ed published on Tuesday in the Dagens Nyheter (DN) newspaper.

In order to implement the profit cap, the authors suggest creating a new type of company which they dub samhällsbolag ('community companies').

The new companies would be based on a corporate structure that includes conditions closely tying profits to interest current rates.

Currently, there are about 50 such companies, referred to as SVB firms, an abbreviation stemming from särskild vinstutdelningsbegränsning (special profit limitations'), the Swedish term describing their built-in cap on profits.

In October, a parliamentary motion submitted by members of the Green Party also referenced SVB companies as a potential solution to the debate regarding profits in the welfare sector.

The union representatives also proposed a new council or state agency with the mandate to survey activities in the welfare sector.

"Tax money meant to finance the citizens' schools, health care and social services are ending up in private pockets," they wrote.

"Nowadays, it is completely permissible to allow private companies to make a profit at the expense of welfare quality."

Creating a new type of company based on the SVB form proved unpopular with private welfare providers.

"There are two things in the LO proposal that both surprise and upset me. Firstly, the model they propose has already been tested but today there are no welfare providers run in that manner," Håkan Tenelius at the Association of Private Care Providers (Vårdföretagarna), which represents employers, told the TT news agency.

"In practice, it is impossible to run a business in the long term with that type of model."

He also thinks the profit-cap means tax payers will have to invest more than they do today as a reform would scare off potential investors.

"It would hamper new investments which are sorely needed. Who, apart from the tax payers, would want to pump in more cash to run a business that is so forcefully restricted?" Tenelius asked.

Political reactions to the proposal, which would reverse some aspect of the centre-right government health care and social services reforms, were mixed.

"It falls in line with what we have proposed," noted Left Party leader Jonas Sjöstedt.

"Profit-seeking companies should not run welfare services."

He classified the LO idea as more forceful than proposed reforms from the Social Democrats, who are the government's main opposition in parliament and have historically been allied to the union movement.

New party leader Stefan Löfven's refusal to tackle profits in the welfare sector head-on last year drew some internal criticism, partly from the party's student wing who called it "naive".

"It's quite a big difference in that LO wants to remove the profit aspect, it's a much sharper proposal than the one from the Social Democrats," Left Party leader Sjöstedt told TT.

The LO proposal, however, immediately faced flack from business associations.

"It is highly regrettable that LO chooses a regulation line that gets in the way of business and risks leading to job losses," Urban Bäckström, CEO of the Confederation of Swedish Enterprise (Svenskt Näringsliv), said in a statement.

It branded the LO proposal "an attack on business".

"More than 10,0000 private companies and 100,000 employees could be affected be the proposals that LO have put forward."

TT/The Local/at

Follow The Local on Twitter

The Local (news@thelocal.se)

Your comments about this article

11:59 January 15, 2013 by star10
In general, capping the profits for any service provider to the government should be a good idea. Government contracts typically deliver massive profit for bid winners because of the lobbying by the contract winners. This is effectively a transfer from the average tax payer to mega-rich companies. Now, these mega rich companies are ripping tax payers from basic services like elderly care. They go as far as denying the elderly basic things like diapers to bolster they big pockets. This measure neither stifles jobs nor kills business, it just takes away the massive profit that government contractors pocket. That is why the CEOs are crying. Shamelessly, they (the CEOs) expect the average citizen to sympathize with the greedy millionaires who still want to have more share from the tax-payers coffer.
Today's headlines
Sport
Sweden's star striker Zlatan 'recovering well'
Zlatan Ibrahimovic is Sweden's top scorer in history. PHOTO: TT/Maja Suslin

Sweden's star striker Zlatan 'recovering well'

Zlatan Ibrahimovic is recovering well from the nagging heel problem that has stopped him playing for Sweden during its Euro 2016 qualifying campaign. READ  

International
Swedish sisters create viral Syria stir
A shot from the video on YouTube.

Swedish sisters create viral Syria stir

Two sisters from Södertälje near Stockholm are celebrating getting more than 1.3 million hits on YouTube, with a video calling for peace in war-torn Syria. READ  

Pirate Bay
Pirate Bay founder gets three years in prison
A 2013 image of Svartholm Warg. Photo: TT

Pirate Bay founder gets three years in prison

Swedish "hactivist" Gottfrid Svartholm Warg has been sentenced to three-and-a-half years in prison for hacking crimes. READ  

Royal family
Princess Madeleine to make Nobel comeback
Princess Madeleine at a previous Nobel banquet. Photo: TT

Princess Madeleine to make Nobel comeback

Sweden's Princess Madeleine is scheduled to appear at the Nobel Festival in Stockholm in December, after taking time out from her royal duties to focus on looking after her daughter. READ  

Politics
'We knew that Israel would be critical'
Foreign Minister Margot Wallström (left), with Sweden's Prime Minister Stefan Löfven. Photo: TT

'We knew that Israel would be critical'

Sweden's Foreign Minister has told The Local she respects Israel's decision to recall its ambassador after Sweden officially recognized the State of Palestine, and laughed off comments about IKEA furniture made by her Israeli counterpart. READ  

Analysis
'Store up your sunlight hours before winter'
Doctors say we should make the most of the autumn sunshine. Photo: Shutterstock

'Store up your sunlight hours before winter'

Spending time outdoors this autumn will help you survive a cold, dark Swedish winter. Baba Pendse, Head of Psychiatry at Lund University shares his top tips for battling the seasonal blues with The Local. READ  

Sports
Plot for shared Scandi Winter Olympic bid
Skiers hit the slopes in Åre, western Sweden. Photo: TT

Plot for shared Scandi Winter Olympic bid

Norwegian sports officials have said they want to co-host the winter Olympics with Sweden in 2026. But there has so far been no official response from Sweden. READ  

National
Anti-Israel graffiti 'not a race crime': Court
Photo: TT

Anti-Israel graffiti 'not a race crime': Court

A teenage boy who painted anti-Israel slogans and symbols on the Concert Hall in Gothenburg has been convicted for the damages he caused, but he walked free from racial agitation charges. READ  

Entertainment
A closer look at Sweden's rising stars
Swedish actresses Sandra Huldt and Julia Ragnarsson. Julia (right) has been nominated for a Rising Star award. Photo: TT

A closer look at Sweden's rising stars

Like to be ahead of the game when it comes to the next big thing on the silver screen? We find out more about the Swedish nominees for the Rising Star award to be presented at Stockholm's International Film Festival next week. READ  

Science
Swedish women in two-year sex pill study
Contraceptive pills have been linked to mood swings. Photo: Shutterstock

Swedish women in two-year sex pill study

Three hundred women from across Sweden are taking part in a study designed to demonstrate that modern contraceptive pills don't lead to decreased libido or mood swings. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Lifestyle
Stockholm's shocking take on Halloween
Sport
Top ten quotes from Zlatan Ibrahimovic
Business & Money
Get your own office in Gothenburg or Stockholm - free for a day
Gallery
People-watching: October 30th
National
Sweden remains fourth best for gender equality
Blog updates

31 October

Editor’s Blog, October 31st (The Local Sweden) »

"Hello readers, Welcome to our latest 60-second round-up of the week’s news. First, Sweden made headlines around the..." READ »

 

29 October

Scariest day (Blogweiser) »

"This is what’s frightening me on Halloween. http://www.youtube.com/watch?v=D4OFZVCu8J0&list=UUJu5J7jG4uoYSjWbpFsJBuQ Follow my posts on FB. ..." READ »

 
 
 
National
Timeline: Julian Assange sex allegations
Sport
World Cup ski race on 'fake' Stockholm slope
Society
An Arctic tradition: hunting and handicraft
Society
Stockholm taxis offer free therapy sessions
National
The Local meets Health Minister Gabriel Wikström
Gallery
Property of the week: Österåker
Society
Homeless turtles get Stockholm police ride
National
Construction worker has 'Sweden's best beard'
National
Italian musician jazzes up Sweden's Lapland
Gallery
Zlatan's career in pictures
Finest.se
Gallery
People-watching: October 25th and 26th
Lifestyle
'Swedes are funnier than they think'
National
Swedish town 'like Venice' after heavy rains
Lifestyle
What's On in Sweden: October 24th - 31st
Gallery
People-watching: October 22nd
Gallery
In Pictures: Prince Carl Philip and Sofia Hellqvist
Lifestyle
Eight things to love about renting a Swedish apartment
National
Vasa ship cannon blasted in Sweden
National
Sub hunt: Day-by-day
National
Sub hunt: Stockholm islanders share their fears with The Local
Sponsored Article
The best options for oversea transfers
National
Dentist gives free care to Roma beggars
Gallery
Property of the week: Malmö
Gallery
PHOTOS: 'Foreign activity' in Swedish waters
TT
Society
QUIZ: How good is your Swedish?
Society
The nudity... and nine other things expat men notice in Sweden
Gallery
People-watching: October 15th
Gallery
Your views: Should outdoor smoking be banned in Sweden?
Business & Money
Sweden has 'large hole' in finances
Sponsored Article
Introducing... Finding a job in Stockholm
Society
Monster salmon caught in northern Sweden
Gallery
Property of the week: Lorensberg
National
Scandinavia's child bride
National
Ebola crisis: How is Sweden preparing?
Business & Money
How Sweden is becoming a cashless society
Gallery
Stockholm Burlesque Festival 2014
National
How a little red horse became a symbol for Sweden
Gallery
People-watching: October 12th
Business & Money
The hottest start-ups from southern Sweden
National
Stockholm is 'best' region for well-being
Sponsored Article
How to catch the first lobster of the year
Team SCA
Sponsored Article
All-female SCA team takes off on Volvo Ocean Race
Latest news from The Local in Austria

More news from Austria at thelocal.at

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 Denmark

More news from Denmark at thelocal.dk

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

982
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
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN