Sweden earmarks ten billion kronor for regions

The government has revealed it is to set aside 10 billion kronor ($1.4 billion) for core welfare services in Sweden's regions and municipalities in the forthcoming autumn budget.

• Government maintains popular approval: poll (7 Sep 09)
• Alliance parties agree to reduce taxes (28 Aug 09)
• Sweden allocates billions to fight unemployment (26 Aug 09)

The state support is being billed as a temporary one-year measure to "safeguard welfare provisions in municipalities and regions." The extra funding is set to take effect in 2010.

Seven billion kronor have been earmarked for the country's municipalities (kommuner), with three billion to be shared among the regions (landsting). The extra funding is to be divided in proportion to the relative populations of the localities concerned.

The government said it expects the additional spending to help save 13,000 jobs.

"The money is to be used to avoid panic cutbacks. It's not for employing new staff but for preventing lay-offs," Prime Minister Fredrik Reinfeldt told news agency TT.

But Social Democrat economic affairs spokesman Thomas Östros described the funding as the rushed rescue operation of a government under pressure.

"I had hoped the municipalities would receive information about how to fund the health care and education sectors in the long term. Now the government has been forced into an emergency operation that just covers the next year," Östros told TT.

The Swedish Association of Local Authorities and Regions (Sveriges Kommuner och Landsting – SKL) had said that 4 to 5 billion kronor were needed next year to maintain the same level of support as 2009.

Last week, the parties in the governing centre-right coalition agreed to reduce income tax by 10 billion kronor next year, as part of the fourth stage in the parties’ in-work tax credit programme (jobbskatteavdraget). The tax cuts will mean individual tax reductions of up to 250 kronor per month.

But the proposal will also make it difficult for the government to entirely ignore the demands of pensioners.

At the end of August, the Alliance parties also announced an 8.4 billion kronor ($1.19 billion) scheme to fund education and training measures designed to combat growing unemployment.