'Every wasted krona amounts to theft'

It’s hardly a well-guarded secret that Sweden’s heavily taxed electorate is fed up over government waste – both in terms of the staggering volume and hamfisted management. Recognizing this pent-up frustration, the Swedish Taxpayers Association has joined hands with the free-market think tank Timbro to appoint a special ombudsman to which citizens can report wasteful government spending. Inaugural Taxpayer Ombudsman Johan Ingerö lays out the case for SlösO (WasteO).

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"Every wasted krona should be regarded as a theft from the people," Gustav Möller, the legendary Social Democrat and minister of social affairs, famously quipped. This quote has been regularly dusted off by politicians from across the political spectrum. While politically efficacious, the central message of the quote seems to have been lost on the political class, as evidenced by the vast sums of hard-earned taxpayer income wasted each and every year. Before examining some particularly egregious examples, let us dwell for a moment on the concept of waste. What constitutes a wasted krona?

Several definitions spring to mind. Purchasing goods or services one cannot realistically afford is perhaps the one closest to hand. Yet it can also relate to paying far too high a price for items one genuinely requires, likely due to poorly managed procurement. And let us not forget projects that inevitably run over budget, as well as the myriad minor items that live an anonymous existence on the state’s ledger, never to rear their ugly heads during a campaign debate.

While I have neither the time nor resources to shed light on every instance of government waste in Sweden, my initial inquiry has revealed some astonishing and flagrant examples. Indeed, waste is rampant across all of Sweden’s municipalities as well as its county councils and state agencies – not to mention that monstrous machinery of the European Union.

Sweden, like most countries, has been rocked by the current financial crisis. Banks and automakers have taken a beating, and several times the government has stepped in to ease the pain by issuing guarantees or emergency loans. This year alone Sweden's municipalities and county councils may receive an additional 17 billion Swedish kronor to avoid making cuts in core welfare services. Despite this fiscal stimulus, though, many local governments are running massive deficits. Extraordinarily, this hasn’t stopped them from pumping taxpayer money into local pork projects.

Roughly 170 million of the 17 additional billion kronor will be funneled to Norrköping, a municipality that, during the last boom, plunked down 300 million kronor for a football arena that now buckles under the weight of 20 million kronor in annual operating costs. Indeed, sports arenas play in a division of their own when it comes to wasteful government spending. The local youth and children’s board in Vänersborg, for instance, received 90 million kronor for an indoor arena. The budget for the arena was soon revised to first 140 and then 176 million kronor. And the costs continue to climb. The most recent forecast projects a final cost of 270 million kronor. Värmdö, a community with a total annual budget of around 1.5 billion kronor, spent 130 million kronor of the taxpayers’ money on a water park. According to the municipality's calculations, 100,000 paying customers per year would cover costs. Despite over 160,000 paying customers in 2009, however, the water park hemorrhages about one million kronor a month.

In municipality after municipality one discovers frivolous and ill-conceived projects whose underlying budgets are, to put it diplomatically, unrealistic. But waste is not confined to million-krona boondoggles. In fact, one can find pesky and unjustifiable expenses in almost all of Sweden’s municipalities.

Instances of small-scale waste are, in some ways, far more egregious than any singular mammoth endeavor because they concern sums whose relative insignificance defies scrutiny. As such they are rarely if ever the subject of debate. But what they lack in size they make up for in number.

The virtual world Second Life, a passing Internet fad, initially attracted keen interest from the public sector. The municipality of Malmö, for instance, spent 1.2 million kronor creating a presence in Second Life. The Umeå Live project, funded by the municipality of Umeå, Västerbotten County Administration, and Umeå University, has also invested in Second Life. The Swedish Research Council granted researchers in Umeå three million kronor to study "religiosity in virtual worlds."

One would be forgiven for finding these initiatives laudable and interesting. But given each community’s finite resources, it will sooner or later become a matter of priorities. Vänersborg, which you will recall ploughed over 250 million kronor into an indoor sports arena, has at the same time jettisoned 162 school employees. But waste can have other adverse effects, as well. Värmdö’s loss-making water park, for example, has forced a local fitness club out of business. In other words, taxpayer money has funded activities leading to the unemployment of local residents.

In a radio debate last year, the Minister for Local Government and Financial Markets, Christian Democrat Mats Odell, said that politicians who buy hot tubs at the expense of senior care will be thrown out of office. Though in agreement on principle, Social Democrat Sven-Erik Österberg countered that all this talk of waste was pure "nonsense" based on "myths." My research has shown, however, that politicians of every hue have a hard time distinguishing between important and unimportant expenses and between necessity and frivolity.

To be sure, wasteful government spending is a hot-button issue for many voters. In recognition of this frustration, the Swedish Taxpayers Association and Timbro, a free-market think tank, have created a taxpayer ombudsman. Now citizens have someone to whom they can report wasteful government spending.

In the coming year, I as the serving ombudsman will review complaints, bringing them to public attention and acting to stem the tide. I will not scrutinize the level of taxation, but rather how the money is spent. I am confident that all political parties are keen to pare down wasteful spending in these trying financial times. After all, every wasted krona constitutes a theft from the people.

Johan Ingerö

Sweden’s Taxpayer Ombudsman