Opposition leaders edge towards tax agreement

The leader of Sweden's Christian Democrats, Göran Hägglund, hosted a gathering of the heads of the opposition conservative parties in Bankeryd on Tuesday. The aim - to present a unified front on income tax reform.

At about 6pm they broke off negotiations to attend a party in central Jönköping.

The Moderates’ leader, Fredrik Reinfeldt, revealed that the four – completed by Maud Olofsson of the Centre Party and Lars Leijonborg of the liberals, Folkpartiet – had taken a step forward towards an agreement.

“A reform of income tax and how it should be financed will remain in focus,” he said.

The party leaders had also delved into the thorny issue of making savings in sickness benefit.

“We’ll see if something comes of it, said Lars Leijonborg.

The Christian Democrats’ leader, Göran Hägglund, described the discussions as “constructive and good”.

The four leaders will be holed up in Bankeryd until Wednesday afternoon, attempting to hammer out the foundations to the economic policies of the conservative government which they hope will replace the Social Democrats in September 2006.

“We have put pressure on ourselves to reach a result,” said Maud Olofsson.

Mingling with journalists in Hägglund’s garden, Reinfeldt emphasised the need for the alliance to show how tax cuts would be financed. It would be an important counterbalance, he said, to the “left cartel’s improbable election promises”.

The package of reforms under negotiation around Hägglund’s coffee table is focused on three areas.

One is income tax. The Moderates want a conservative government to slash tax by 50 billion kronor in the first year. That would give someone with a monthly income of 20,000 kronor an extra 1,000 kronor to play with each month.

Folkpartiet is at the other end of the conservative spectrum and only wants a 25 billion kronor tax cut.

A source revealed to news agency TT that an agreement is within reach – and that could mean a compromise of tax cuts on a scale which the Moderates favour, but over several years rather than one.

The second area is the politics of business. The Moderates are considered by their allies to place too much emphasis on a reduction in income tax, while the Centre Party is calling for business tax cuts to stimulate employment.

Third is the financing of the tax reforms – and Folkpartiet has already said no to the Moderates’ proposal of cutbacks in sickness benefits.

TT/The Local