Budget: Nuder spends to cut jobless figure

Sweden’s finance minister promised lower unemployment and higher GDP when he presented his autumn budget to Swedish lawmakers on Tuesday.

Pär Nuder said that his budget was unique, as the first budget for many years not to contain cuts. He said that the money and possibilities were there “to go on the offensive”.

Nuder claimed that “something interesting is happening with the economy.”

“This gives is the chance to strengthen this trend, and improve things for those groups that need an extra hand.”

‘Open unemployment’, which does not count people on government work programmes, will be 5.9 percent in 2005, falling to 4.8 percent in 2006. But the expected fall in this figure is almost entirely accounted for by increased money for the government work programmes.

The number of people employed in these schemes is to increase from 2.7 percent in 2005 to 3.6 percent in 2006; meaning that the overall unemployment figure will only fall by 0.2 percent.

Employment is forecast at 76.6 percent in both 2005 and 2006.

Nuder also said that he expected the central government debt to increase from 28 billion kronor today to 37 billion kronor in 2006 before falling again in 2007. The finance minister said that the government would raise its expenditure ceiling from 870 billion kronor in 2005 to 907 billion kronor in 2006 and 949 billion kronor in 2007.

Net government lending is set to reach 1.4 percent of GDP in 2005, twice the level predicted in the spring budget. The government said that this would fall in 2006 thanks to budget measures on unemployment and tax.

Opposition parties were unimpressed by Nuder’s package of measures. Mikael Odenberg, finance spokesman from the main opposition Moderate Party, said that Nuder had presented a typical pre-election budget. Low government opinion ratings, poor relations with its coatlition partners, the approaching election and the threat of defeat could prove very expensive for Sweden, he warned.

“The net deficit for 2006 is 24 billion kronor, and for 2007 28 billion kronor,” he said.

“The government isn’t even getting half way to parliament’s goal for getting to a surplus of 2 percent in the public finances.”

Oldenberg said he would not dismiss the government’s job creation plans out of hand, but said that it would be more likely to give 15,000 than the government’s predicted 55,000 jobs.

Liberal Party spokeswoman Karin Pilsäter said that Sweden needed to get 100,000 people into work.

“We have fewer companies today than at the bottom of the slump in the early nineties,” she said.

“We need to get more companies who want and dare to creat jobs.”