Lower taxes but higher fees in Alliance budget

A conservative-liberal Alliance government would reduce tax by nearly 45 million kronor, according to proposals published on Monday.

But the tax cut would be accompanied by higher fees in a number of areas.

The Alliance presented a plan for the financing of tax cuts at Monday’s press conference.

“These are fully-financed proposals,” said the Moderate Party’s finance spokesman, Mikael Odenberg.

“In this way, we show the difference between us and the government.”

A centre-right government would reduce income tax by 45 billion kronor during its first two years in office. According to calculations by Förenings Sparbanken, this would mean an extra 880 kronor in the pockets of someone on a monthly salary of 21,400 kronor.

But some of this money risks being eaten up by higher fees. Contributions to unemployment insurance will be made obligatory, and fees raised by an average of 270 kronor per month.

In addition, the Alliance proposes transferring to insurance companies the costs for sick pay caused by injury in road accidents. This means that car insurance will become 110 kronor per month more expensive.

But the Christian Democrats’ Mats Odell insists that “the vast majority” would have “a significantly larger disposable income” if the proposals were adopted.

The leaders of the four parties that make up the Alliance decided on the size of the tax cuts and the fundamental elements of the savings package at their meeting in Bankeryd at the end of August. Today’s announcement answers some of the unresolved questions over the Alliance’s proposals.

The Alliance had expected to be able to save around 8 billion kronor through its proposals on car insurance. That figure has now been revised to 2.8 billion. But as their expected savings has been greater than their intended tax cuts, the parties’ proposals were able to absorb some miscalculations.

Another change since Bankeryd is that cuts to benefits for the long-term unemployed have been reduced. Unemployed people without children would get benefits of 65 percent of their final salary after 300 days out of work. This means a maximum of 545 kronor per day.

“At that amount, it is not exactly a bed of roses, but it’s quite possible to live on,” said Karin Pilsäter of the Liberal Party.

The Alliance’s previous proposal would have meant benefits of a maximum of 320 kronor per day. The cuts will also finance lower taxes for companies.

TT/The Local