Jobs dominate spring budget

Finance Minister Anders Borg's spring budget has met with mixed reactions. Per Nuder, Borg's predecessor in the post, has called the proposals "irresponsible, unjust and outdated". The business community has lent the budget its cautious support.

On Monday morning Anders Borg presented a spring budget characterized by a slew of reforms and tax cuts.

As Borg embarked on his first ‘budget walk’ from the finance department to the Riksdag, he was confident that the proposals would give results.

“For the first time Sweden has a government that will bring about a lasting increase in regular employment,” he said.

But Borg added that the government is not yet satisfied. In order to further reduce unemployment, the government is set to invest in four major packages: one each for entrepreneurship, integration, young people and jobs.

On December 1st the government is to introduce its controversial jobs guarantee for young people, to be followed next year by new apprenticeship courses at upper secondary level gymnasium schools.

The government has also set aside 3.6 billion kronor ($517 million) for the integration of newly arrived immigrants. Municipalities with healthy labour markets are also to be provided with financial incentives to take in larger numbers of immigrants.

People on early retirement schemes returning to part time work will be eligible for an extra 1,500 to 5,000 kronor ($200-700) per month, according to Borg.

In other reforms, the government is to move a step closer to the abolition of advertising tax. Also, as previously announced, wealth tax and residential property tax are to be removed.

Funds are also to be set aside for environmental programmes, care for the elderly, and the renovation of JAS Gripen fighter planes.

Job creation is at the centre of the government’s proposals. One billion kronor is to be spent on ‘introductory jobs’, whereby local councils are to make it easier for unemployed immigrants to join the labour market.

Pär Nuder, the Social Democrats’ economic spokesman, was critical of the budget.

“The government seems to believe that justice has to be sacrificed for an economy to thrive. It doesn’t need to be like that,” he said, pointing to growth figures during the previous government’s final year in power.

Nuder was particularly critical of the government’s jobs guarantee for young people.

“The jobs guarantee is a guarantee for lower pay and tougher conditions,” he said.

The former finance minister also accused the government of pushing through irresponsible policies, such as the abolition of wealth tax.

“The result will be higher interest rates,” said Nuder.

The government’s commitment to getting the long-term unemployed back into the labour market comes with a 10 billion kronor price tag. The new ‘jobs and development guarantee’ is estimated to affect 62,000 people and is the largest and most expensive package in the budget.

Företagarna, the Federation of Private Enterprises, has welcomed many of the governments proposals.

Johan Kreicbergs, Företagarna’s chief economist was positive towards changes in the payment periods for VAT and the introduction of apprenticeship courses at upper secondary level gymnasium schools, which he hopes will help alleviate the problem many companies have of finding qualified workers.

Kreicbergs is however critical of the government’s failure to improve security for people who run their own businesses.

“Solutions need to be found that will encourage more people to start companies. As it stands, many people can never be away from their company. The government has promised to look into this but we haven’t seen anything yet,” he said.