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Sweden presents budget for 'full employment'

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Sweden presents budget for 'full employment'
09:27 CEST+02:00
Sweden's finance minister Anders Borg presented a budget for 2011 on Tuesday morning including 13 billion kronor ($2 billion) in new measures, promising to move Sweden from "crisis to full employment".

"The government's primary goal is to take Sweden back to full employment. We are therefore continuing our efforts to strengthen the work-first principle and reduce exclusion," Anders Borg said in presenting the budget worth a total 1,005.5 billion kronor.

Borg presented a raft of initiatives to promote the goal of full employment and "safeguarding publicly financed welfare".

Anders Borg laid out the government's priorities as: increasing employment and reducing exclusion, increasing knowledge, safeguarding core welfare services and reducing the effects of the crisis and reducing emissions and climate impact.

As expected taxes will be cut for pensioners, higher housing benefit allocated for child families and an extra 3 billion kronor earmarked for municipalities for 2011.

With more asylum-seekers having arrived in Sweden than previously forecast in 2010, the government has allocated 400 million kronor to helping municipalities to cope.

The government's main climate initiative is the so-called super eco-car premium, with further resources to combat climate change promised from 2013.

Education was an area in focus in the budget, with the emphasis placed on compulsory schooling, promising improvements in both "quantitative and qualitative terms".

In practice this means that teaching time for mathematics will be increased, further teacher-training offered, and an apprentice system introduced in high schools.

Additional funds were allocated for Almi - a publicly owned firm tasked with the promotion and development of competitive small and medium-sized businesses. A directed investment totalling 2 billion kronor was allocated to strengthen business development in the inland areas of northern Sweden.

The government outlined ambitions for reform over the mandate period totalling 33 billion kronor, including a fifth in-work tax credit and a hike in the threshold for the levy of state income taxes, to be combined with equivalent cuts in taxes on pensions.

Further ambitions include a halving of restaurant sales tax (VAT), to be financed by hikes in alcohol and tobacco taxes - on cigarettes by 8 percent, on snuff by 11 percent, and 13 percent on beer and wine.

The goal of introducing a compulsory unemployment insurance remains a priority, according to the budget statement.

If economic conditions allow, the government would also like to make further changes to "strengthen growth", for example in company taxes, payroll levies, the so-called temporary austerity tax, venture capital and research and development deductions, and expert taxes.

The government deemed however that it is unlikely that the economic scope will facilitate the changes during the current mandate period.

The government also said it expected the partial sale of state owned

companies Telia, SBAB and Nordea to yield around 25 billion kroner a year for

the next four years.

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