Greens in household services u-turn

Greens in household services u-turn
Sweden's Green Party has ditched its long-held opposition to a controversial centre-right government scheme allowing tax deductions for household services.

“We think the tax deductions for household services (‘RUT-avdrag’) should stay in place,” economic policy spokeswoman Mikaela Valtersson told public broadcaster SVT.

“A lot of families with children use it to make their everyday life easier, and a lot of older people have also started using RUT. Consequently, we think it’s better to keep the reform in place,” she said.

RUT stands for ‘rengöring, underhåll och tvätt’ (cleaning, maintenance and laundry).

The tax break enables people to deduct from their tax bill half the cost of household services such as cleaning, cooking, lawn-mowing, snow-shovelling and babysitting.

The Greens previously played up the idea of instead stimulating consumption by lowering value added tax rates in the areas of the services sector affected by the reform.

“RUT is more expensive because because it’s a bigger subsidy,” said Valtersson. “Our VAT proposal would have been cheaper. It would have cost around 1 billion kronor ($165 million), which is maybe a quarter or a third of the cost (of RUT),” she told news agency TT.

On Tuesday, Valtersson is set to present the Green Party’s alternative to the government’s spring budget.

One of the party’s proposals would entail adapting and expanding the government’s less controversial tax break scheme for home maintenance, the so-called ROT deduction. ROT stands for ‘reparation, ombyggnad och tillbyggnad’ (repairs, conversion and extension).

The Greens argue that the scheme should reward environmentally friendly solutions, while also encompassing renovation work in rental properties.

“The most pressing need for renovations is to be found in apartment blocks,” said Valtersson. “As such, we think it (the scheme) should be used for measures taken to reduce energy use, such as replacing windows or improving insulation.”

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