Prime Minister Stefan Löfven's Social Democrat-led coalition revealed its first budget proposal on Thursday, listing how it planned to spend more than 20 billion kronor ($2.8 billion).
But the budget could be tricky to get through parliament.
Sweden's new government is fragile. The Social Democrats and the Greens only earned 38 percent of the vote in elections in September, which means Sweden's opposition parties have a strong voice in parliament.
All eyes are on the Sweden Democrats, the nationalist party that gained 12.9 percent of the votes last month and became Sweden's third most popular party.
It could hold the balance of power by rejecting the new budget and this could even trigger a fresh election in Sweden.
But how would this all happen? Well, it's complicated.
There are actually three budgets being put forward on Thursday. As well as the coalition government's suggestion, the four Alliance parties that made up the previous centre-right government have produced a budget, as have the Sweden Democrats.
If each group votes for its own budget then parliament's Speaker is likely to call a re-vote on the two budget proposals with the most votes – inevitably the coalition and the Alliance budgets.
At this stage the Sweden Democrats will hold the key to what happens next.
Due to Sweden's system of negative parliamentarism, the budget that is selected does not need to have majority support, just the biggest share of the vote.
So if the Sweden Democrats join the Alliance in voting for the centre-right budget in the second round, then this budget could go through.
Then, the country's centre-left coalition would – in theory – be legally obliged to govern with a centre-right budget.
Analysts have suggested this would lead to a dissolution of parliament and a general election, stating that a country cannot be led by a coalition using a budget put together by the opposition.
Alternatively, the Sweden Democrats could choose to abstain, which would mean the government would have a big enough share of the vote to push its budget through.
Sweden Democrats Jimmie Åkesson, Julia Kronlid and Mattias Karlsson. Photo: TT
Political Scientist Li Bennich Björkman from Uppsala University thinks the Sweden Democrats are doing nothing more than showing off their feathers, by threatening to reject the coalition's budget.
"I think they want to use the chance to show off their power," she told The Local.
"They're not part of this more mature group of parties who don't do this kind of showing off. I think they're just looking for a chance to get even. They're trying to show that they're a force to be reckoned with and that people shouldn't take their support for granted."
She added that the party was not building any kind of alliances easily, and that its budget rejection threats were most likely nothing more than a psychological game.
"New elections are very unusual in Sweden, it's almost never happened, and I don't think it will happen this time around. Especially considering [Party Leader] Jimmie Åkesson is ill – he's extremely important for the party," she explained.
"If for no other reason, the absence of Åkesson is why they might not push for it."
Jimmie Åkesson in the Riksdag. Photo: TT
Åkesson sidelined himself from politics last week citing a stressful election campaign. He said his doctor had diagnosed him with chronic fatigue.
Political Scientist Li Bennich Björkman stressed that despite the party's significant support, it's not much without its "trademark" leader.
"He is the one who changed the party into a much more moderate and pragmatic party from its fundamentalist roots. They were all basically extremely unpleasant and racist. But his appearance and communication skills, as well as his general intelligence, is very important to the party."
"The Sweden Democrats have long been the underdogs and the outsiders, and they're always going to have the urge to prove that they're a force to be reckoned with," she concluded.