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POLITICS

What Sweden’s new budget means for internationals

After Sweden's government on Wednesday announced its spring budget, The Local looks at some of the most important points for internationals living in Sweden.

What Sweden's new budget means for internationals
Finance Minister Magdalena Andersson presents the spring budget. Photo: Naina Helén Jåma / TT
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The governing Social Democrats and Green Party have worked with the Centre and Liberal parties on the budget, as agreed in a cross-bloc deal struck back in January.

This means there aren't many surprises in the budget, since the four parties released their 73-point programme earlier in the year. Scope for changes was also reduced by the right-wing budget put forward by the Moderate and Christian Democrat parties in the autumn, which included several tax cuts that left less money available for new reforms.

But there were still a few new announcements on Wednesday, including changes to employer fees and other investments that could directly impact the lives of the Swedish population.

The new reforms add up to a total of 4.5 billion kronor, financed by corresponding tax increases and savings. Here are some of the key points to know, and what they mean for you.

Changing employer fees

In total, 1.1 million kronor was allocated for increasing the number of people in work.

One useful piece of news for new arrivals in Sweden was the allocation of 45 million kronor to so-called 'new start' jobs. It will no longer be essential for these roles to be covered by collective bargaining agreements, a change intended to make it easier for foreigners to enter the labour market, although the move has been criticized by some as a reduction of workers' rights.

OPINION: Low-paid jobs for foreigners aren't the solution to an unequal labour market

Opinion: Low-paid jobs for foreigners aren't the solution to an unequal labour market
Photo: Moa Karlberg/imagebank.sweden.se

Sole traders will now be able to pay reduced employer fees if they hire an employee. Reduced fees were already in place for sole traders, but have been extended from one year to two, at a cost of 120 million kronor.

And one change which is aimed at making it easier for young people to enter the job market is a reduction in employee fees for workers aged between 15-18. The fees for employers on monthly salaries of up to 25,000 kronor for workers in this age category have been cut from 30 percent to only ten percent. The government has set aside 380 million kronor for this change.

Climate issues

Investment in the climate was a key part of the budget announcements on Wednesday.

One of the most exciting pieces of news for keen travellers will be the 50 million kronor investment in facilitating train travel to continental Europe, including investment in night trains.

READ ALSO: Why people in Sweden are breaking a steady trend and travelling less

The government is investing an extra 100 million kronor annually on environmental measures within Swedish industry, with Andersson commenting: “Today, industry accounts for about one third of our  emissions and the goal is that Sweden will not have any net greenhouse gas emissions by 2045.”

The budget also means flight tax would be re-introduced, after being brought in by the previous centre-left government but abolished by the centre-right budget. This was already outlined in the January deal, and although it's unclear whether and how this could directly affect ticket prices, critics have argued it could lead to route closures or relocations by making Sweden a less attractive hub for airlines.

Taxes were also raised on some kinds of heat production, chemical use, and diesel for mining equipment.
 
Investment in schools

The Liberal party in particular has called for investment in education, and the budget included 475 million kronor for hiring more teaching assistants in schools around the country. This is in response to growing concern about increasing class sizes and teachers' workloads.

IN DEPTH: What's behind the rising inequality in Sweden's schools, and can it be fixed?

What's behind the rising inequality in Sweden's schools, and can it be fixed?
Photo: Hossein Salmanzadeh/TT

Welfare

Many of the new investments announced in the budget were possible because of reductions in investments in elderly care as planned under the centre-right autumn budget. This was criticized by the Moderates, Christian Democrats, and Sweden Democrats after the announcement on Wednesday.

But there were significant announcements in other aspects of welfare, accounting for 0.9 million kronor in total.

This included 40 million kronor to assist homes for women's shelters, and a further 45 million kronor to tackle domestic violence. The gender equality authority will also receive 40 million kronor.

Also announced was 150 million kronor for disability allowance, available to people with disabilities who need to hire assistants for personal help, and an 11 million kronor boost for Sweden's anti-segregation agency.

Culture

The government has proposed that entry to Sweden's 18 state-run museums remains free, something which the conservative parties said they wanted to change in their autumn budget. This accounted for 60 million kronor.

READ ALSO: These are Sweden's 18 free-to-enter state museums

Meanwhile, 100 billion kronor was allocated to the expansion of broadband. And VAT on e-books and digital newspapers was reduced from 25 percent to six percent.

And the budget also included 50 million kronor in so-called incentive grants for cultural schools across the country. This is half of the amount allocated previously under the Social Democrats, but the right-wing budget had proposed scrapping these grants completely.

Extra money for security

Money was also allocated to Säpo, Sweden's security police, to strengthen their capability to investigate and prevent extremist crime.

“It is a commitment I really wish we didn't have to make, but we see that violent extremist environments have grown in recent years and terrorism has developed into a serious international problem,” commented Andersson.

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ECONOMY

Sweden facing ‘the highest inflation in 30 years’

Sweden last month saw the highest levels of inflation in more than 30 years, according to the latest figures from Statistics Sweden.

Sweden facing 'the highest inflation in 30 years'

Consumer prices rose 6.4 percent in April, the agency reported in its latest monthly figures, well ahead of the 6.1 percent rise predicted by analysts and up from 6.1 percent in March. 

“This shows high inflationary pressure. It’s in line with consensus, but it’s 0.2 percentage points higher than what the Riksbank has been predicting,” said Olle Holmgren, an economist with SEB. 

Rising prices of meat, vegetables and other groceries were the main reasons for the rise, with the prices of electricity and fuel falling month-on-month. If energy prices are excluded, inflation was 4.5 percent in April, up from 4.1 percent in March. 

“Restaurant prices are rise quite a bit for the second month in a row. That can be linked to grocery prices,” Holmgren said. “Then there are higher prices generally, but grocery prices are increasing rapidly.”

Holmgren predicted that the inflation rate could continue to rise in the coming months, increasing the risk that Sweden’s public bank, the Riksbank, will hike interest by 0.5 percentage points — two slots — in September. 

Fuel prices fell in April compared to March, although diesel remains 56.7 percent higher than a year ago and petrol 36 percent higher. 

The price coffee is higher now than at any time since it joined the consumer price index in 1983, after rising 29 percent so far this year. 

Other groceries which have risen significantly in price this year are cabbage and tomatoes, which rose in price by 43 percent ad 33 percent respectively. 

The price of avocado has fallen by 14 percent this year, while pickled herring has fallen in price by 16 percent. 

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