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BUDGET

Swedish finance minister unveils ‘historic’ coronavirus budget bill

Swedish Finance Minister Magdalena Andersson presented the government's budget proposal – 105 billion kronor's worth of investment to help the economy out of the pandemic – to parliament today.

Swedish finance minister unveils 'historic' coronavirus budget bill
Swedish Finance Minister Magdalena Andersson at a press conference earlier in September. Photo: Henrik Montgomery/TT

Andersson has previously described the budget as “historic in its scope”.

It contains investments of 105 billion kronor ($12 billion) for 2021 and 85 billion kronor for 2022, designed to help recover ground that was lost during the coronavirus crisis, create jobs and boost Swedish welfare.

“The proposals in the budget bill are expected to stimulate growth and employment sharply in the coming years,” wrote Social Democrat Finance Minister Andersson and her deputy, the Green Party's Finance Market Minister Per Bolund, in an opinion piece in the Dagens Nyheter newspaper on Monday morning.

Some of the announcements have already been trickling out in the run-up to Andersson's budget presentation, and one new measure announced today is keeping the new cap on unemployment insurance (a-kassa), which was raised to 510 or 1,200 kronor a day amid mass layoffs in spring, in place for another two years.

Four parties have been involved in working out the budget proposal: the ruling centre-left Social Democrat-Green coalition and the centre-right Liberal and Centre parties.

These parties had already agreed on a series of future measures set out in the so-called January Agreement in 2019, which enabled the Social Democrats and Greens to take office with the support of the latter two, and which means the budget bill contains a range of proposals from each party.

For example, it means tax cuts on income are proposed in the budget, which the centre-liberal wing of the collaboration argues will stimulate the economy and help boost jobs in the wake of the pandemic.

And it also means investment in traditional welfare measures, such as education, elderly care and healthcare – some of the Social Democrats' favoured issues, and which include areas left bleeding by the coronavirus crisis – and billions allocated to measures for the climate, pushed through partly by the Green Party.

Sweden's GDP took a historic drop this year, falling by 8.3 percent in the second quarter compared to the first quarter (7.7 percent year-on-year when adjusted for seasonal effects) – an even bigger single-quarter drop than during Sweden's financial crisis in the 1990s and the global financial crisis in 2008.

The country's economy was in a fairly healthy state prior to the pandemic, and it is already showing signs of recovery. Financially, Sweden has weathered the pandemic better than many countries, which may also be partly to due with the fact that some of the industries hit the hardest in almost any country including Sweden – hotels and restaurants – are comparatively less crucial to the Swedish economy than to, say, Italy or Spain.

But Sweden is still going through one of its worst economic crises in decades, with high unemployment, and the state will have to borrow for some of the budget investments.

Some of the measures in the bill are temporary and will be removed in one or two years, others are permanent.

The Local will publish a full explanation of what the budget bill means for international residents shortly.

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ENERGY

EXPLAINED: When should I turn on my heating in Sweden this year?

Energy costs in Sweden are set to reach sky-high levels this winter, which will leave many people wondering when they should start heating their homes. Here's what you need to bear in mind.

EXPLAINED: When should I turn on my heating in Sweden this year?

What’s happening?

As a result of supply stoppages for cheap Russian gas affecting energy prices on the European market – particularly in Germany – energy prices in Sweden have been at record levels for months, especially in the two energy price zones in the south of the country.

With winter looming and no sign of things getting cheaper anytime soon, private individuals are starting to cut down on energy usage as much as they can to slash their bills this season.

Does it make a difference what type of accommodation I live in?

The right time to start heating your home depends on several factors including your own personal preference, the weather, whether you live in rented accommodation or own your own property, and on the age and features of the property you live in.

How does the heating system work in Swedish homes?

More than half of all houses and commercial properties in Sweden use district heating or fjärrvärme, with this number rising to around 90 percent for apartment buildings.

This system distributes hot water from heating plants to houses and apartments through underground water pipes, meaning that heating sources are centralised, rather than individual houses or apartments having their own heating source.

In smaller towns and in houses, district heating is less common, and it’s these households who can benefit the most from waiting longer to turn on their heating.

Do I control my heating?

It depends. If you live in a rented apartment or a bostadsrättsforening (co-operative housing association) with district heating, your landlord or the board of your housing foundation will usually decide for you when to turn your heating on.

Unlike other countries, Sweden has no official legal heating season, with heating in bostadsrättsföreningar usually switched on automatically following periods of cold weather, no matter which date they occur on.

This will usually be designed to provide an indoor temperature of around 21 degrees – you can turn your radiators down if you feel this is too warm, but you won’t usually be able to turn them up if you want the temperature to be warmer.

The Public Health Agency recommends temperatures of between 20 and 24 degrees indoors, with temperatures lower than 18 degrees in apartments posing a health risk.

Temperatures lower than 14 are not recommended as they can cause condensation and mould growth on walls and furnishings, which, again, are a health risk, and can cause permanent damage to properties.

Can I save money by waiting to turn my heating on?

Again, it depends. If you’re renting and you pay varmhyra – rent with heating included – then you won’t save money directly, but heating your home wisely could make it less likely for your landlord to raise your rent to cover increased heating costs.

If you pay kallhyra – rent without heating included, then waiting to turn on the heating will save money on your electricity bill.

Similarly, in some housing associations, electricity and heating costs are included in your monthly fee, meaning you pay your share of the heating costs for the entire building ever month. In this case, your energy costs are more affected by how much energy everyone else in your housing association uses than your individual usage.

On the other hand, this doesn’t mean you shouldn’t care about how warm your heating is – if you have your heating on full-blast for the whole winter, your costs will increase as well as the costs of all of your neighbours, and if the entire association’s energy costs increase substantially, the board may decide to raise the monthly fee or avgift for everyone in the building to cover this.

If you pay an individual energy bill based on your own household’s usage, and not on an average of the whole building, it could pay to wait before you switch on your heating.

How else can I save money on heating costs?

Turning your heating down a couple of degrees can make a big difference to your heating costs, but you can also save money on heating and make your property feel warmer by making it more energy effective.

There are a few easy ways to do this, according to the Swedish Energy Agency.

Firstly, make sure your house is well insulated, not just your doors and windows, but also in the loft: a large amount of a building’s heat escapes through the roof. This also applies to the boundaries between well-insulated and poorly-insulated areas.

If you have a cellar or conservatory, for example, which is not heated and not insulated, make sure the door between this room and the rest of the house is well-insulated with no gaps around the doorframe where heat can escape into the colder room. 

In a similar vein, locate any drafts and do what you can to block them, either with draft excluders or by replacing worn-out draft excluder strips on old doors and windows.

You can also benefit from thinking about how you furnish your home – furniture placed in front of radiators mean it is harder for warm air to circulate, and you can keep your house warmer at night by closing your curtains or blinds to keep eat from escaping through your windows.

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