The Budget Bill for 2014 in 5 minutes
Anders Borg, Minister for Finance
18 September 2013
20 September 2012
Minister Dr Wolfgang Schäuble and Minister Anders Borg
7 September 2012
Economic outlook for Sweden and the public finances
The Swedish economy has clearly been affected by the global recession over the past year. Growth has slowed again and is expected to remain low this year but then gradually pick up. Unemployment is not expected to show clear signs of falling until the end of 2015. But there is still a great deal of uncertainty about how the economy will perform and a risk that performance will be weaker than forecast.
As a result of the protracted economic downturn, the public finances are expected to show a deficit in both 2013 and 2014. The stronger economic outlook for the following years means that net lending is expected to strengthen gradually to show a surplus of 1.1 per cent in 2017. Based on how the economy and public finances are expected to perform, the Government estimates that there is fiscal space of more than SEK 24 billion in 2014.
Measures in brief
In the Budget Bill for 2014, the Government proposes measures to support growth and permanently increase employment, strengthen pupils' knowledge and skills and business competitiveness, and enhance welfare and cohesion in Sweden while protecting the environment and climate.
Supporting growth and permanently increasing employment
- Strengthened household finances through an increase in the earned income tax credit, a raised threshold for state income tax and lower tax for pensioners
- New and broader paths to working life for young people through support to vocational introduction jobs, investments in apprenticeship and vocational programmes as well as reduced social security contributions for the youngest category and more effective labour market policy measures
- Better conditions for long-term unemployed people to find work through, for example, additional investments in the special recruitment incentive
- Better integration through more measures to facilitate the introduction of newly arrived immigrants, more hours of Swedish instruction for newly arrived pupils in years 1-5, better opportunities for supplementary courses for immigrants with tertiary qualifications and the introduction of new start zones
- A more flexible and secure labour market through state support for short-time employment and measures to improve labour market flexibility
- Better opportunities to follow up jobseeking activities and clearer requirements for those taking part in labour market policy programmes and for others.
Increasing knowledge and strengthening competitiveness
- Focus on knowledge in schools including through more hours of instruction in mathematics, homework support and measures to enhance teachers' skills and career opportunities
- Stimulus to research, innovation and entrepreneurship including tax incentives for R&D, equivalent tax conditions for business and entrepreneurship and reduced administrative burdens
- More efficient housing market through simpler planning processes and regulations for production of new rental housing.
Improving welfare and cohesion
- Increased support to the most financially vulnerable groups through an increase in the special allowance for children in the housing allowance, a higher income threshold for the housing supplement for pensioners and the introduction of a recreational activity allowance for children
- Increased quality, effectiveness and efficiency in health care and social services through a multi-year initiative for people suffering from chronic illnesses, more places in health care education programmes and better alcohol rehabilitation programmes
- Developed pricing model for pharmaceutical products to ensure that Sweden does not pay more for pharmaceuticals than other comparable countries
- Higher alcohol tax.
Protecting the environmental and climate
- Environment and climate measures including increased focus on chemicals issues, continued reduced taxable benefit rate for certain green cars and reduced energy tax on lead-free aviation fuel
- Quota obligation and biofuels tax
Central government budget for 2014 - income and expenditure
Estimated income for budget year 2014
Central government income mainly consists of state taxes on labour, capital and consumption. Part of central government income also comes from loan repayments (e.g. student loans) and grants from the EU. The table below shows the expected central government income levels for 2014.
The Government's proposals for central government expenditure for budget year 2014
The central government budget is divided into 27 areas known as expenditure areas. Each expenditure area shows how much money different state-controlled activities may use, for example police activities or state universities. The table below shows the Government's proposals for how the money is to be distributed between the various activities.
Central government finances are expected to a show a deficit of SEK 44.7 billion in 2014.
Government proposal for central government budget 2014
Estimated central government income for 2014
824 219 318
Total proposed central government expenditure for 2014
868 914 799
Central government budget balance for 2014
- 44 695 481
At the beginning of 2014 the national debt is expected to amount to SEK 1 266 billion. The estimated borrowing requirement for 2014 is SEK 44.7 billion.
When the Government has submitted its budget proposals to the Riksdag, the Riksdag has to take a position and decide on the contents of the Budget Bill. This is a two-stage process:
First, the Riksdag adopts the guidelines for economic policy and the economic framework of the central government budget. The decision on the economic framework - known as expenditure frameworks - is decisive for the further process in the Riksdag as the expenditure frameworks cannot be exceeded.
In the second stage, the Riksdag takes a position on how to divide up expenditure in each individual expenditure area, in other words how much money different activities will receive. Processing of the Budget Bill is completed when the Riksdag has taken a position on the proposals in all 27 expenditure areas. This is when the Riksdag takes a final decision setting the central government budget.