Economic measures in 2020 in response to COVID-19
To mitigate the economic impacts of the COVID-19 pandemic, the Government has presented ten additional amending budgets to the Riksdag this year in addition to the spring and autumn amending budgets. The budgets contain a broad suite of measures in all sectors of the economy to protect people’s health, lives and livelihoods.
Measures that have been adopted to limit the spread of infection include compensation for the standard deduction for sick days, suspension of the medical certificate requirement during the sick pay period and increased funding for disbursement of the disease carrier’s allowance. In certain cases, people who belong to at-risk groups have been able to stay at home and receive a preventive sickness benefit for a limited period.
Central government has assumed responsibility for municipalities’ and regions’ extraordinary COVID-19-related costs, and the local government sector has also received general funds to offset falling tax revenues. Funding has also been allocated to enhance skills in care of older people, support public transport and increase testing and contact tracing.
To support viable businesses and reduce the number of jobs lost, measures have been adopted to reduce costs, reinforce liquidity and improve financing opportunities for businesses throughout the country. A new short-term layoff scheme and reorientation support have been introduced. Moreover, public venture capital has been strengthened to bridge the crisis for innovative businesses. Most of the measures have been of a general nature, but support targeting specific sectors – such as media, culture, sport, public transport, railways, aviation and shipping – has also been introduced.
Temporary changes have been made to unemployment insurance to increase financial security. In addition, transition opportunities have been enhanced through increased educational opportunities and improvements to student finance. Housing allowance has been raised for families with children. The Government has also increased support to non-profit organisations that support vulnerable children and women, children and LGBTI people subjected to violence, and people subjected to domestic violence, including honour-based violence and oppression.
The current assessment of central government’s direct costs for crisis measures in 2020 is almost SEK 200 billion, in addition to the capital-strengthening measures (which also affect the budget), in other words, a total of just over SEK 200 billion in measures affecting the budget. Furthermore, increased guarantees are worth SEK 250 billion and liquidity reinforcements may amount to SEK 335 billion.