The budget process and the fiscal policy framework
Below you can read about the central government budget process, the fiscal policy framework and how policy objectives and ideas are put into action through the Government’s various budget proposals.
Twice a year, Sweden’s Minister for Finance submits proposals for Sweden’s economic policy and central government budget to the Riksdag. In the spring, the Minister for Finance submits the Government’s Spring Fiscal Policy Bill and a spring amending budget. In the autumn, the more comprehensive Budget Bill and an autumn amending budget are submitted.
How are these various components connected? How are the proposals prepared? What are the frameworks and rules? And who decides on the proposals? This is an introduction to the connections between policy objectives and ideas and the final decisions on central government expenditure and revenue.
From policy objectives and ideas to central government budget proposals
An important part of the Government’s work in putting its policies into action is drawing up a proposal on the central government budget. The starting point of this work is the economic policy objectives the Government wants to achieve. Fiscal policy – i.e. proposals for government expenditure and revenue – is the Government’s tool for putting these objectives into action.
The entire Government Offices works on the budget
Before the Government submits its budget proposal to the Riksdag, many analyses and estimates must be produced as the basis for the Government’s considerations and decisions. This work is led and coordinated by the Ministry of Finance, but all ministries take part and provide background material within their areas of responsibility. There are also frameworks and rules concerning how fiscal policy can be designed, and how the budget process should proceed. These frameworks and rules are known as the fiscal policy framework.
Spring Fiscal Policy Bill
The Spring Fiscal Policy Bill contains draft guidelines for economic and budget policy, an assessment of the economic outlook, a presentation of the challenges these policies face, and follow-ups of the Government’s policies. The contents of the Spring Fiscal Policy Bill thus provide a starting point and platform for the work on the autumn Budget Bill.
In the Budget Bill, submitted in the autumn, the Government presents its overall proposals for allocating central government expenditure between different activities, and its estimate of expected revenue. The Budget Bill also contains a budget statement, describing the Government’s fiscal policy.
The Government can also submit proposals for amendments to the central government budget during a fiscal year. These proposals are collected in ‘amending budgets’. An amending budget is submitted in the spring, in connection with the Spring Fiscal Policy Bill (spring amending budget), and in the autumn, in connection with the Budget Bill (autumn amending budget).
The Riksdag decides on the central government budget
When the Budget Bill has been submitted to the Riksdag, the Riksdag begins processing the proposal. The Riksdag considers and decides first on the economic frameworks for all activities (expenditure areas) in its ‘framework decision’. The Riksdag subsequently reviews and decides on the draft budget’s details for each expenditure area.
The Government implements the Riksdag’s decision
When the Riksdag’s processing is complete, the Government is responsible for implementing the Riksdag’s decision, i.e. ensuring that all government agencies receive the money the Riksdag has decided on for their different activities.