Caretaker government presents Budget Bill for 2019

Because no new government has taken office, the caretaker government is presenting the Budget Bill for 2019 to the Riksdag today. A caretaker government has limited powers. The budget being presented is based on previous decisions by the Riksdag and leaves scope for adjustments when a new government is formed. The budget also contains a proposal, supported by broad consensus in the Riksdag, that cannot be implemented in the ongoing fiscal year. This is a proposal to reduce the difference in taxation between pensioners and wage earners that was previously circulated for comment.

“This is a scaled-down budget without party-political direction that provides good conditions for a new government to propose amendments based on its policy direction,” says Minister for Finance Magdalena Andersson.

Principled process

This is the first time a caretaker government has presented a Budget Bill. Work on the budget has been based on the principles that the government, following contact with the Moderate Party, the Centre Party, the Left Party, the Christian Democrats and the Liberal Party, considers that the Riksdag can accept.

The caretaker government has used the adopted budget for 2018 as the basis for its budget work. As a result, the vast majority of the announced changes for 2019 proposed by the government in the Budget Bill for 2018 are not included, such as the additional welfare billions for municipalities and county councils. A number of temporary initiatives will also be extended.

“This budget should not be considered a final product for 2019; a new government will want to set its stamp after taking office,” says Deputy Minister for Finance Per Bolund.

The principles established mean that adjustments have been made to appropriations in the current budget according to the following (compared with the levels that apply for 2018):

  • Appropriations used for administrative and investment purposes will be recalculated as regards prices and wages in the usual manner. Appropriations regarding rule-governed transfer systems will be adjusted on the basis of macroeconomic developments and altered volumes (e.g. the number of people covered).
  • Appropriations will be adjusted as a result of adopted acts and ordinances, international agreements, agreements binding under civil law or EU legal instruments.
  • Appropriations will be adjusted if the Riksdag decides to move purposes and activities between expenditure areas.
  • Appropriations will be adjusted if this is necessary to maintain vital societal functions.
  • To ensure that activities based on an authorisation to place orders for the coming year are given the conditions to operate at the same level in 2019–2021, the appropriation levels for all years will be adjusted with regard to the level of expected realisation of the economic commitments for 2019.
  • Legislative proposals that are politically uncontroversial and that cannot be implemented in the ongoing fiscal year will be included where there is political consensus on them.

Corresponding principles for proposals concerning central government revenue have been taken into account where appropriate.

Growth slightly above average and labour market stable

Following relatively high growth in 2018, GDP is expected to grow at a slower rate next year. Unemployment is expected to land at 6.4 per cent in 2018 and remain unchanged in 2019. The forecasts are less relevant for the fiscal year than usual, as a new government may present a more comprehensive amending budget for 2019 than is normally the case.

Public finances in line with surplus target

The Riksdag has established that the level of the surplus target is to amount to a third of a per cent of GDP on average over a business cycle from next year. In the Budget Bill, the government considers that structural net lending in 2019 is compatible with the new level for the surplus target.

Contact

Gösta Brunnander
Press Secretary to Minister for Finance Magdalena Andersson
Phone (switchboard) +46 8 405 10 00
Mobile +46 (0)72-544 28 66
email to Gösta Brunnander, via senior registry clerk
Isabel Lundin
Press Secretary to Minister for Finance Magdalena Andersson
Phone (switchboard) +46 8 405 10 00
Mobile +46 (0)76-296 46 38
email to Isabel Lundin, via senior registry clerk
Fredrika Lindsjö Hermelin
Head of Communications, Ministry of Finance
Phone + 46 8 405 16 19
email to Fredrika Lindsjö Hermelin, via senior registry clerk