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Budget Bill for 2020: Reforms for a stronger society
Today the Government presents the Budget Bill for 2020 to the Riksdag. The Government is proposing measures to increase the number of jobs, tackle the challenge of climate change, safeguard welfare throughout the country and address crime and its causes. The proposals in the Bill are based on the January Agreement, the policy agreement between the Social Democratic Party, the Centre Party, the Liberal Party and the Green Party.
“The problems we have in Sweden today can only be resolved if we take greater joint responsibility for our security and cohesion. In this budget we are taking new initiatives to get more people into work, to strengthen welfare throughout Sweden, to improve pensioners’ finances, to improve the environment and to attain an ambitious climate transition that everyone, in the whole of Sweden, can be a part of. We are substantially increasing resources to improve security and safety,” says Minister for Finance Magdalena Andersson.
Slowdown in the economy – but Sweden is well-equipped
After several years of high growth, there is now a slowdown in the world economy and in Sweden, although resource utilisation in the Swedish economy is still higher than normal. At the same time, several of the risks highlighted by the Government in recent years have increased – for instance, the trade conflict between the United States and China, and the United Kingdom’s withdrawal from the EU.
“The Swedish economy is well equipped to address the uncertainties at home and abroad. Our public finances show a surplus, the central government debt-to-GDP ratio is the lowest since the late 1970s and unemployment has fallen. We have conducted a responsible fiscal policy so that Sweden can meet the slowdown with well-balanced reforms,” says Ms Andersson.
More people in work
Work is the most important condition for being able to earn a living and become established in society, and for financing joint welfare. The Budget Bill for 2020 therefore contains proposals for measures to ensure more people have jobs to go to. The Government proposes that resources should be allocated to extra jobs, introductory jobs and employment training, and that a labour market entry deduction should be introduced. The Swedish Public Employment Service is to be reformed with a new system, where independent actors match job seekers with job vacancies. The Government also intends to introduce entry agreements to stimulate jobs for new arrivals and long-term unemployed. To promote a high level of employment, measures are also being proposed for an active industrial policy, for instance, by further developing the existing export strategy.
Sweden is to be a fossil-free pioneer
Sweden is to take the lead and show that a fossil-free world is possible. The overall goal of environmental policy is to pass on to the next generation a society in which the major environmental problems have been solved without increasing environmental and health problems beyond Sweden’s borders. Climate change will be addressed with an ambitious transition in which the entire country can take part. The Budget Bill for 2020 therefore proposes further reinforcement and streamlining measures of the Climate Leap and the Green Industry Leap, measures for the protection of valuable natural environments, measures for clean seas and water, and solar cell subsidies. The Government is also proposing that an ‘electrification commission’ be appointed to speed up the work on electrification of the heavy road freight and the transport system as a whole.
Strengthened welfare system
Sweden is to be a modern welfare nation. A high level of employment, universal welfare systems and good order in public finances form the foundation for the Swedish social model. It is a positive development that more people in Sweden are living longer, but this also requires extensive resources in the coming years to maintain a high level of quality in welfare. Reinforcement of general allowances to the municipal sector is continuing at a steady pace.
Access to health and medical care will be improved and waiting lists shortened. All those who have worked and paid tax in Sweden during their whole professional life should be able to look forward to a secure old age. All schools must be good schools with a focus on knowledge and a peaceful study environment.
To strengthen welfare, the Government is proposing, among other measures, improved opportunities for further education/training for nurses, further measures in child and adolescent psychiatry, and measures for children and young people with mental health problems, improved basic protection for pensioners, more teaching assistants, and reinforced support for equal schooling.
Growth throughout the country
The whole of Sweden will not only live, but also grow. Rural and sparsely populated areas, as well as small and large urban areas must be developed so that the whole of Sweden’s potential is used. Possibilities to live and work throughout the country will be improved. In the Budget Bill for 2020 the Government is therefore proposing measures for the maintenance of roads and railways, and further funding to facilitate and increase the pace of broadband expansion, a farming package to strengthen the competitiveness of the food industry, a more effective and appropriate investment subsidy for housing, and more service offices. In addition, the national forest programme will be further developed to promote growth in the forest industry and sustainable forestry. The Government also intends to propose a tax deduction aimed at people living in certain sparsely populated municipalities.
Security is to increase and democracy to be safeguarded
The fight against crime and its causes will be intensified. Society must be strong enough to protect people from everything from petty crime to terrorism. This is key to holding society together. An increase in defence capabilities is required to enhance security in Sweden and stability in our neighbourhood. Democracy must be safeguarded, both in Sweden and abroad.
The Government is proposing in its Budget Bill for 2020 measures to increase security and safeguard democracy. In addition to the reinforcements already decided for the coming years, the judicial system will be allocated further resources to tackle serious and organised crime. The Police, the Swedish Security Service, the Swedish Prosecution Authority and the Swedish Customs will be reinforced. In addition, a broad investment is proposed to combat crime against welfare systems. On top of this, there are proposals for continued investments to combat men’s violence against women, and honour-related violence and oppression. The Government has also announced increased funding in 2022 for a stronger military defence.
Tax amendments for jobs and sustainable growth
Tax policy is to ensure stable tax revenues and create the conditions for sustainable growth and high employment. The proposed tax changes aim to contribute to higher employment, an increased number of hours worked and to attaining climate and environmental goals. This is at the same time as securing funding for welfare services.
Tax changes in the budget:
- The upper bracket for central government income tax (‘austerity tax’) is abolished
- Tax for people over 65 will be cut
- A requirement for electronic payment introduced regarding tax rebate for domestic and home renovation services
- A tax reduction should be introduced for residents in certain sparsely populated areas
- Funds for further tax reductions on employment and enterprise within the scope of the green tax shift is allocated for 2021
- A financial definition of ‘worker’ should be introduced
- A labour market entry deduction should be introduced
- A reinforced deduction for research and development should be introduced
- The ceiling for deferred capital gains when selling a home should be raised
- A tax on the financial sector should be introduced from 2022
- A tax on waste incineration should be introduced
- The fuel tax should be reduced
- A tax on plastic carrier bags should be introduced