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The Government presents the 2021 Spring Fiscal Policy Bill
Today the Government presents the guidelines for economic policy and the Spring Amending Budget with further measures to limit the spread of the virus and alleviate the consequences of the pandemic for the economy and also to work Sweden out of the crisis. The proposals presented in connection with the Spring Fiscal Policy Bill total almost SEK 45 billion. The proposals are based on an agreement between the government parties, the Centre Party and the Liberal Party.
The Government has taken a large number of measures since the outbreak of the pandemic. The measures are intended to provide increased security for those hit during the crisis and to safeguard people’s lives and health and livelihoods. The aggregate expenditure for the measures taken since the spread of the infection began is estimated at more than SEK 400 billion.
Working Sweden out of the crisis for a better and more sustainable society
Further reforms are required to solve the societal problems that Sweden already had before the pandemic. The powerful green economic restart must continue. The Government therefore proposes further measures to work Sweden out of the crisis and build a better and more sustainable Sweden than before the pandemic.
Limit the spread of infection and carry out vaccination
Rapid and safe vaccination is of fundamental importance for bringing Sweden out of the pandemic. At the same time, work to limit the spread of infection and care for the sick must continue. The Government has therefore proposed allocating a further SEK 1.7 billion to vaccine purchases and vaccination and giving the regions a further SEK 2 billion to cover health care costs of deferred care and of care for patients with COVID-19. To meet the need for continued large-scale testing and tracing, the Government has proposed additional funding of SEK 1.65 billion.
The Government is also extending several of the temporary measures, including compensation for the sick pay standard deduction, the exemption from the requirement of a doctor’s certificate and forms of compensation to risk groups.
Measures to alleviate the consequences of the pandemic
The pandemic has caused serious consequences for the whole of society. The extensive support measures have alleviated the consequences for many, but more must be done. To continue to support viable companies and increase security for employees, the Government has proposed or is proposing a further extension of several of the temporary measures to reduce costs, turnover-based support, strengthen liquidity and improve access to financing.
The culture sector and sports movement have also suffered negative impacts. The Government has therefore proposed extending crisis support for culture and sports and introducing an event guarantee.
Cancellations of leisure activities and long periods of distance teaching risk having negative effects on children and young people. Schools should therefore be provided with funds for measures such as holiday school to reduce the risk of a negative impact on children’s knowledge development. The Government also proposes allocating funding to municipalities to create more summer jobs for young people as well as holiday activities for children and young people.
Continued green economic restart
A green recovery will be implemented with investments that reduce climate emissions and create jobs; here Sweden is taking a leading role in the climate transition. The Government therefore proposes allocating additional funding to reinforce environmental compensation for goods transport by rail. The regions also receive funding to maintain capacity in public transport. To limit society’s vulnerability as a result of climate change, funding is provided for knowledge-enhancing and preventive measures.
To get more people into work, there is a broad expansion of places in education and training at the same time as funding is proposed for more summer courses at universities and other higher education institutions. The Government also proposes targeted education and training action for groups with a vulnerable situation in the labour market and more introduction jobs and matching services. To enable more jobseekers with disabilities find work or start studies, the Government proposes reinforcing employment preparation activities.
Sweden to be a secure country for everyone
Crime and the causes of crime will be combated. Serious crime hits the whole of society and has a particularly hard impact on people living in socially vulnerable areas. To intensify action against serious crime, the Government proposes expanding previous reinforcements of the judicial system by providing new additional funding for agencies in the judicial system. The Government also proposes funding to strengthen work to prevent reoffending.
The pandemic has worsened the situation of women, children and LGBTQI people who are victims of violence or honour-related violence and oppression in close relationships. Now preventive work to address men’s violence against women and support for young people who are vulnerable in their relationships are being reinforced. To alleviate mental ill health among children and young people and increase support for victims of violence and others particularly vulnerable, the government grants to civil society organisations are being reinforced.
Economic upturn in 2021 after decrease in activity
Economic activity is expected to decrease slightly in early 2021 and to then increase gradually. Both the fiscal policy and monetary policy measures taken contribute to the recovery. Sweden’s GDP is expected to increase by 3.2 and 3.8 per cent in 2021 and 2022. The Swedish economy is expected to remain in recession during the period. The recovery in the labour market is also expected to pause at the beginning of the year and to then pick up again. The employment rate is expected to increase and unemployment to decrease slightly in the second half of 2021. However, unemployment risks being higher at the end of 2022 than it was before the pandemic.
Public finances weakened substantially in 2020 and are expected to weaken further in 2021. From 2022, public finances will be strengthened as the economy recovers. A responsible fiscal policy contributed to good public finances before the pandemic. Sweden therefore is well equipped to manage the recession.