Budget Bill for 2023 – reforms to strengthen Sweden in challenging times

“Challenging times lie ahead,” says Minister for Finance Elisabeth Svantesson. “Sweden is expected to enter into recession in 2023, and inflation is putting pressure on households and businesses. We are facing an acute security crisis, increasingly serious crime and significant welfare needs. Sweden will tackle these challenges with a balanced and responsible fiscal policy and long-term measures.”

A stronger economy with more people in work

Households and businesses in Sweden are hard-pressed. The State neither can nor should compensate for all price increases, but households on tight budgets are particularly hard hit and will therefore be given priority.

Decommissioned electricity production plants in Sweden and the energy crisis in Europe have led to a sharp increase in electricity costs for households and businesses. The budget allocates funds for targeted support to electricity-intensive businesses for their electricity costs. In addition, temporary high-cost protection is set to support affected households and businesses through a difficult winter.

High fuel prices have unreasonable consequences for those who are dependent on petrol or diesel cars. The Government therefore proposes that the tax on petrol and diesel be reduced by the equivalent of one krona per litre at the pump as of next year. In addition, the temporary tax reduction on agricultural diesel will be extended, and there are plans to lower the reduction obligation to the EU’s minimum level as of 1 January 2024.

People on low incomes and tight budgets are hardest hit by price increases. The temporary extra allowance for families with children entitled to housing allowance will therefore be extended. Also, funds will be permanently allocated to keep the unemployment insurance benefit at the same high level as during the pandemic.

The Government is allocating funds for more places in regional vocational adult education programmes within the framework of municipal adult education, and for more apprenticeships. This is to enable more people to find work and support themselves, and to reduce the risk of entrenched high unemployment. The Government will give priority to reducing tax on labour during the electoral period. As a first step, the earned income tax credit for older people will be strengthened from next year.

The current travel deductions are a helpful support for long-distance commuters. The Government will therefore propose a substantially increased car mileage allowance within the existing travel deduction system.

Increased security and justice

The justice system is insufficiently able to combat increasingly serious crime in Sweden. The Government therefore proposes additional allocations to all agencies and authorities across the justice system. Investments will be made in the Swedish Police Authority and the Swedish Security Service. The Swedish Prison and Probation Service will be strengthened through increased funding for more detention and prison places.

To strengthen crime prevention, the Government proposes, for example, more parental support programmes, increased support to women’s and girls’ organisations and more investment in sport in socially disadvantaged areas. The Government will also provide funds for an extension of subsidies related to municipalities’ costs for the placement of children and young people.

Welfare we can rely on

Health care waiting times must be shortened, freedom of choice in health care safeguarded, and access to health care increased. The Government is therefore giving priority to new targeted investments in, for example, increased care capacity with more care places throughout the country, maternity care, women’s health and older people’s health, and to increased central government responsibility for health care, including through a national health referral centre.

To increase children’s physical activity, improve their physical fitness and reduce sedentary behaviour, it is proposed that a leisure-time card be introduced as financial support to children and young people, especially in socio-economically vulnerable households.

The Government also proposes that the general government grants to municipalities and regions be strengthened to reduce the risk of high prices leading to cutbacks, particularly in health care, education and social services, and to negative impacts on employment in the welfare sector.

Knowledge-based education will be restored. Teachers need better opportunities and more time to focus on teaching. Teachers should also be given more options and tools to respond to disruption in schools. Investments will therefore be made to increase the number of specialist teachers, strengthen catch-up school and improve access to new and high-quality teaching materials.

A stronger defence policy

The global security environment requires Sweden’s defence forces to be ready to protect Swedish territory. Sweden’s resilience needs to increase and military defence needs to be strengthened to enable us to better defend our country, our future allies and Swedish interests. For the same reason, a strong civil defence is essential. Funds will therefore be provided to strengthen both military and civil defence.

Ukraine’s ability to defend itself against Russia’s aggression is critical to Europe’s security. The Government intends to increase military support to Ukraine. Sweden’s increased military support to Ukraine should be based on supplying more advanced weapons systems, in accordance with Ukraine’s request.

An effective and ambitious energy and climate policy

Sweden will pursue an effective and ambitious energy, climate and environmental policy. The Government therefore proposes a number of measures to strengthen Sweden’s electricity production, including through investments in solar cells and through electricity and energy efficiency measures in single dwellings.

To increase the electrification of the transport sector, investments in charging infrastructure in Sweden are proposed, especially in sparsely populated and economically disadvantaged areas. The Government will also propose a temporary exemption for the taxable benefit for workplace charging of electric vehicles.

To achieve negative emissions, the Government will enable large-scale carbon capture using bio-CCS. To reduce emissions and combat environmental degradation, funds will be allocated to restore wetlands and improve marine and water environments.