Government presents Budget Bill for 2024
Today, the Government is presenting the Budget Bill for 2024 to the Riksdag. The proposals in the budget aim to address Sweden’s most acute problems. This includes combating inflation and managing its effects through assistance to households and the welfare system. Defence and the judicial system will also receive substantial investments to make Sweden safer and more secure. The reforms in the budget total SEK 39 billion next year. The budget is based on an agreement between the Government and the Sweden Democrats.
“Sweden remains in an economic winter and a difficult security environment. The Government is prioritising combating inflation and assisting households and the welfare system. At the same time, we are strengthening the judicial system and defence, and re-instituting the work-first principle. The economic situation is challenging, but Sweden has all the conditions to once again navigate its way through a difficult period,” says Minister for Finance Elisabeth Svantesson.
With the highest inflation in 30 years, a recession and a difficult security environment, Sweden is facing a challenging situation. Due to the high inflation, wage earners are seeing their real earnings decrease and the value of their savings diminished. At the same time, increased costs also affect the welfare system and businesses. Economic growth is expected to remain weak in 2024. Sweden is entering into recession with high unemployment in comparison with many other European countries.
The Government has set out the following long-term plan to get Sweden through the difficult economic situation.
Combat inflation and assist households and the welfare system
The Government has presented a restrained budget aimed at combating inflation. To avoid prices rising more than necessary and to assist those especially hard hit by rising prices, the Government proposes a number of measures. Tax on petrol, diesel and agricultural diesel will be reduced next year. The local government sector will receive funding totalling almost SEK 16 billion, and the increased housing allowance for economically disadvantaged families with children will be extended for six months.
Re-institute the work-first principle
The work-first principle will be re-instituted and integration improved in order to tackle the recession. To make it more worthwhile to work, the Government proposes a reduction on labour income that primarily benefits low- and middle-income earners. This stimulates the motivating factors that get people off benefits and into jobs. Tax on pensioners will be reduced, and the Government also intends to introduce an activity requirement for entitlement to income support.
Implement structural reforms to stimulate growth
To improve long-term growth and increase productivity in the economy, the Government wants to ease the administrative burden on businesses. For this reason, its proposals include funds for a simplification council and streamlining assignments to a number of government agencies. A secure and stable electricity supply is essential, not least for basic industries. The Government therefore proposes several measures for improved electricity supply, including credit guarantees for new nuclear power. To strengthen the skills supply for society and the business sector, the Government also proposes a specific investment in new engineers.
Reforms to build Sweden strong
Sweden is facing the pressure of a deteriorating security environment and a high level of crime. The Government therefore proposes extensive investments in defence and the judicial system. The budget includes investments in the Swedish Police and new funds to the Swedish Prison and Probation Service to increase capacity and the number of detention and prison places. The Swedish Security Service will also receive increased funding to manage the deteriorating security situation. Work to prepare Sweden’s defence for forthcoming NATO membership also continues.
The budget proposals also include targeted support to cancer care and women’s health, while ongoing initiatives to promote mental health and shorten waiting times will expand. Investments in schools are also proposed with the aim of sharpening the focus on knowledge development, combating grade inflation and reducing the space for underperforming schools. The Care of Older People Initiative will also be extended.
To reduce emissions and accelerate the green transition of industry and the transport sector, the Government proposes extended and increased funding for charging infrastructure so that more people choose to drive electric cars. The Government also proposes boosting the Climate Leap and Green Industry Leap climate investment initiatives.
In addition, the Government is intensifying efforts to rectify incorrect payments from welfare systems by establishing a new payments authority. The Government is also mobilising efforts against the criminal economy with increased appropriations to the Swedish Tax Agency, the Swedish Enforcement Authority and Swedish Customs.