The group, called the Reformists (Reformisterna) has put forward its own left-wing reform programme in its first annual meeting, held in Stockholm over the weekend.
Its aim is to put pressure on Social Democrat leader Stefan Löfven and the party leadership to pursue a more left-wing agenda.
"Our programme and our suggestions are formed from the growing worry and frustration over the widespread inequality in society. And [the fact] that the policies of our party, the Social Democrats, are insufficient to meet society's major challenges," the group said.
Among its proposals were an increased pension for those with low incomes, higher goals for creation of new homes, a reduction of the working week to 35 hours, and increased capital gains tax.
This would be financed through public and private investments, with around 3,600 billion kronor taken out as a loan, and the remainder and 400 billion covered by the state budget, according to Suhonen.
"We should increase the central government debt at an orderly pace for the necessary investments. Just like when a family takes out a loan to buy a house," he said.
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He described the group's agenda as "classic Social Democratic reform policy" and said that he hoped that the party would enter the 2022 election campaign with a manifesto closer to the Reformisterna's proposals than the current government policy.
The party's result in the September 2018 election was its worst in over a century, and the ensuing political deadlock lasted for months until Social Democrat leader Stefan Löfven signed an agreement with the Centre and Liberal parties in January.
That deal allowed the party to govern together with the Green Party, in exchange for Centre and Liberal influence on many policies.
But the Reformists was not created as a direct response to the so-called 'January deal', board member Daniel Suhonen told the TT newswire.
"It might look like that, but the main features of this programme were ready back in autumn," Suhonen said.
He said the new group already had 130 members, including at least two current MPs as well as former ministers and politicians at the municipal level.
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