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EXPLAINED: What Sweden’s 2021 spring budget means for you

Sweden has presented its 2021 spring budget, designed to help the country recover when the coronavirus crisis ends. Here's The Local's round-up of some of the key proposals and how they may affect you.

EXPLAINED: What Sweden's 2021 spring budget means for you
The Swedish government has presented the spring budget for this year. Photo: Fredrik Sandberg/TT

What’s the spring budget?

The spring amendment budget (vårändringsbudgeten) is usually mainly used to tweak or add bits and pieces to Sweden’s main annual budget, which is presented in autumn.

In pandemic times, the government has had to make more continuous investments than they usually do, to support businesses, vaccinations and the healthcare sector. So in a way, the 2021 spring budget is just one in a series of several amendment budgets in 2021 (the government presented its sixth amendment budget for 2021 only last week). And in another way, paradoxically, it is far more significant than Sweden’s usual spring budgets.

The budget proposal has been worked out by the governing Social Democrat-Green coalition in collaboration with the Liberal and Centre parties. That means it has majority support, and is expected to go through without a hitch when put to parliament.

In total, Finance Minister Magdalena Andersson on Thursday presented proposals to the tune of almost 45 billion kronor (approximately $5.3 billion) – made up of a separate amendment budget as well as 22 billion kronor which are part of the spring budget.

Here’s how those proposals may affect you:

Spending on healthcare

The budget comes amid a rise in newly reported cases and intensive care admissions for Covid-19, with Sweden one of the European countries worst hit by a third wave of the virus.

Unsurprisingly, as The Local wrote in this article, a large chunk of the money will go directly to the healthcare sector. This includes 1.65 billion for testing and contact tracing work, one billion for buying more vaccine doses and 700 million to Sweden’s 21 regions to help them carry out vaccinations.

An injection of two billion kronor will not only support healthcare directly related to Covid-19 but also other care that has been postponed due to the pandemic.

“Money cannot, must not, will not be an obstacle in limiting the spread of infection or in caring for the sick,” Finance Minister Magdalena Andersson told journalists.

Extending crisis support for businesses

Several of the Covid-19 support measures put in place earlier will be extended, for example rent support for businesses and lower employer contributions for young employees.

The government will also continue to cover sick pay for the first day of sickness (which is usually unpaid in Sweden due to a ‘waiting period deduction’), a measure which had been set to expire at the end of the month and will now last until June 30th. Compensation for people in Covid-19 risk groups who cannot work due to the pandemic was also extended until the end of June. 

Since the start of the pandemic, the government has spent 420 billion kronor on crisis measures, which Andersson called an “astronomical sum” but said it was possible due to savings made “during the good years.”

Education and 1.8 billion kronor ‘job package’

As well as extending crisis support for businesses, one of the biggest new announcements on Thursday was a “job package” amounting to 1.8 billion kronor.

That includes 180 million for municipalities to fund 15,000 additional summer jobs for young people, some of which should be aimed specifically at young people from a socio-economically vulnerable background.

It also includes money to fund 6,000 summer courses at Swedish universities, 448 million kronor for job-matching programmes and other services targeting the long-term unemployed, and 779 million kronor for vocational training programmes combined with Swedish language courses.

What’s Sweden’s current financial situation?

Between April and June last year, Sweden saw its biggest quarterly drop in GDP (8.6 percent) in 40 years, and recovery stagnated in late 2020 as the second wave of Covid-19 hit Sweden hard. Even though the current third wave has already surpassed the second, the government predicts that GDP growth will reach 3.2 percent for 2021, increasing further to 3.8 percent in 2021.

That’s more optimistic than the previous forecasts, released in late 2020, where the respective figures were 3.0 and 3.7 percent. It is also slightly different from the forecasts given by the Central Bank in February, where the figures were 3.0 and 3.9 percent.

“It is our judgement that by the end of this year, we will be back at the GDP level we had before the crisis,” said Andersson earlier this week.

But economists at major Swedish banks believe the government is too cautious in its prognosis. “The 3.2 percent for 2021 is quite a lot too low according to our assessment,” Annika Winsth, head economist at Nordea bank, told the TT newswire at the time.

The worst crisis facing Sweden at the moment is however not GDP, but unemployment, which is expected to land at 8.7 percent this year and 7.9 percent – with young people, foreign-born job-seekers and those without secondary education expected to be hit the hardest.

Sweden will soon reach 200,000 people who have been without a job for a year, unless current trends are halted.

What do other parties think of the budget?

The Left Party’s leader Nooshi Dadgostar criticised the government for not doing enough to stem high unemployment. “We can tell from this budget that we have a government that has accepted mass unemployment. They aim for around seven, eight percent unemployment and are fairly content with that,” she told a press conference.

She also called for more long-term support for healthcare, social care and education, rather than temporary measures, and more investments in a climate-friendlier future.

On the other side of the political aisle, the conservative Moderates’ economy spokesperson Elisabeth Svantesson thought the government’s job package missed the target.

“They talk about jobs, but don’t have a policy for getting more people into work. We need a cap on benefits so that it pays to go to work instead of staying at home, and increased demands on learning Swedish when you come to Sweden, and qualifying for welfare through work,” she told the TT news agency.

She did not comment on the investments in healthcare, saying that time would tell whether the government’s measures would turn out to be sufficient.

Member comments

  1. Sweden has a very serious issue with youth unemployment. They need to invest in this segment to provide cheap to free training for sectors which have a high demand such as coding. Also, create a skilled internship program and incentivise companies with lower taxes for the first 2 years if recruiting unemployed.

    In terms of welfare payments, yes there are some who try to take advantage but my wife who is a Doctor is often challenged on her medical decisions by försäkringskassan. So there is an illusion that most unemployed are happy to sit on their backsides. It’s not possible except in a few situations.

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SWEDEN ELECTS

Sweden Elects: I’ve got election pork coming out my ears this week

The Local's editor Emma Löfgren rounds up this week's key talking points of the Swedish election campaign.

Sweden Elects: I've got election pork coming out my ears this week

There’s an old Swedish Word of the Day in The Local’s archives: valfläsk (literally “election pork”, or pork barrel politics).

This week, there’s been enough of it to feed a Swedish town large enough for both a Biltema and a Dressmann store and still have half the pig left!

You could say it started the week before last, when the Social Democrats’ Immigration Minister Anders Ygeman floated a test balloon loaded with a 50-percent cap on non-Nordic residents in troubled neighbourhoods (it went down among the other parties like it was made out of lead).

Then last week, the Liberals threw their hat in the ring by proposing mandatory language assessments for two-year-olds who don’t attend preschool, and then make preschool mandatory for the toddlers whose Swedish isn’t deemed good enough. This, they said, was meant to help integration in areas where bilingual children don’t speak Swedish at home.

“Studies show that early preschool benefits children whose mothers are low-educated and whose parents are born abroad,” their manifesto read.

Liberal leader Johan Pehrson’s statement that in the most extreme cases – where parents clearly refuse to let their children learn Swedish – led to a social media storm that conjured up images of crying toddlers being taken into care for failing to distinguish between en and ett when quizzed.

For any parents of multilingual children (who know better than most how language works in early childhood – I’m raising a multilingual baby myself, but I’ve only just started so if you have any tips, do let me know!), I should stress that the proposal is less extreme than how it was first presented.

This is typical for valfläsk, by the way. Take something that’s perfectly obvious and hard to argue against (of course mixed neighbourhoods and children being encouraged to learn languages are generally good things) but dial it up a notch, insert something immigration-related, promise to get tough on whatever it is you want to get tough on, and propose either something that already exists or would be near-impossible to implement.

Then the Stockholm branch of the conservative Moderates proposed that entire school classes in vulnerable areas should be screened for ADHD through optional rapid tests, in order to increase the comparably lower rate of medication among foreign-born children and prevent them from falling into a life of crime.

“Detached from reality,” said their Social Democrat rival and pointed out that the partly Moderate-run region was planning to cut the number of psychiatric care clinics for young people.

The Christian Democrats, never ones to be outdone, wanted to chemically castrate sex offenders, give police access to healthcare biobanks, and let police take DNA samples from people stopped in internal border checks.

But while many of the election pledges that get tossed around this close to the election (less than a month to go, now!) tend to range from the radical to the ridiculous and are unlikely to ever be implemented, they’re still worth paying attention to. They give us an indication of the direction the parties want to take, and could well reappear in a more watered-down format later on during the governmental cycle.

They may also become part of post-election negotiations, where even small parties hold key cards as the larger parties fight to cobble together viable government coalitions.

They also say something about Sweden and the direction of the political sphere as a whole, where the parties are currently racing to outdo each other on who can be toughest on immigration and law and order.

The Local’s reporter Becky Waterton has gone through all the parties’ election pledges to see how they specifically would affect foreign residents in Sweden – in case you’ve missed her article, click here to read it.

Also in the world of Swedish politics, a new poll by SVT and Novus has the Moderates and the Sweden Democrats neck and neck, Moderate leader Ulf Kristersson promised lower taxes in his summer speech and Prime Minister Magdalena Andersson tougher sentences on gang criminals in hers, and Sweden Democrat leader Jimmie Åkesson suggested changing the name of the Swedish Prison and Probation Service (Kriminalvården) to the Penal Office (Straffverket).

Sweden Elects is a new weekly column by Editor Emma Löfgren looking at the big talking points and issues in the Swedish election race. Members of The Local Sweden can sign up to receive the column plus several extra features as a newsletter in their email inbox each week. Just click on this “newsletters” option or visit the menu bar.

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