(cont. from § 8) The National Audit Office's report on the audit of subsidized employment (cont. AU10)
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
S considers that "nystartsjobb" (new start jobs) are important but that the system is poorly designed and fosters crime in the labor market 1 2 3. S demands an immediate stop to new grants, means-testing, requirements for collective agreements, and improved oversight 1 2 3 3. KD agrees to stop the fraud but votes no to pausing new nystartsjobb 4 5. L moves to reject the motions as the government has already taken measures and a stop is not the solution 6 7. S argues that Arbetsförmedlingen lacks resources 8. V considers subsidized employment to be necessary but wants them to be means-tested in consultation with the unions 9. L considers it unreasonable to withdraw the state subsidy to employer organizations 9.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Serkan Köse (S)
Madam Speaker! Thank you, Magnus Jacobsson, for the speech!
When we look at the subsidized employments, we can state that 18 billion kronor are paid out every year. Of those, according to Arbetsförmedlingen, what we know is almost 1 billion are incorrect payments.
Given that the Swedish National Audit Office in its report criticizes the nystartsjobb very harshly, I would like to ask if the member considers the measures that currently exist from the government's side to be sufficient to handle the abuse.
I also want to know if the member can say anything about what more needs to be done so that these subsidized employments will truly help those who are far away from the labor market.
I believe in the subsidized jobs and that they are important. If properly designed, they can mean that people receive support to enter the labor market.
Today at the committee meeting, we submitted a proposal for a committee initiative. I believe that both I and the member are in agreement on putting a stop to the cheating.
We mean that one way to do it is to pause all new grants of nystartsjobb until we see something concrete from the government's side to review the entire system of nystartsjobb.
I simply want to ask the member from Kristdemokraterna: Is the member ready to stand behind the Social Democratic initiative to put a stop to the cheating with the nystartsjobben?
Magnus Jacobsson (KD)
Madam Speaker! First, I would like to thank for the question from Serkan Köse, because I think it is an important question.
It seems that we have major problems with benefit fraud and crime in general across our various systems. It is something that the state has had to start working much more with. The government is taking measures in the area, which I am pleased about.
The question is actually quite difficult, I think. I belong to those who, in principle, would prefer above all that the tax system be reviewed and that employment in ordinary activities be facilitated. It was very exciting when we were in Japan and did study visits. They have a regulatory framework where people who have extra needs are employed in ordinary activities, and so on.
Regardless of my ideological stance on the labor market, there will probably always be people who, in different ways, need support to enter the labor market. Regardless of the problems that exist and regardless of the fact that the government is now taking a number of measures, I simply believe that it will be wrong if one pauses or stops. It means that individual people who have a need to enter the labor market will be prevented from doing so.
I am therefore skeptical of that specific method but share the ambition that we should have order and clarity, whether it concerns migration policy, labor market policy, or crime policy. Therefore, as I said in my speech, I have been very clear that the National Audit Office is critical and that I share its criticism. But I am also very pleased that the government is now taking action on this.
Serkan Köse (S)
Madam Speaker! We can state that we agree on the description of the problem, but it feels as though we are not quite in agreement on how we should handle the problem.
It is 18 billion in subsidies and 1 billion, as we know, in incorrect payments. This feeds work-related crime in the Swedish labor market today. It is being abused. The National Audit Office is very harsh towards the tax system we have with nystartsjobb and subsidies.
We need to do something, and it seems that Magnus Jacobsson and I agree on that. Here is a proposal. It is not about stopping those who have the initiative today, but it is about the granting of new start-up jobs. It is about putting a stop to the fraud, that is to say that our tax money should not go out to criminal activities or criminal companies.
I agree with Magnus Jacobsson that subsidized employment is needed and will be needed for certain groups. But that is not what we are discussing. We are not going to stop any subsidized employment, but we are going to put a stop to a system that is poorly designed and which fosters crime and where our tax money is pumped out to companies that fiddle with our money.
One way to be able to do that is to stop and pause this until we get some kind of concrete proposal from the government on how we should handle this and get control over the entire system.
Once again, my question to the Christian Democrats: Are the Christian Democrats willing to give a statement today on whether you intend to put a stop to the fraud, join forces with us Social Democrats, and pause the new influx of the "nystartsjobb" (new start jobs)?
Magnus Jacobsson (KD)
Madam Speaker! There were actually two questions. One was whether we should put a stop to the cheating, and the answer to that is yes. When it comes to the question of whether we should act in concert in the proposal that has been submitted to the committee, I will vote no to the proposal.
It is connected to precisely this description. It is 18 billion, and there are signs indicating that 1 billion is fraud. But it still means that 17 billion are used correctly. We have 350,000 who stand outside the labor market. 350,000 is not a figure, but it is individuals. They are people. It is someone who does not feel included. It is someone who does not get up in the morning and go to a work community and a social community where one feels closeness.
I believe that we should do what we can to tackle the cheating - through the police, with a payment authority, and with a completely new order at Arbetsförmedlingen. I also believe that these things, in the long run, will lead to things getting better.
I am, however, not sure that they will lead to all cheating disappearing, but I am unfortunately afraid that the criminal sphere tends to analyze different laws and exploit people in a brutal way. We have seen it in other areas, Madam Speaker, for example LSS. It is a fantastic reform that really gives people what they need, and then there are individual criminals who use it. And I actually see that it is the same phenomenon here.
I do not believe in the solution of closing for all new start-up jobs. But I completely agree with Member Köse that we must tackle the crime, and I hope that we will be able to do that together in this chamber.
Serkan Köse (S)
Madam Speaker! Everyone who can work shall work, and those who need support to get into work shall receive that help. For those who have a weak position on the labor market, subsidized employment, as I have mentioned earlier, can be an effective way to create lasting employment.
Even though the path to self-sufficiency looks different for different individuals, it is clear that subsidized employment, when used correctly, plays an important role within the labor market policy.
Madam Speaker! It is, however, crucial that these employments are used wisely and responsibly. Unfortunately, we have seen that this is not always the case.
Madam Speaker! We Social Democrats have long warned that unserious and criminal companies exploit these systems, which leads to waste of taxpayers' money and distortion of industries. This hits serious companies and the unemployed who truly need support to get into work.
Madam Speaker! The Swedish National Audit Office's report on the audit of subsidized employment confirms our concern. The report shows that the "nystartsjobb" (new start jobs) have, due to insufficient controls and weak requirements on employers, led to increased fraud and increased crime in the working life.
The National Audit Office notes that the government has designed the subsidized employments in a way that entails a risk of abuse. This applies particularly to the "nystartsjobb" (new start jobs), which have a high compensation level but few controls. It is difficult for the Public Employment Service to monitor wages and insurance when employers lack collective agreements.
Madam Speaker! The review shows that the control of these employments is not effective. Problems with outdated IT systems, cumbersome administration, and insufficient controls are highlighted. Every incorrect payment is not only a waste of tax money but also a failed effort for the individuals who truly need the support.
Madam Speaker! The "nystartsjobb" (new start jobs), which were introduced by the center-right government in 2007 and have been the right's favorite measure, differ from ordinary labor market policy programs by not requiring referral from Arbetsförmedlingen. The subsidy is a right as long as the employee meets certain qualification conditions, such as being unemployed for a certain period or being a newcomer in the establishment program. The purpose was to make it easier and cheaper for companies to hire, which has contributed to more people being hired compared to other types of subsidy forms.
Madam Speaker! In the current situation, 30,000 people have nystartsjobb with a budget space of around 5 billion kronor. This distinguishes nystartsjobben significantly from other subsidized employments. But this simplicity has also led to greater deadweight effects, as we usually say, that is to say that the subsidy goes to people who would likely have received jobs anyway, and to increased abuse.
Madam Speaker! The nystartsjobb are particularly vulnerable to fraud because they are not preceded by the same screening and regulatory framework as other subsidized jobs. The lax regulatory framework leads to a great waste of taxpayers' money and a distortion of industries, which risks knocking out serious companies.
Madam Speaker! We Social Democrats demand zero tolerance for fraud regarding wage subsidies to guarantee that the money goes where it is supposed to. Furthermore, the Swedish National Audit Office notes that those who have a subsidized employment are rarely covered by collective agreements, which complicates the monitoring of working conditions. We believe that the government's efforts are not sufficient to combat the fraud with the "nystartsjobb" (new start jobs). All available means must be used to counteract crime in the labor market and the gang crime that it often fuels.
The government's cuts in the labor market policy area are now having serious consequences for the control of subsidized employment.
Madam Speaker! The Swedish National Audit Office's review shows that Arbetsförmedlingen lacks sufficient resources for effective control work. The administrative appropriation has decreased over recent years, and in the budget bill for 2024, we have received further cuts. This affects the agency's ability to handle decisions on subsidized employment and to develop necessary controls. The number of cases that control investigators need to handle will likely increase in both number and complexity. Furthermore, the Swedish National Audit Office emphasizes that the Swedish Payments Agency will send notifications of suspected errors to the agencies, which will require additional resources.
This is at odds with the government's cuts, which have already weakened Arbetsförmedlingen's capacity to carry out effective controls. With reduced administrative grants and further budget cuts ahead, we risk facing a situation where the agency cannot handle the increasing volume and, again, the complexity of cases. The government's cuts thus undermine the fight against crime in the labor market and impair the possibility of ensuring that tax money is used in the right way. This is not only inefficient but also unacceptable in a time when every tax krona must be used responsibly.
Madam Speaker! Introducing a labor market policy assessment before the granting of new start jobs is a simple measure that would make a big difference. In line with the National Audit Office's recommendations, we Social Democrats therefore propose that Arbetsförmedlingen should be given the opportunity to improve the control of companies without collective agreements. We also propose a review of the system for reclaiming incorrectly paid wage subsidies, and we also want to reintroduce the state support for trade union consultation.
Madam Speaker! I want to raise a warning finger regarding the risk of increased fraud with subsidized employment when the government, from next year, phases out the support to the unions for consultation. The assessment of workplaces' suitability will become much worse, and the unions will have to bear the cost of processing consultation statements, which I consider to be completely unreasonable.
The work of responding to requests for statements involves a large workload for many labor organizations, especially for those organizing industries with a large proportion of subsidized employments such as health and care, trade, as well as the hotel and restaurant industry. When the compensation to the labor organizations is removed, there is a risk that fewer unions will be able to answer Arbetsförmedlingen's requests. This means that the agency may lose valuable information before decisions on subsidized employments are made.
Madam Speaker! We cannot stand by while the citizens' tax money leaks out of the state treasury. In order to get the nystartsjobb (new start jobs) in order, a means test similar to the one that applies to other subsidized jobs is needed. A labor market agency representative shall, in each individual case, assess whether it is labor market policy-motivated to give the individual and the companies a tax discount. We also believe that only companies with collective agreements shall be able to employ people with nystartsjobb.
Madam Speaker! In order to prevent abuse and ensure that the funds reach those who need them most, the control of the subsidized employments must be strengthened. Today, through a committee initiative in the Committee on Employment, we have demanded an immediate stop to all new allocations for nystartsjobb until the government has taken measures to obtain sufficient control over where the money is going.
I really hope, Madam Speaker, that the Sweden Democrats, the Moderates, the Christian Democrats and the Liberals support our proposal. I mean that it is time to take control of this system so that, once and for all, there is order and clarity regarding the restart jobs.
With this, I move for approval of reservation 1.
Madam Speaker! Since this is the final debate before the summer, I would like to take the opportunity to conclude by thanking the Employment Committee's fantastic secretariat for their hard work and support. I also want to thank my colleagues in the committee for their cooperation and commitment. Finally, I would like to extend a big thank you to the Speaker and the Speaker's Presidium for their efforts. I also wish you, who are sitting in the gallery, a fantastic and wonderful summer!
Camilla Mårtensen (L)
Madam Speaker! I would like to begin by moving for approval of the committee's proposal to reject the motions and to file the petition.
150,000 Swedes have some form of subsidized employment, and that is good given the conditions that exist in the Swedish labor market. In the best of worlds, we would have had a more flexible labor market where companies dared and had the finances to employ even those citizens who stand further away from the labor market, have work barriers, or need to try a new career.
But that is not how it looks, and that is why there are different forms of subsidies. The report states that they also have a good effect if they are used wisely. This means, among other things, that our common resources should not end up in the pockets of welfare criminals.
Today's debate is about exactly this. The National Audit Office's report highlights the major problems that exist and have existed for a long time, and it feels good that our government is on the ball and, as previous speakers have highlighted, has a large range of measures. A major transformation effort has taken shape, which was confirmed when we had Arbetsförmedlingen's new Director General visiting the committee.
Madam Speaker! The government has overhauled the crime policy, and even those who engage in welfare crime will realize it. The possibility of denying payments to unserious actors has been strengthened, as has the possibility of not granting interventions at unsuitable employers. Through the Payment Authority, incorrect payments will be detected through data analyses and audits. Since March, we have had a new law on the duty to provide information to counter incorrect payments and crime. The government has changed the ordinance so that Arbetsförmedlingen has greater opportunities to carry out controls of job seekers' right to work and reside in Sweden.
The very best measure, however, is to ensure that crimes, fraud, and inaccuracies never occur. It must be easy to do the right thing for both the employment service, the employer, and the employee.
I have some contacts with Christina, a skilled employment agent in Stockholm. She has told me about a company, in this specific example a company with collective agreements, which has very many subsidized employments and which systematically terminates the employments after two years in order to directly hire a new employee on subsidy.
The regulatory changes that are now taking place mean that the employment service shall be able to stop the employment in a much simpler way than was possible previously. It is absolutely necessary that that type of company shall not be allowed to receive subsidies, regardless of whether they have collective agreements or not.
Unfortunately, Christina is also somewhat concerned about the establishment jobs. Too few are being granted, and Christina's view is that it will continue to be so for a long time. What is the difference compared to other subsidized employments is that the establishment jobs involve less administration for the employers but become significantly more complicated for the job seeker who often has language difficulties. It increases the burden on Arbetsförmedlingen and generates fewer jobs for the individuals who need them so much.
The Social Democrats' solution is to demand collective agreements and pause the nystartsjobb, along with a bit of other things. To pause a labor market measure that works well in large parts is bad when we have an unemployment rate that is increasing.
6 out of 10 small businesses lack collective agreements. In figures, it is 178,000 companies that have chosen not to have collective agreements. It is not because they have bad conditions or because they are villains, but it is because we in Sweden have a system where it is voluntary to have collective agreements and voluntary to be affiliated with a union. Many of these small businesses do not want to or do not have the economic possibilities, and one reason often cited is the lack of flexibility in collective agreements.
Madam Speaker! More than seven out of ten new jobs are created in small companies. Many new companies hire from the start. It is about 30,000 new jobs in the country every year and not infrequently in places where larger companies or public activities have disappeared. With the large group of unemployed who now stand outside the labor market, Sweden cannot afford to ignore this important group of entrepreneurs. It is in the small companies that it happens, and it is there that it is easiest to get a job.
The establishment jobs, where collective agreements are required, and the start-up jobs, where they are not, are communicating vessels. If the labor market parties succeed in getting more people into establishment jobs, subsidized employment such as start-up jobs will also decrease. But so far, we do not see any explosion of establishment jobs. I hope that it will come.
Serkan Köse (S)
Madam Speaker! Thank you for an engaging speech, Camilla Mårtensen!
The Chairman mentioned the control authority and Arbetsförmedlingen and Arbetsförmedlingen's resources several times. I have looked at Arbetsförmedlingen's response to the government where they comment on this report. Arbetsförmedlingen is clear that the authority prioritizes the work with control and countering incorrect payments and that they are trying to develop their control apparatus based on the administrative means they have at their disposal. They also write that this takes up resources and that cooperation with Utbetalningsmyndigheten requires more operational resources.
My question is quite simple. The member speaks about the fraud, about 18 billion for subsidized jobs and 1 billion in incorrect payments. I wonder if the member, whose party now governs the Ministry of Employment, is satisfied with the resources for Arbetsförmedlingen. Are they sufficient to tackle this problem, given that Arbetsförmedlingen itself claims that they will not be able to manage it?
Camilla Mårtensen (L)
Madam Speaker! Thank you for your question, Serkan Köse!
The short answer is yes. But I suspect that the member wants me to elaborate on it a little bit.
I and the member sat together in the committee when the new director-general received this question. I was reassured by what she said. She meant that the resources he has been allocated will be sufficient.
It is not always about resources. I think it is also about changed ways of working. That is exactly what I have perceived that the new director-general is tackling.
I feel calm. I feel that we have put a task force in place that will make a difference when it comes to this.
Serkan Köse (S)
Madam Speaker! I thank you for the answer.
Yes, I was at the meeting. It was I who asked the Director General about the resources. I had, in fact, read an article where the budget proposal that Arbetsförmedlingen submitted to the government for the period 2024-2026 was commented on, and in that budget proposal, it states clearly and plainly that they will not be able to fulfill their mandate with the existing resources they have at their disposal.
It became interesting, but we perhaps should not go into what was discussed and said at a committee meeting. But I did not quite perceive it as that one is completely satisfied with the resources one has. It felt a bit like that one answered the question but did not intend to have a discussion with the committee. The budget basis perhaps should be a discussion between the gd:n and the minister, since it is to be submitted to the government. But we can leave that aside.
I still experience that the authority in the response regarding the National Audit Office's report states that one will not be able to manage it with the resources one has.
It is 1 billion in incorrect payments. Shall we stop it? As we have said, we have asked the government friends of the member's party and are now asking how the Liberals view our committee's initiative today. What we can do is very simple. We can stop, pause, new nystartsjobb. It is not a budget issue. It is a matter of putting a stop to it now, until we know how the system can be constructed and can do it a bit better.
My question to the Liberals is, once again: Will the Liberals stand behind the Social Democrats' initiative to pause the granting of new nystartsjobb until we see something concrete from the government?
Camilla Mårtensen (L)
Madam Speaker! No, we in the Liberals will not stand behind this proposal for a committee initiative. We see, however, that the measures that have been taken will make a difference. That is not to say that further measures will not need to be taken to address this fraud.
The lion's share of this, 17 billion, is considered to be in the right place. 1 billion is an incredible amount of money, and we must stop that. But I am not sure that stopping more nystartsjobb would prevent this.
Just as I said in my speech, I think we must continue to work on addressing it when it has gone wrong, when it has been cheated deliberately. But we must also change the work that takes place beforehand, so that it does not go wrong. We must give the employment agencies simpler conditions to stop some of this, when they can see already in advance that it is not a fair employer.
I also want to point out that there is cheating regardless of whether one has a collective agreement or not. But the member is naturally correct that it is easier to monitor those who have a collective agreement. But stopping all new-start jobs is not the solution.
Ciczie Weidby (V)
Madam Speaker! The primary task of active labor market policy is to support people who become unemployed so that they return to permanent employment and self-sufficiency. Since unemployed individuals constitute a heterogeneous group with varying needs and circumstances, a range of different labor market policy tools are needed. These are education, work placements, guidance, matching, and precisely subsidized employment.
Vänsterpartiet thinks that subsidized employment is a good and necessary measure to help newcomers, the long-term unemployed, and persons with various disabilities to gain a firmer connection to the regular labor market. This type of employment also has support in research. Studies show that persons who have had a subsidized employment get a job without support much faster compared to those who have been openly unemployed.
With the right circumstances, this effort from society will therefore lead to a welfare gain for both the individual and the economy as a whole.
Madam Speaker! In recent years, however, we have seen several examples of unserious employers within certain industries systematically hiring unemployed people from a multitude of different programs instead of hiring them as regular employees. When the subsidy period ends, the employment is terminated, and thereafter a new person is hired who also has a subsidized employment. Some employers even write openly in their job advertisements that they are seeking persons who are entitled to subsidized employment.
Reviews conducted by both the media and individual trade unions indicate extensive abuse, fraud, economic crime, unfair competition, and exploitation of vulnerable people.
It is obvious that many employers use these employments as a way to dump working conditions or to make it possible to submit lower bids in procurements. This naturally leads to the competition being distorted, working conditions being dumped, and regular employments being omitted.
Vänsterpartiet has warned against this for many years, and we have repeatedly submitted proposals in the Riksdag to curb these irregularities, over-utilization, and other inaccuracies linked to the subsidized employments.
Vänsterpartiet has, among other things, proposed that nystartsjobb shall be covered by requirements for terms in accordance with collective agreements, that the rights-based construction of nystartsjobb shall be changed so that labor market policy assessment and consultation with trade unions shall be carried out before decisions on the payment of the subsidy are made, and that the government shall instruct Arbetsförmedlingen to tighten the control and follow-up of employers who receive support to hire.
Madam Speaker! Vänsterpartiet and I welcome the National Audit Office's review and share the report's conclusions and recommendations. I note that the government in the communication unfortunately neither mentions how it views the problems raised in the National Audit Office's report nor presents any concrete proposals for measures in light of the information that appears in the report. Instead, the government highlights a number of other measures which are certainly good but which do not really bear on the problems raised in the report. Most of the measures that the government highlights had the government, or the previous government, additionally decided on already before this review was conducted. Reasonably, the government should therefore take specific measures in light of the recommendations.
I also mean that in addition to the Swedish National Audit Office's recommendations, there are more things that could be done. In the LO report *Establishment or segmentation? - An analysis of the system of subsidized employment*, there are a number of very good, concrete proposals. I want to highlight two of them here. For the first, these new-start jobs must obviously be means-tested. They should be tested in consultation with, for example, the union before decisions are made. For the second, the conditions for the Public Employment Service to monitor fraud and irregularities should naturally be strengthened. There must also be opportunities for punitive sanctions against employers who bypass or ignore the requirements. If one were to only do these two things as proposed in the report, a huge number of the problems that have been highlighted could be countered.
Madam Speaker! Before Arbetsförmedlingen makes a decision on introductory jobs and wage subsidies, the authority shall obtain a statement from the relevant employees' organization regarding the workplace's suitability. The consultation between Arbetsförmedlingen and the relevant trade unions is important for the authority's monitoring work. During the consultations, one can indeed collect valuable information, for example, regarding what the wage structure and other conditions look like, or whether the employer may have laid off staff not too long ago. Having that knowledge as a basis for the decision is incredibly important. It ensures that one does not create unhealthy competition and that employers cannot hire on incorrect grounds.
Unfortunately, the consultation process between Arbetsförmedlingen and the trade unions has functioned quite poorly for a long time, and this has been noted by the trade unions and also Vänsterpartiet. The shortcomings are also highlighted in the Riksrevisionen's report.
Several unions within industries that have a large number of employees with subsidized employment, for example the hotel and restaurant union, refrain completely from commenting. This is because the management is simply too extensive and consumes too many of their resources. The same is true for Arbetsförmedlingen.
Madam Speaker! One can reflect on the fact that, in connection with the regulatory changes implemented in December 2022, a state grant was introduced that can provide the employers' organizations with compensation for the important work they do with statements. It is a result of long-term advocacy work from the trade union organizations' side. But now the government announces that it will withdraw this. It is a completely unreasonable decision. Instead of changing the design and getting things in order, it is announced that it will be abolished. It is a very strange order, the Left Party thinks. The purpose of the trade unions' statements is, as said, to contribute to ensuring quality, countering abuse, and preventing people from suffering. It should be in the society's interest to oppose unserious employers.
A parallel can be drawn to the parties' work to counteract crime in the workplace in general. There, the parties have the opportunity to apply for grants from the state, for example via Arbetsmiljöverket, to cover the costs for the work they undertake. Vänsterpartiet believes that the same principle should apply to the workers' organizations' work in submitting statements to Arbetsförmedlingen.
I see that my colleagues in the chamber are wondering if I intend to speak further on this, but I actually do not. Ciczie Weidby, Vänsterpartiet, hereby concludes her speech by moving for approval of reservation number 3.
The deliberation was hereby concluded.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.