(cont.) Response to interpellation 2024/25:604 on the equalization system
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
The debate concerns the tax equalization system and the preparation of a new bill. KD argues that the preparation is taking time due to extensive referral responses and the need for well-considered decisions 1. KD emphasizes the importance of strengthening the growth perspective, analyzing gaps in high-tax municipalities, and avoiding parameters that hinder growth or municipal mergers 1 2. KD argues that the equalization system already compensates for sparseness and small size 3. S considers that the equalization system is not sufficiently equalizing and requests clearer information regarding future proposals 4. S criticizes that support for small rural municipalities has been removed and advocates for more equalization as well as general state grants 4.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Statsrådet Erik Slottner (KD)
Madam Speaker! We now resume the interpellation debate concerning the tax equalization system and what is happening with the investigation that was submitted in July last year.
I understand that the question is raised. It has taken some time. It was an extensive investigation work that took place over a long period, and as I said in my interpellation answer, it has been sent out for very broad consultation. All municipalities and regions in Sweden, 310 of them, as well as many other agencies, have been invited to submit comments.
As Eva Lindh knows, there have been many views. It naturally takes time to go through so many views, and then the preparation takes extra long. Furthermore, there are trade-offs and positions that must be made. This will have a major impact, both positive and negative, on individual municipalities and regions. It is now a matter of finding a system and presenting a proposition that is as well-balanced and proportionate as possible, also towards those municipalities and regions that are affected or benefited in different ways. Before we do that and move forward with such a large proposition, we simply need time.
I understand that there is now a demand for when more information will be provided. I cannot really give any information at this stage. What I can answer is simply that the preparation is ongoing. I will provide the reasons why the preparation is taking longer than usual.
I can add that the Tidö Government gave additional directives to the investigation, which Eva Lindh knows as she was a member of the committee, to further strengthen the growth perspective and analyze the problems with taxes, i.e., that in high-tax municipalities there is a large gap between the residents who pay the highest municipal tax and those who pay the lowest municipal tax and how that gap can be reduced.
We must also take a position on whether we think the committee did a sufficiently developed job and provided sufficiently good proposals in these respects, or if the government wants to add further items.
It is such reasons that lie behind why this preparation takes longer than a regular investigation.
Eva Lindh (S)
Madam Speaker! All municipalities and regions are receiving insufficient resources to manage healthcare, elderly care, and schools. But it is particularly tough for many municipalities in rural areas or in the countryside, that is, small municipalities. They are now waiting – just like everyone else, of course – to receive a decision.
It takes time. I sat in the committee myself, and I know that it is a complicated system with many trade-offs that need to be made. I fully understand that. That was also why we asked to be granted more time for the investigation in order to be able to handle all the issues. Now we were only given two extra months, which didn't make a huge difference. But an investigation has been carried out that has been given to the government, and which the municipalities and regions have nevertheless managed to respond to.
I think it is good to get some more and clearer information, because I interpret the Minister for Civil Affairs as saying that some kind of new proposal will still come. It is good to know, because even there there has been uncertainty. Will the investigation that was conducted and the committee's work just be submitted and nothing at all be done? Then that is a statement.
If it is the case that work is being done and some kind of proposal is coming, it is of course good to know approximately when. If I have interpreted this correctly, the government is in the process of preparing some kind of proposal, so it would be nice if the Minister could say so and give some indication as to whether it will happen this year or next year. It would actually be very good for all those municipalities and regions where local politicians are currently facing very tough trade-offs – whether they will have to make more cuts or how they should tackle the tough finances and the difficult challenges that most municipalities and regions still have.
At the same time as we wait, I want to make a point. We know, as stated, and the investigation also showed, that the differences and the needs are greater than many thought. Many municipalities are really struggling hard. Everyone is struggling, but some are struggling extra hard. Then it is strange that, during the wait, the support that we Social Democrats introduced, which was specifically targeted at the sparsely populated and rural municipalities – the smallest municipalities – which have it the toughest, was removed. We had a specific fund, a specific support, and what we thought was important was to extend it at least during the waiting period.
Now it will become even harder and tougher for precisely these municipalities. The people who live in sparsely populated areas and in the countryside and in these small municipalities will receive a welfare that is depleted even further. Therefore, I think it was a most strange decision that was made.
I think it is better to make investments in, for example, Boxholm, Vadstena, Valdemarsvik, Ydre and Ödeshög in Östergötland so that those municipalities can manage a good welfare than for the investments to go to tax cuts for primarily wealthy men in large cities.
Statsrådet Erik Slottner (KD)
Madam Speaker! Now, it should be said in connection with the last point here that the equalization system compensates for sparseness and smallness. These are two components that it actually compensates for.
I do not think it is very good governance to, in addition to that, add a lot of extra grants that further compensate for this. I think it is good if what we compensate for regarding structural conditions and differences is done within the tax equalization system. I think it is very welcome if it is done.
I looked just before this debate and noted that the municipalities that had the largest surpluses last year, those with the best economy per inhabitant, were actually municipalities with between 30,000 and 50,000 inhabitants. It was therefore not the largest municipalities that had the best economy, nor the smallest, but it was the middle tier with between 30,000 and 50,000 inhabitants. What that is due to, I do not know, but I note it with extra great interest.
I can absolutely state that the investigation is not sitting in a desk drawer. I have also heard rumors and fears that we have put it in the desk drawer and do not want to move forward with anything. That is not the case.
I am also very well aware that the parliamentary committee that submitted this was in agreement. It also strengthens in some way the incentives and the motivation – and the arguments for, shall I say – to move forward with something. I think that it does; I must say that. It would be strange not to move forward with something when a parliamentary committee commissioned by the Riksdag is in agreement, so we can probably count on it being done.
But the message is that it is still being prepared, and that is, as said, because there are very many different issues that must be weighed. Different proposals we choose to move forward with have consequences. There are very many viewpoints from different sides, and they vary. Many can have good arguments. There are many good arguments for each respective viewpoint, and there we must make a wise assessment. Therefore, the issue is still being prepared, and no decisions have been made yet.
Since some general municipal economic views also appeared in Eva Lindh's post, I want to say that the economy in the municipalities now looks better. 2024 was the toughest year, but there was still a total surplus in the municipal sector of 6 billion kronor. It was a minus in the regions but a plus for the municipalities. Now that we are entering 2025, the outlook looks much better.
An image is being created here now that the economy in the municipalities is very poor. I do not agree with that. It is still strained, and it is still a tough economic situation. We also see that the economy in the outside world is restless. It is very difficult to know what the forecasts will look like going forward. That makes it harder to set a municipal budget, because it affects so much how the tax base develops, how the number of hours worked develops, and how growth and the economy develop. It is of course tough for the municipalities to know the economic conditions. But overall, the economic situation still looks better in 2025 than it did in 2024. Many municipalities have also built up a result equalization reserve that can be used in cases where they run a deficit.
Eva Lindh (S)
Madam Speaker! I thank the Minister for Civil Affairs! I know more now, in any case, than I did before. That is always good, so I thank him for that. Then we know that there is work in progress. If one hears nothing, it is clear that one thinks there is a risk that nothing has come of it. It is good that municipalities and regions and several of us who are interested know this.
I still want to say that we have a redistribution system that is not completely redistributive. Maybe none of us want a total redistribution, but we still think there is too little redistribution and that more redistribution is needed. That was why the Social Democrats also added these funds to the municipalities that are struggling and have it toughest.
The smallest municipalities may not be 30,000 but up to 30,000. Just as the Minister knows, these municipalities sometimes manage reasonably well, depending on location, sparseness, and rural areas. I believe that many still see that the sparseness index needs to carry more weight, because these differences do exist. So it is good that this is not in the drawer.
I have read all the referrals that have been submitted. I have been a local politician myself, and it is clear that many local politicians realize that it is tough if one loses. We understand that. Still, it is also about whether the government that is in power at the time can provide funds. The investigation is not supposed to cost more money, meaning that we wouldn't have more money to distribute. It was supposed to be cost-neutral.
The investigation has carried out is about how one distributes money. One can give more in general state grants, and we in the Socialdemokraterna have shown that one can do that. This would be good.
Statsrådet Erik Slottner (KD)
Madam Speaker! Even this government has shown that we can provide more money to the municipal sector. We have permanently increased the general government grants by 16 billion so far during this parliamentary term. We have also increased the targeted government grants. Now, the targeted government grants are not included in the equalization system, but the general ones are. We will have to see what level we choose to set the government grant at in the upcoming budget this autumn.
For me, it is important now that we do not get new parameters that inhibit growth. I think that is very important. We rather encourage and build in systems that make it actually profitable to carry out growth work. I think that is an important parameter. Hence the additional directive we gave.
I also think it is important that we do not build in systems that counteract municipal mergers. As Eva Lindh knows, I want to see municipal mergers in Sweden. There are probably too many municipalities. There are too many municipalities with far too small a population to manage the welfare mandate they have and the mandates they have regarding crime prevention work, skills supply, strategic work, climate adaptation, and civil defense etcetera.
Today, one can see parameters in the tax equalization system where one loses out by merging municipalities. I think that is very unfortunate.
There are, therefore, certain things I consider important. When we are now going to make the parameters as fair as possible in order to level out structural differences between the municipalities, it is important that we do not build in mechanisms that, for example, counteract growth or municipal mergers. These are two important parameters for me in this work.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.