The National Audit Office's report Black on White - the costs and effects of the deduction at source

Crister Carlsson (M)

Mr. Speaker! I would like to begin by expressing my approval of the committee's proposal for a decision.

The Swedish National Audit Office, in the report "Black on White – the cost and effects of the rot deduction," has examined whether the government has designed the rot deduction in such a way that it increases the labor supply and reduces undeclared work in a lasting and effective manner. The Swedish National Audit Office provides both praise and criticism in its report.

The National Audit Office assesses that the rotavdrag has had a relatively large significance in reducing the demand for black market craft services but, on the other hand, has had a very limited effect when it comes to increasing labor supply and incomes. The National Audit Office's overall conclusion is that rotavdrag in its current design does not create sufficiently large tax revenues through reduced black market work and increased labor supply to justify the state's costs for rotavdrag.

The National Audit Office also notes in the audit that the use of black wages within the construction industry has increased while households have reduced their demand for black services. This means that many services that are perceived as white in the consumer link are, in the actual work, paid with black wages some or several links back.

Furthermore, the Swedish National Audit Office notes that the problems with crime in the working life have increased significantly in the construction industry. It is therefore assessed that measures other than the rotavdrag are required to combat and counter the type of illegal work and other crime that now exists in several of the rot companies and in other parts of the construction industry.

But here I don't quite understand the logic in it all. I might be thinking incorrectly, but the purpose of the deduction is, among other things, to reduce the attractiveness for ordinary people to hire black labor, which the National Audit Office also says it does. But what does the size of the deduction and its being or non-being with black wages in the second and third degree have to do with? That is how I think. If one removes or reduces the deduction, does the black labor in the second or third degree decrease? No, probably not, but then other measures are needed.

The solution to those problems is, of course, comprehensive, persistent, and effective measures against serious crime. This needs to be complemented by a reform that addresses the underlying problems. Here, the government has decided on additional directives to the Delegation against labor market crime to analyze the construction sector in order to resolve the problems.

When asking the tradespeople if the rotavdrag (deduction for renovation) is significant for their industry, 80 percent say that the deduction has a large or very large significance. On a further question about what decision-makers should do, the answer is, among other things: Increase the rotavdrag! This comes from the industry itself.

Then one hears all that is usually said about luxury-rot. I have no problem with the fact that some high-income earners use the rot deduction and create jobs in the construction industry if it leads to people paying white instead of black. For example, we have the chief physician in oncological diseases who certainly has a good salary, goes to work, treats cancer patients, and perhaps works overtime to cut queues in cancer care instead of painting the house, wallpapering, or changing cabinets and drawers in the kitchen. The doctor keeps down the care queues, and the carpenter gets a job and does the carpentry work at the doctor's home instead.

The Agency for Growth Policy Evaluations and Analyses has shown that employment in the niche for renovation work would have been 11,000-16,000 people lower without the renovation deduction. We are therefore talking about 11,000-16,000 fewer craftsmen working for private individuals. It shows how incredibly important rot is for people to be able to afford to own their homes.

Criticism is often directed at the fact that the greatest effect of ROT occurs in Gothenburg and Stockholm, i.e., the large cities, because wages are higher there, but the ROT deduction is almost even more important for those of us who live outside the large cities. In many places, the property values are so low that it does not pay to build new, but with ROT, the labor costs are at least reduced drastically, so that it becomes possible for an ordinary family to change the waterproofing in the bathroom, rewire the electricity, or drain around the house.

Mr. Speaker! The Social Democrats, in their budget motion for 2024, have proposed a reformed rot deduction with an increased subsidy rate for energy-efficient measures, for example, geothermal heating, water-based heating, and so on. There, an increased subsidy rate of 50 percent is proposed, while the subsidy rate is lowered for other rot work. Here, I believe one forgets the rest of the house. Neglected maintenance of the house can quickly affect the building's condition, which can have major consequences for both economy and health. It would increase the risk that one needs to make emergency repairs. One example is ventilation systems, which can break down completely if one does not maintain them regularly and replace them before they function poorly. Then it can become expensive to repair it urgently and replace it. In the worst case, it can also lead to moisture damage to the house and health problems for those in the house because the system does not function.

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

Hanna Westerén (S)

Mr. Speaker! Thank you, Crister Carlsson, for a speech that is interesting in the broadest sense of the word! There are several things that I think are worth discussing further. But first, I want to say that I note with some dismay and surprise that only one of the four parties in the government base is present to discuss this reform that Crister Carlsson so eagerly defends. I think that it might perhaps be connected to the rather flawed logic that Crister Carlsson refers to.

In the situation Sweden finds itself in, with a housing crisis, a construction crisis, and great challenges for many households, it feels completely out of touch with the world to push through with more rotavdrag. I cannot understand that one reads the National Audit Office's report and then thinks: We'll just do a bit more of the same!

Crister Carlsson also refers to the fact that it is not a question of some luxury-rot and that we should grant the chief physician new cupboard doors. I do not envy anyone anything, but the most severely tested households in Sweden today are going through immense trials. The rot deduction makes no difference for them.

I also wonder if Crister Carlsson really understands how much money one has to earn to qualify for the rotavdrag in full. For me, an increased child benefit would have suited much better than an increased rotavdrag, given that we are also not seeing any measures whatsoever to reform the rotavdrag or make it safer or less attractive for criminal actors.

My question to Crister Carlsson is: Does the member know how high a monthly income one actually needs to have to be able to utilize the rot deduction fully?

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

Crister Carlsson (M)

Mr. Speaker! The increase of the deduction for labor costs is from July 1 to December 31 this year. It is only temporary. We will have to see after this period how it has turned out. But if a person with high incomes uses the deduction fully and does not pay under the table, then it is actually good.

I have a background in healthcare, so I haven't previously had any particularly fat salaries, so to speak. My colleagues there, who also don't have any fat salaries, use the tax deduction. The tax deduction is actually something that is good for the average person. We also see that there have been a lot more jobs in the rot industry.

I see no problems in this. But as we have said, we must of course wait and, after this period, which extends to the end of the year, see what this has led to. Then one simply has to conduct an investigation into what effects it has had.

The speech at riksdagen.se, in Swedish (opens in a new tab)

Hanna Westerén (S)

Mr. Speaker! Thank you, Crister Carlsson, for the answer! I do not want to wait for any investigation. It is perfectly clear that it is the 10 percent of households that have the absolutely highest incomes that benefit from this. It is not the average person. It is the 10 percent with the highest incomes.

But I would like to discuss something else. In a previous exchange of remarks with Crister Carlsson regarding rot, I wondered how the SD government could allow work-life crime to run rampant and the risks of black market work to increase. Then Crister Carlsson said that I was mixing apples and pears. Therefore, I would like to take the opportunity, here in the summer time, to dig around a bit in that fruit salad.

The National Audit Office is extremely clear that the risks of black market work increasing are very large. As long as the SD government does not take any measures, black market work risks increasing and work-life crime risks running rampant. Root and black market work have a connection today – I regret that it is so. Root and work-life crime have a connection today – I regret that too. But it is Crister Carlsson's government that lets these apples and pears lie next to each other.

Those who have grown up in the countryside, like I have, and who have taken care of fruit in the autumn know that apples and pears do poorly together. So it is also with the root branch, the serious companies, which I believe the Moderaterna actually once protected, our tax system and our common welfare - if the spoiled fruit is allowed to poison the others.

It is this that Crister Carlsson's government presents as a solution for a construction sector in crisis and for a housing market on the lifeline. For me, it is completely irresponsible and tone-deaf.

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

Crister Carlsson (M)

Mr. Speaker! I did not quite understand the question. But I can say something regarding mixing apples and pears. It concerns precisely this with the deduction and the crime in the labor market, which lies behind this, and the undeclared work that is done in the second and third links behind that. What does that have to do with the deduction itself? Ordinary people can utilize the deduction.

Certainly, if I hire person A for a white job, person A can hire person B black, but I don't quite understand the connection between my rotavdrag and the further backward connection. That was a bit what I said in my previous speech as well.

Regarding luxury-ROT, I would like to say that it is actually many older people who make use of the ROT deduction. They might not have the strength to crawl around on the floor and nail moldings or whatever it is they are going to do.

I absolutely think that the deduction for renovation is good. Then we will see what the increased limit will lead to, whether we get more white jobs instead of black ones.

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

Annika Hirvonen (MP)

Mr. Speaker! Initially, I would like to praise Hanna Westerén for having shown, in an incredibly good and illuminating way, among other things, the absurdity of the government prioritizing that the 10 percent richest should receive a discount on their renovations in a time of cost crisis – when every other single mother cannot afford to put food on the table and buy the clothes the children need every month. Thank you for that!

Then, Mr. Speaker, I would like to raise some objections to the reasoning that Crister Carlsson had in his speech. He speaks of it being irrelevant for the root deduction that we are now seeing a dramatic increase in black wages in the construction sector. But that is not the case, Mr. Speaker.

The whole point, as the Swedish National Audit Office points out in its report, is that the rotavdrag does not lead to the effects that were desired, that the rotavdrag is very expensive and that one does not earn back those funds through the payment of white tax revenues. The black [economy] has only moved. The minus item is just as large.

We need to take this to heart. The government needs to take what the National Audit Office says to heart. The tax deduction has not led to the chief physician in oncology working more. It has not led to the care queues becoming shorter. It has not made it so that the costs one pays for renovations have led to increased tax revenues, because the black wages have increased even though the consumer pays white.

I would like Crister Carlsson to acknowledge that he has understood this reasoning.

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

Crister Carlsson (M)

Mr. Speaker! It concerned just the ordinary person who hires companies in the renovation industry, and that the connection further back, i.e., in the second and third link, would play a role for the renovation deduction.

The government actually has an additional directive to address crime in the working life. The construction sector shall be analyzed and the problems there shall be addressed.

These are two different things, as I see it. I cannot quite understand how the rotavdrag would have an effect on specifically the second and third links. I would like someone to explain that to me.

Since it is actually the case that older people also utilize the rotavdrag. And that people who have a higher income pay white instead of black is good, I think.

The speech at riksdagen.se, in Swedish (opens in a new tab)

Annika Hirvonen (MP)

Mr. Speaker! The National Audit Office's report is about whether the renovation deduction has achieved its goals or not. The renovation deduction was claimed to be self-financing to a very high degree. It was said: Now black money will become white.

It turns out that the black money is growing. The rotavdrag becomes a gigantic negative item when it was largely supposed to be self-financed. That is the point here.

To make it so that this was never what was said and the purpose is, like, to mislead in this debate. Either the government parties have not understood and read the Riksrevisionen's report at all, or they are pretending that it is about something else.

But what the National Audit Office says is that this has not led to those who purchase public services working more. The doctors do not treat more patients. Those who build houses do not build more houses. It is perhaps rather the opposite, because now they are instead busy renovating fully functional kitchens. We do not direct the money only to the necessary ventilation replacements or the energy efficiencies that we need to make the climate transition.

This also leads to us encouraging total waste of resources. It is not just about the workforce working more on things that do not need to be built, but also about it becoming cheap to throw out things that work, things that one wants to throw out because one thinks it would be nice to have a different color on the tiles in the bathroom or different kitchen cabinet doors. For all that, people can choose that themselves, but we in the Riksdag who distribute tax money should direct the money where it is needed – climate transition or increased child allowance, to mention just two things.

(Applause)

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Crister Carlsson (M)

Mr. Speaker! The member of Parliament speaks of waste of resources. Is it a waste of resources, for example, to renovate the kitchen while living in a house? It is climate-friendly to renovate houses so that they last over time instead of falling apart. There is talk of luxury renovations, but I do not understand why it is brought up that one renovates fully functioning houses. As a person, I do not do a renovation just because it is fun, but because I want to maintain the house over time, and there is naturally a climate benefit with that.

It is also the case that the number of people in the construction industry would have been 11,000-16,000 lower without rot. I don't quite buy the argument from MP Hirvonen on this subject. I would, however, like to assert that the rot deduction has been very good over time. I also do not understand why the Social Democrats, who previously governed together with the Green Party, did nothing about the rot deduction then if one now thinks that it is so terrible.

(Applause)

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Hanna Westerén (S)

Mr. Speaker! Finally, we get the opportunity to debate the Swedish National Audit Office's report "Black on White - the costs and effects of the rot deduction." There is a certain risk of repetition, as we debated the high ceiling for the rot deduction a few weeks ago. I am nevertheless pleased, Mr. Speaker, by the opportunity to once again highlight the problematic fact that the sitting government does not at all appear to take to heart the recommendations from the Swedish National Audit Office, recommendations which clearly point out that those who push through more rot deductions without sharpening them to prevent undeclared work and increase the labor supply risk promoting more undeclared work at a very high price for the state.

I am the first, Mr. Speaker, to write about the inherent beauty of the Swedish tax system, but I also concede that it probably needs to comb its hair a bit, arrange its features, and review its inputs and outputs to be prepared for both today's and tomorrow's challenges. It is no secret that the distribution profile over time has leaned heavily towards those who are well-off – towards the one who has should be given, seems to have been the motto. It does not have to be so, however.

Mr. Speaker! As I have said earlier in the rostrum today, many Swedish households are finding it terribly tough right now. There are too many very many months left at the end of the salary, and our non-profit organizations testify that more and more are turning to them for basic needs such as food and clothes for themselves and for the children. We are informed that many Swedes borrow money to afford to do anything at all with the children during summer holidays and vacations. We also know that an enormous number would have been helped by an extra child allowance.

However, we must be clear, given the exchange just now, that not everyone in Sweden is suffering from hardship. Many of us have decent incomes and really do not need to worry at the end of the month. We have received job tax credits on top of job tax credits over the years, we can make deductions in every direction for rut and rot, and we can choose how we want to spend our holidays.

Do we need more of the same? Do we need to renovate more? My answer is no – at least not at our common expense, at least not at the price of increased illegal work and more people suffering, at least not at the price of many Swedish households being unable to prioritize nutritious food on the table, and at least not when Swedish healthcare itself is on life support.

It is completely unreasonable, Mr. Speaker, to push on with more of the same when the National Audit Office is so exceptionally clear that the ceiling for the tax deduction should rather be lowered. To return to what I said at the beginning of my speech, I also want to emphasize that the distributional policy effects of the proposal are clear: The proposal will primarily benefit the 10 percent of households that have the highest incomes. I repeat: To the one who has, more shall be given.

The government pushes on and continues to fertilize the most well-ordered with more money to renovate fully functioning kitchens and bathrooms, build more decks, and make standard upgrades in the small, neat nests on the Costa del Sol.

Mr. Speaker! What is happening now is that the SD government, with full confidence, is raising the ceiling for root without taking further measures to tackle illegal work. This is happening in industries where we know that labor crime is rampant and where people are harmed enormously and exploited mercilessly by unscrupulous actors.

Labor crime threatens healthy competition and withholds enormous amounts from our common welfare. But it is also a matter of life and death, to the extent that unscrupulous actors use undocumented people to perform work with substandard protective equipment and miserable conditions, without the right to such self-evidences for us as occupational health care, insurance, or pension contributions.

Illegal work is already occurring in the renovation sector, which is also covered in the warning from the National Audit Office. Labor crime is already rampant there. An increased deduction increases the risks exponentially for more withheld tax crowns, for more unhealthy competition, and for more people being abused, harmed, or even dying at workplaces with substandard conditions. That one is pushing through more renovation deductions despite the risks being known is completely senseless.

In the event that one seriously wants to achieve change and help the economy while also making an effort for the climate, we Social Democrats propose a reformed ROT deduction with an increased subsidy rate for energy-efficient measures. This could involve the installation of geothermal heating, water-borne heating, solar cells, doors and windows, or additional insulation. Energy-efficient services are proposed to receive an increased subsidy rate to 50 percent, while the subsidy rate is lowered for other ROT works. The measure will thus be public-financially neutral.

A higher subsidy rate for energy efficiency measures would increase cost-effectiveness and make the deduction more distributionally just. More people would be able to afford to start renovations, which would increase demand and benefit the construction sector.

The government's luxury-rot - yes, I continue to use that term - is not the right way forward, which is also confirmed in the report we are debating today. A raised ceiling will only benefit those who can already afford large renovations and will have no effect on the construction crisis. The effect will be increased distributive injustice and more people who suffer at work. This, Mr. Speaker, is happening in 2024 in Sweden. It is completely unreasonable.

With the reservation of motive we have submitted, I move that the Swedish National Audit Office's report be added to the records.

(Applause)

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Helena Lindahl (C)

Mr. Speaker! I was a bit hesitant about whether I should take the floor at all today, as I believe we had this debate last week. Now, however, I could not refrain.

When I hear things like luxury-root, pushing on with root and waste of resources, I think, for example, of the small construction firms here at home. Is it this I should say to the many Social Democratic voters in Robertsfors municipality who appreciate Degerfälts Bygg in Robertsfors, Åbyns Bygg outside Burträsk, or Jörgen Löfgren's one-man construction company in Ånäset? Four out of five jobs are nevertheless created by small businesses.

It is still a bit interesting that the Social Democrats are good at talking about pig-rut, which you did from the beginning when rut was introduced. When it became a popular reform, you fell silent. Rot was also bad before the Social Democrats took power.

During the eight years you were in power, you did not say a word. You had the opportunity to lower ROT during that time, but you did not do it. Why? I can imagine that it is because the Social Democrats have attracted middle-class voters in cities and elsewhere who actually appreciate that type of deduction. It is easy to be tough in the chamber in opposition, but when you yourself sit in government, you say nothing and do nothing about the matter. It is exactly in the same way as you talk about tax cuts, that is, in opposition how bad they are, but when you yourselves sit in government, nothing.

(Applause)

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Hanna Westerén (S)

Mr. Speaker! I thank Helena Lindahl for the questions and the allegations.

I do not intend to make an enumeration of all the fantastic construction companies that exist here on Gotland. But I can still testify that there is a widespread frustration in the construction industry, at least here at home and also in other parts of the country, regarding the small projects. There is a construction crisis, which the government is trying to cure with a little more rot, a little more of the same thing.

I do not think it is the right medicine. I believe that Sweden today needs investment support and more housing that people can live in. We need a functioning welfare state in the whole country. At my home in Visby, in Robertsfors, God knows where, everywhere, the welfare must work. But the government's medicine is more rot. It is completely unreasonable and solves nothing.

There are families with children who are practically starving, and the government talks about more rot. There is a rampant crime in the working life. The National Audit Office suggests that the rot limit should preferably be lowered; but at least evaluate the effects properly and reduce the risks of undeclared work. The government says no and continues with a bit more of the same.

This is dangerous for Sweden, and it is not the right way to go. I think it is fully relevant to use the term "fläska" because I experience that it is what is happening. The construction industry is in a total crisis. We get alarms practically every day, and almost no more multi-family dwellings are being built at all. I therefore think it is fully relevant to say "fläska" on, because that is what one does. It is more of the same.

At the same time as Swedish healthcare is on life support, we are splurging on luxury-root. It is a completely unreasonable stance for a country like Sweden where we need to build housing and roads. We cannot scatter [resources] over those who already have.

(Applause)

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Helena Lindahl (C)

Mr. Speaker! Very good! Then I expect Hanna Westerén to go home to Gotland and tell all small businesses that she wants them to get less work. That is what this will lead to in the end.

You do not need to mince words from the rostrum; de facto, quite a few of the small businesses agree with me. I return to the hypocrisy that the Social Democrats are engaging in. When you last sat in government, for eight years, you did nothing about RUT. At the beginning, you called those who worked with the RUT deduction "maids." It annoyed me just as much then as it annoys me now when you talk about "fläska på" (going all out), luxury-ROT, and waste of resources.

Four out of five small business owners in the countryside provide jobs for people all over Sweden. If Hanna Westerén has forgotten that, four out of five contribute to some kind of fat-catting, waste of resources, because they provide more jobs for the common man. It is not a question of the rich, but it is those whom you have lured to yourselves in the cities and whom you want to keep while you sit in government. It will be interesting to see if you are just as tough before the election when you say that rut and rot should be removed for the voters.

When people talk about that people are having difficulty putting food on the table, it is strange that you simultaneously contribute to raising pensions, there simply is no money, queues to healthcare and so on. Yet you talk about shortening working hours - as if Sweden could afford it. What would it cost Swedish taxpayers and Swedish exports - and ultimately all the people who need support from society to be able to put food on the table?

(Applause)

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Hanna Westerén (S)

Mr. Speaker! I must apologize for smiling. I think it is so wonderful to debate when it actually becomes ideological and when we talk about differences for real. Helena Lindahl suggests that I should go home to Gotland and tell the construction workers that they should not get jobs. I do not think that will be the consequence of Social Democratic policy.

We have advocated for an investment support. We know that investment support for multi-family dwellings provides an employment effect, and those are the jobs I would like to see.

I pointed out in my speech that climate-ROT, a reformed ROT deduction, in the event that the ROT deduction is to remain, which appears to be the forecast, must be recast. Use it for the transition to the new jobs. That is where the future lies. When the ROT deduction is to remain, it is clear that we must recast it, direct it towards energy efficiency, such as that which lowers emissions and often lowers expenses for households. That is where the jobs are.

I do not believe that a single Gotlandic construction worker will become unemployed because of Social Democratic policy. On the contrary! Investment support provides housing, and klimat-rot provides jobs. I believe that the future is red and green, and I believe it is incredibly harmful for Sweden to pump out more rot when we need more welfare, jobs, and relevant and potent measures for the Swedish construction industry.

(Applause)

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Crister Carlsson (M)

Mr. Speaker! Have you calculated, Hanna Westerén, what it actually costs to, as in your proposal, give a 50 percent rotavdrag on the energy-efficient measures, for example, geothermal heating, water-borne heating, solar cells, doors, windows, or additional insulation? What is the difference in cost for the 30 percent that the government puts forward in its proposal to renovate the entire house? There is a big difference between 30 and 50 percent. 50 percent is actually half of the labor cost, and 30 percent is naturally 30 percent of the labor costs. Has it been calculated what it costs?

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Hanna Westerén (S)

Mr. Speaker! I am almost certain that I mentioned in my speech – I hesitated a bit just there – that our proposal as it is designed today is public-financially neutral. We have seen who are the big winners in those types of reforms, and we believe that our proposal means that more would become winners in a reformed rot. It would apply to far more households than today, but public-financially neutral.

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Crister Carlsson (M)

Mr. Speaker! Publicly finance neutral. What does that mean in pure kronor and öre?

I do not think your proposal is particularly cheap either. You are pitting poor children who cannot afford to eat against the tax deduction. Why don't you abolish the tax deduction entirely, just as a member touched upon earlier?

Why did you not take these measures earlier during your eight years in government?

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Hanna Westerén (S)

Mr. Speaker! I tried to be extremely clear in my speech, and perhaps that is what has generated two exchanges of remarks for me.

We Social Democrats consider it problematic that the subsidy level in ROT is being increased. Now, Crister Carlsson speaks in his statement about a temporary increase. But I fear that it is a measure in a string of measures, which will result in a more difficult income distribution profile ahead. We must create increased economic equality, and it is completely the wrong way to go to raise the ceiling in the ROT deduction further and thereby transfer even more money to those who already have. That is why I highlight households with very low incomes, which will be squeezed enormously.

It is clear that the rotavdrag has its sides. It was originally intended as a cyclical measure. Now we have what we have, and as I said: In the case and during the time that the rotavdrag remains, it needs to be recast, because we need to lower our emissions and energy-efficientize our homes.

As far as being public-financially neutral is concerned, that figure is just as relevant to me as it is to Crister Carlsson. We know what the rot deduction costs today. If we were to use our model during the time the rot remains, it is public-financially neutral. But to increase the subsidy rate and raise the ceiling for the rot deduction, we still consider to be deeply irresponsible policy in a difficult time for Sweden.

(Applause)

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Helena Lindahl (C)

Mr. Speaker! There are not many members in the chamber right now, but it would be interesting to know how many here have ever used a "rutavdrag" or perhaps a "rotavdrag," that fatty and luxurious thing that some speak of from the rostrum.

What is the situation with former ministers in S-governments? Have they used rut and rot?

Voters might find it interesting and popular.

The fact is, no matter how much the Social Democrats try to twist and turn in the chamber today, rut and rot are popular deductions for very many Swedes today - among very many of their voters, even. But when one starts becoming a larger party, one perhaps needs to do a split when one needs to appeal to both its core voters, Mr. Speaker, and additionally the high-income and middle-class voters that one has lured in the large cities.

I also assume, Hanna Westerén, that some of those who are slightly better off are those who build on Gotland.

I would also like to say that I think it is deeply problematic, this matter of integrity. You Social Democrats sat in government yourselves for eight years—I am repeating myself now, but I actually think it is deeply offensive—and did not do a damn thing regarding either rut or rot, which you find so offensive. But immediately when you sit in opposition and between elections, the expressions come out: fläska på, not good for Sweden, and so on.

I understand that this is very difficult to listen to. People turn away here in the chamber or look down at their computers. But this is actually how it is. You have attracted very many voters who think this is a very good proposal, and now you are telling them: This is not what we want you to have.

It will be interesting to see, if it were to be the case that there becomes an S-government, whether you will raise taxes for construction workers, nurses, and industrial workers. You also say that you think it is terrible with these tax cuts, that is to say for those who have luxury incomes. But they are for middle-class voters. They are for ordinary people - such as those who actually vote for you.

Yes, I would actually like to have a bit more honesty in this debate.

Then, of course, one can discuss whether there should be an increase of the basic deduction or if it is such that parts of it should go to green investments. On that, I agree with the Social Democrats; the Center Party also thinks that is very good. But I think it is very bad that you turn your coat depending on whether you are in government or whether you are in opposition.

Finally, it is, as I said earlier, not actually the case that reality can only be seen through a Social Democratic straw in opposition when it suits. If one is honest, one should take this all the way through, I think, and even when one is in government. But it is good that we know that you simply want your voters – new voters from the cities, many of them middle-class voters whom you call high-income earners, nurses and others – to have higher taxes and furthermore not have the opportunity to make rot- or rut-deductions.

(Applause)

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Hanna Westerén (S)

Mr. Speaker! I just wonder, after this furious attack on the Social Democrats, what the Centre Party thinks about the Swedish National Audit Office's conclusions and the report that we have reason to debate today.

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

Helena Lindahl (C)

Mr. Speaker! I take the liberty of discussing a bit further, just as Member Hanna Westerén does when she talks about the construction industry and luxury and "fläska på" and other things instead of talking about the National Audit Office. Hanna Westerén will have to look at herself in the mirror if it is the case that one should only debate exactly what is written in the underlying material we have on the table, because in that case, the Social Democrats do not follow that particularly often either.

But I can say this: I absolutely think it is good that the Swedish National Audit Office has looked into this. I also think that it should be analyzed.

I think it would be unfortunate to remove this reform, because I believe it is very appreciated by many. I also believe that if one were to remove it, it would lead to much more black market work.

There is a great deal that is conditional. The National Audit Office cannot also clearly state very many things. However, I have no problem accepting what the National Audit Office says.

What I am turning against is the black-and-white rhetoric that the Social Democrats employ when it comes to this. Therefore, I allow myself to be quite ideological and black-and-white because I, together with my party, have a completely different opinion about these reforms than the Social Democrats do. I also think it is appropriate to point that out.

The speech at riksdagen.se, in Swedish (opens in a new tab)

Hanna Westerén (S)

Mr. Speaker! I came to the chamber today to debate this report, which I believe concerns the Swedish National Audit Office's conclusions on the renovation deduction.

What I am reading is that the Swedish National Audit Office warns that there could be significantly more black market work in the renovation industry. It is also said that they do not see the increases in the labor supply that were perhaps the intention with the renovation deduction.

This is what is happening in the construction industry today. I believe that both I and Helena Lindahl meet many construction workers but also developers. There is an enormous problem with crime in the working life in Sweden today. We have amounts of unserious actors who exploit people and who bleed our tax system dry – funds that we could use for our common welfare.

I mean that this is a problem. I sincerely hope that Helena Lindahl considers that people getting hurt at work and tax evasion are problems that we need to address. That is what the National Audit Office is telling us: Do something about it! Whether the rotavdrag should remain or be increased, do something about undeclared work!

But I hear nothing about it. I don't understand - how can it not be a problem that the Swedish tax system is being exploited by unserious actors? Helena Lindahl made a list of fantastic companies in Robertsfors. For them, if they are serious, it is indeed a huge problem that we have so much fraud in the construction industry. Or are we living in different realities? I don't understand.

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

Helena Lindahl (C)

Madam Speaker! It is interesting that Hanna Westerén says that she is sticking to exactly what is stated in the underlying document we are to debate today.

Here, people are talking about welfare crime and that the Swedish tax system is being exploited. Does the member really mean, can I ask rhetorically, that it is the rot deduction and also rut that contribute to welfare crime in Sweden? It is well significantly larger than that. If Hanna Westerén does not have insight into what welfare crime looks like today, I do not know what it is we are debating at all. Do not try to reduce the large scale of welfare crime to depend solely on rot! So it absolutely is not.

I can tell a story. When my mother's friend came here from Poland – my mother is also from Poland – in the early 80s there were not many jobs to apply for. She needed to scrape something together, and back then she worked illegally. She cleaned illegally. She cleaned stairwells. She got a lot of pain in her back. She received very little pay. The day rut was introduced, she had indeed gotten a job, but she said it was positive. Finally, others coming after her from many other countries would be able to avoid working illegally and suffering as she had done, and which actually many do today through illegal work.

I do not know if the member believes that if one simply removes the interest deduction and the renovation deduction, all welfare crimes and the tax system's bleeding will simply go back. So that is not how it works. This is one of several things.

Yes, I absolutely think that one should analyze and get to the bottom of what the National Audit Office says. But I simply do not agree with taking it to such extreme lengths as the member of parliament does.

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

Ilona Szatmári Waldau (V)

Madam Speaker! The National Audit Office draws the conclusion in its report that it would be cost-effective to lower the ceiling for the rot deduction and notes that the self-financing rate for the deduction is very low. It costs more than it is worth.

The Swedish National Audit Office's report also shows that it is significantly more common to utilize the rot deduction among households with high incomes than among households with lower incomes. More than half of the total deduction amount was used by the 20 percent of households that had the highest incomes. These are people who have the means to pay for it themselves, without receiving tax subsidies. At the same time, rental apartments are not covered by rot. The housing that truly has a need for renovation thus receives no subsidies, but the person who wants to change the appearance of their already renovated condominium can do so with a tax subsidy.

The increase that the Riksdag recently decided on, which is precisely opposite to the National Audit Office's recommendations, primarily benefits high-income earners in the metropolitan areas, who are the ones who mainly utilize the rot deduction. Ten times more people receive rot deduction in Danderyd than in, for example, Åsele.

It is not only rural residents who subsidize city dwellers, but it is also low-income earners who, with their taxes, subsidize high-income earners' construction of balconies and replacement of functional kitchens. In fact, the increase can only be fully utilized by those who earn 58,000 or more per month. Here we can truly speak of subsidies and grants for those who earn the most. Furthermore, I note that 58,000 is an amount that most of us should be able to, but Hanna Westerén received no answer when she posed her question about it to the majority and the members of Parliament.

We can also observe that the increase that the Riksdag has made is expensive, inefficient, and a waste of limited resources. In 2023, the state spent 11 billion on subsidizing the housing renovations of urban residents. With the increase that has been decided and which will come on July 1, that sum will become even larger. These are billions that would do much greater good in welfare.

The Swedish National Audit Office states that the deduction for renovation, in its current form, does not generate sufficiently large tax revenues through reduced undeclared work and increased labor supply to justify the state's costs for the deduction. We have had many interesting exchanges of remarks on this, so I will not go into it further.

I can, however, state that the Swedish National Audit Office says that while households have reduced their demand for black services, at the same time the proportion of black wages has increased within the construction industry. The development is particularly clear in the small construction companies, which are also those that perform the majority of all construction services. What you and I believe are white wages are in fact black wages when the construction company we hire in turn can hire black labor via subcontractors or themselves without us knowing it.

I understand that in some cases subcontractors were needed, but it is extremely difficult for an individual to follow and control that tax is paid at all levels. Therefore, we also need to review and limit the number of subcontractors in the construction industry and other industries.

We need to introduce better control of who performs the work. Companies performing work with a rot deduction must today report the deduction for payment to Skatteverket, but they do not need to state who or which individuals have performed the work. Therefore, Vänsterpartiet has proposed that companies requesting a payment from Skatteverket within the framework of the rot system must also provide information on which employees have performed the work. This would give Skatteverket better conditions to detect cases where black labor has been used in connection with a rot service.

Why the majority holds on to a system that does not counteract undeclared work is a mystery, especially as undeclared work is increasing within the construction industry. This could be addressed, but the right-wing majority chooses to put more money into the system and favor both the black labor market and high-income earners.

Madam Speaker! The proposal for a raised ceiling for the rotavdrag is justified, among other things, by the desire to promote employment in the construction sector. I agree that now that construction has slowed down significantly, the construction industry needs further support, but to support the construction industry with expanded rotavdrag is completely the wrong way to go. It is not high-paid renovations in big cities that will keep the construction industry up, but rather that we get construction moving again and that regions and municipalities can carry out necessary investments - investments that are currently being pushed into the future due to the starved budget that they have been given by the right-wing majority. We need to stimulate housing construction, not private individuals' renovations.

Vänsterpartiet has proposed strong state support to keep construction and employment going - a support that can be used both for subsidized employment and so that municipalities and regions can advance investments. So we save the construction industry, not through tax credits.

With this, Madam Speaker, I move for approval of the Left Party's reservation of motive.

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

Annika Hirvonen (MP)

Madam Speaker! Today we are debating the Swedish National Audit Office's report "Black on white - the costs and effects of the house renovation deduction," and rarely has anything been so clear, black on white, as that the house renovation deduction is expensive and ineffective. The Swedish National Audit Office recommends that the government lower the ceiling for the house renovation deduction; the government does the opposite. It was not many weeks ago that we here in the chamber had a discussion about the government's proposal to go in the exact opposite direction compared to what the Swedish National Audit Office's review recommends.

What is it then that makes the Swedish National Audit Office draw the clear conclusion that the renovation deduction ceiling should be lowered and not raised? Well, it is simply that the renovation deduction has not achieved the purposes that have been sought, that it has not financed itself, and that it has also not led to more people working instead of doing renovations themselves.

This was the reasoning the previous government had when it introduced the rotavdrag. The idea was that doctors would treat more patients if it became cheaper to hire tradespeople. Tradespeople have been hired, but more patients have not been treated. This is the Riksrevisionen's conclusion.

There was also a thought that one would get rid of the black money and that ordinary people would pay white instead of black when they hire tradespeople. This has indeed happened, which is good, but has there been less black money in the construction industry? The National Audit Office answers no, rather the opposite. The black money has only moved further away from the buyers. This is a gigantic problem.

Madam Speaker! I would still like to say that it is positive that everyone in the chamber says that they are committed and want measures against illegal work and black wages in the construction industry. Now we hope that the government acts, because so far we have not seen it. So far we have seen a raised ceiling for the rotavdrag, which means that there will be more tax money in the system, which now gets increased black wages.

Madam Speaker! We in Miljöpartiet have from the start had many views on how the renovation deduction has been designed. It is only those who own, not those who rent, who can use the renovation deduction. The renovation deduction cannot, for example, be used for renovations in a rental apartment, and schools cannot utilize the deduction when they replace their ventilation and improve the environment for the students.

We in Miljöpartiet have also had views on the fact that it is being made cheaper to perform not only necessary renovations but also renovations that are actually not needed. Tax money is being contributed to encourage people to replace fully functioning kitchens and tear out perfectly usable bathrooms at a lower price, where we taxpayers cover parts of the cost. This is irresponsible not only economically but also in terms of resources, from an environmental perspective.

We think that instead we need to find models that encourage what is good for both the climate and for people, and in that regard, we think it is wise that several parties are now moving towards rather providing support for, for example, energy efficiency measures, which are both important in the climate transition and can make it easier for ordinary people to manage their electricity bills. We think this is reasonable to subsidize, but we probably do not think that we should continue to provide grants to renovate fully functioning kitchens, especially not in southern Spain.

Madam Speaker! Today we only have to decide whether to table the important and unusually clear report from the National Audit Office, but for the Green Party, I can say that we are not tabling the discussion. It is obvious that the governing parties and the Sweden Democrats have not understood the message. We will need to return to this, because tax money must be used wisely. We cannot afford everything. We need to prioritize, and here the government prioritizes - against all reason - by going against clear recommendations, increasing the deduction for renovation, and giving more money to the 10 percent who already have the most.

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

Crister Carlsson (M)

Madam Speaker! I would like to ask a question to Member Hirvonen. The Agency for Growth Policy Evaluations and Analyses has shown that employment in the niche for root work would have been lower without the root deduction, with 11,000-16,000 more unemployed. One can then wonder: What is the cost of 16,000 unemployed craftsmen?

The speech at riksdagen.se, in Swedish (opens in a new tab)

Annika Hirvonen (MP)

Madam Speaker! Yes, Crister Carlsson, one can wonder what the cost of that is. One can also wonder what 16,000 tradespeople could do if they were not busy, for example, renovating fully functional kitchens. How many more rental apartments at affordable rents could they have built instead? How many more heat pumps could have been installed if we instead had stronger incentives for that?

We in Miljöpartiet are not saying that the rotavdrag should be abolished. We do not need to throw the baby out with the bathwater, but the bathwater is murky and needs to be changed. We need another system with different priorities where we ensure that the tax subsidies actually lead to many benefits, such as climate transition and economic equality. Here, the rotavdrag does not meet the criteria, because the rotavdrag is rigged so that the richest get the most.

The latest increase only gives more to the richest 10 percent. I actually think it feels incredibly repulsive. We receive reports of increased child poverty and single mothers who cannot afford to eat their fill at the end of the month, and at the same time, we who have among the highest salaries are to receive more in tax credits. I think it is wrong. And it is actually not only Miljöpartiet, Socialdemokraterna and Vänsterpartiet who think so, but the independent body Riksrevisionen says it in black and white: Do the opposite!

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

Crister Carlsson (M)

Madam Speaker! I also have a question here. What does Miljöpartiet think instead, and what does it cost?

We cannot, in any case, turn a blind eye to the fact that 16,000 craftsmen would have become unemployed, because that is what is being said. It is not about them working somewhere else, because they certainly would have done that. It is a large cost.

Then, when it comes to the renovation of fully functional kitchens, bathrooms, or whatever it may be, I wonder what is meant by fully functional bathrooms and kitchens. There is actually a need for maintenance during the time one lives in a house. What constitutes a fully functional kitchen is a rather relative opinion when it comes to the condition of a house. Many say that one must have maintenance during the time one lives in a house, for example of the ventilation, which I mentioned in my opening remarks. Without good ventilation, there will be moisture in the house, and those who live there will have health problems. What does that not cost?

I think the rotavdrag that we have today is a good measure. We must protect our houses so that the environment will be in good shape in the future. If we do nothing about the houses, we will eventually have to demolish them and build new ones. What is the environmental gain in that?

The speech at riksdagen.se, in Swedish (opens in a new tab)

Annika Hirvonen (MP)

Madam Speaker! I think this is an interesting discussion. It feels a bit like some kind of deliberate misunderstanding here – that we in Miljöpartiet would be against maintaining houses. That is not what this is about.

Now Crister Carlsson does not have the opportunity to answer questions, but he can request the floor again and explain if he agrees with Miljöpartiet that we should not give tax reliefs for completely unnecessary renovations that are only about thinking it is the wrong color or that one has a different taste. The tax deduction has no barriers.

We need to move towards a circular economy. We need to promote repair. We need to promote that we do not wear out and throw away. If one could "tweak" the tax reduction for renovation, it could contribute to the transition with a focus on, for example, energy efficiency, which is very important and valuable.

If we are to talk about ventilation: Yes, good ventilation is very important, but the root deduction cannot be used to provide our children with good ventilation in their schools - and believe me, there are many classrooms that suffer from deficiencies there and would really need state support. Those who live in rented apartments also cannot receive support to get better ventilation.

We in Miljöpartiet have on various occasions been very constructive and presented many different ideas for how the expensive reform that is the renovation deduction could become smarter, better and lead to more benefits. It is both about subsidies to ensure that we manage the green transition and about it being fair. It should not only be for those who earn the most.

Our priority one is to now actually listen to the Swedish National Audit Office. We said no to a higher ceiling for ROT, and the Swedish National Audit Office says: Lower the ceiling!

The deliberation was hereby concluded.

(Decisions were made under § 10.)

The speech at riksdagen.se, in Swedish (opens in a new tab)