Response to interpellation 2022/23:265 on opportunities for the Enforcement Authority to reduce debt in Sweden
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 possibilities for the Swedish Enforcement Authority (Kronofogden) to reduce indebtedness in Sweden. M argues that fiscal policy must be responsible in order not to fuel inflation 1 and that the Swedish Enforcement Authority is already working to counteract over-indebtedness 1. M believes that the government's budget measures for the guarantee pension, student support, and housing allowance help those with the smallest margins 2 and that resources for Bostad Först are important for homeless retirees 2. M also emphasizes the need to handle gambling debts and shopping loans 2. S argues that the government must understand the seriousness of the situation where households are being pressed hard 3 and criticizes tax cuts for high-income earners 3 4. S believes that the government should increase resources to the municipalities to strengthen counseling.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! Ida Ekeroth Clausson has asked me in what way I and the government intend to act so that the Swedish Enforcement Authority can better prevent the high level of indebtedness in Sweden, and if I intend to take any measures within my area of responsibility to reduce the increased indebtedness in society.
The economic situation with rising inflation and interest rates entails challenges for households. The most important thing is that the fiscal policy is responsible and does not drive up inflation. In order to counter even higher inflation and thus even tougher economic challenges, the proposals that are developed shall be weighed against the economic situation and the room in the public finances.
From the Swedish Enforcement Authority's instructions, it appears that one of the authority's tasks is to counteract over-indebtedness. The Swedish Enforcement Authority's possibilities to prevent high indebtedness are directed at measures that can influence a decision before or in connection with a person becoming indebted. It is a long-term work where the Swedish Enforcement Authority, often together with for example municipalities, authorities and organizations, works to increase knowledge among different target groups who have or risk facing economic problems. The Swedish Enforcement Authority also works together with others to increase its own knowledge of what the indebtedness looks like among, for example, young people. Increased knowledge of different circumstances in connection with indebtedness is needed to know what type of measures are of greatest help for persons who risk not being able to meet their economic obligations.
An investigation is now working to produce proposals for measures to counteract people taking out credits that they cannot repay. The investigation is also considering measures for how those already over-indebted can reduce their debt. The proposals shall be submitted by June 29, 2023, at the latest.
Regarding the government's second measures to reduce debt, one such measure is to protect families with children with weak finances against the recent sharp price increases. The government has already extended the temporary additional grant to families with children receiving housing allowance until 30 June 2023. The government has allocated 520 million kronor for this. A proposal to extend and simultaneously increase the temporary additional grant in the housing allowance during the period from 1 July to 31 December 2023 has been referred.
The first electricity support to households in electricity areas 3 and 4 for the period from 1 October 2021 to and including 30 September 2022 has now reached most households. The next support, which covers the entire country, is planned to be paid out during the spring. Also, those households that use gas along the west Swedish natural gas system, just over 27,000 household customers, will receive support during 2023.
The Government is now working on the upcoming spring revision of the budget and the budget for 2024. We will return to any other relief for households in these contexts.
Ida Ekeroth Clausson (S)
Madam Speaker! I thank the Minister for Finance for the answer!
There is no doubt that the fiscal policy in this situation needs to be responsible and that there are limits to how far the government can compensate households for inflation. This does not, however, mean that the minister can sit idle.
The indebtedness in today's Sweden is increasing. The economic crisis must not lead to increased healthcare queues, to mothers being unable to put food on the table, or to pensioners being unable to afford their rents. The government must understand the gravity of today's situation. Margins that were previously small are now exhausted.
In yesterday's news, it was reported on the connection between ill health and economic vulnerability, on how the life expectancy of low-educated women is decreasing, and on how the body breaks down when one cannot afford to buy nutritious food. Today, the news reports on the major cuts that need to be made in schools due to the poor economy. What will this lead to for the indebtedness in society in the long run?
Just today, more and more Swedes are being pressured incredibly hard to make their finances work. It has not been many months since the current government parties went to the election on a promise to compensate for everything from high food prices to increased fuel prices. We remember that the government raised the threshold for state tax and in that way protected the country's high-income earners from inflation. It was 13 billion that could have gone to welfare. The same protection was not given, however, to the households that have the smallest margins; instead, they are expected to take the hit to keep down inflation in the Moderaterna's Sweden.
As I wrote in the interpellation, it is primarily people with low incomes who have payment problems. Families with children, pensioners, and single-person households are now being pressured in a way we have not seen in decades, and the risk of debt is spreading quickly to more people as inflation does not fall while interest rates continue to rise. Many are the stories of nutritious food and warm clothes being opted out of so that housing costs can be prioritized and they are not forced to move. I see it as a great risk that people are forced to incur debt beyond their ability to pay in order not to have to leave their homes. It is not worthy of Sweden.
After hearing the answer, I must still ask if the Minister for Finance understands what reality looks like for very many? Does the Minister for Finance agree that there is an imminent risk that the debt will increase in the near future and that more must be done to prevent it?
Finansministern Elisabeth Svantesson (M)
Madam Speaker! Thank you, Member Ida Ekeroth Clausson, for an important interpellation and very good questions to me!
These are truly questions that concern and cause worry. We know that even before inflation hit with full force at some point in late 2021, many people had over-indebted themselves. It can start with a small loan, and then it grows like a snowball. It is not all too rarely about gambling debts, and it concerns especially young men who play far too much and who think that next time they will win and be able to pay off their debt.
Indebtedness can grow for many different reasons, but it is very clear that many people who already had a tight economy and who are now also affected by a high inflation, as the member pointed out, are now finding it even tougher. Therefore, there are reasons for the political side to facilitate things for those who have it the toughest and, of course, to simultaneously ensure that all those authorities and organizations that work with these issues have the tools and muscles to do what is needed so that people do not get stuck in over-indebtedness.
Madam Speaker! It can be good to say that just as there are many households that are now struggling, there are other households that manage this quite well. High indebtedness does not have to be a problem; it is not for everyone. But for many it is a problem, and it is tough both because of inflation and because one has taken on too large debts.
When it comes to policy, we are doing important things in the budget for this year, which the member did not mention: The guaranteed pension increases by 850 kronor a month, and for those who are studying, the student grant increases by up to a thousand kronor a month. The housing allowance that we have in the budget this year is extended and strengthened and will make a big difference for those who have the very smallest margins.
The questions also concerned the Swedish Enforcement Authority's task. The Swedish Enforcement Authority has the task of precisely preventing over-indebtedness. It is one of the important missions that it has. Whether that mission needs to be changed, sharpened, improved, or strengthened, we can return to later, but I see that the Swedish Enforcement Authority is currently working together with many other authorities in a quite effective and good way to inform, for example, households about challenges and problems with different types of loans.
I am glad that the previous government regulated sms-loans in a good way. It was completely horrible about ten years ago when one could take sms-loans so easily and suddenly find oneself in a debt trap that was completely impossible to get out of.
There is an important issue. I see how many are struggling, and I know that many have extremely small margins. They are in my vicinity, and they are surely among you. Many of us are privileged, while others have it much tougher. My focus is both to fight inflation and to support those who have it toughest, but it is also, regarding the issue that the member has raised, to ensure that the agency I am responsible for, the Swedish Enforcement Authority, works extra hard on this issue together with other agencies and organizations in this time when very many are struggling.
Ida Ekeroth Clausson (S)
Madam Speaker! In country after country, governments are acting and introducing crisis packages, but not here. The Social Democrats have for several months called for decisive action from both SD and the right-wing government. We have demanded crisis talks on household finances and presented proposals such as an increased child allowance, an extension of the increased housing supplement for families with children, an electricity bill emergency, and most recently a price commission to prevent unreasonable increases in food prices.
It is certainly welcome that there are additional grants for families with children receiving housing allowance, but I wonder why the government did not strengthen all families' finances with a temporary increase of the child allowance this winter, as we Social Democrats proposed, and why the government did not agree to an electricity bill emergency.
We must be honest and call the government's electricity support what it has been: a failure. It took too long, half the country still does not know when they will receive it, and it has been a blunt instrument that in no way distinguished between those who have a great need and those whose electricity costs have not been so large. Furthermore, the delay of the electricity support has rather driven up indebtedness instead of reducing it.
The Minister, in his answer, raised the preventive work in the municipalities. Important work is being carried out there, for example between social services and landlords to reduce evictions, and there too, the Enforcement Authority has an important mission to support local cooperation.
Since the Minister himself, in his reply to the interpellation, points out the municipalities' important role, I wonder if the government is prepared to increase resources to the municipalities so that they can strengthen their budget and debt counseling and their consumer counseling, something that is truly needed in these turbulent times. When it is such times, which also affect the municipalities, there is a risk that they will reduce resources for just such things because the government, in turn, has chosen to save on the resources to the municipalities.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! I do not know if the 55 billion that are now being paid out to both companies and households, many of which are struggling, are small resources. I believe that most can agree that it is very large resources that are coming back, which is completely reasonable because it is households and companies that have paid in the capacity fees. It will help many.
Many who are now receiving electricity support are struggling. It could be a retired couple living in a small terraced house with direct electricity and who do not have the possibility to install any other type of heat source. In that case, the support provides relief.
Madam Speaker! This is a difficult time for many, and what may have been difficult before the crisis and what is now hitting us in the form of a recession and inflation becomes harder, especially if one has small margins.
I will briefly focus on one issue. It concerns all people who today do not have a job of their own or a salary of their own. I see this as the government's absolutely most important issue even here. Many have ended up outside and have perhaps lived on activity support or other means for a long time. People have become stuck in the gears of the Public Employment Service and receive no help, neither with activity nor with getting closer to the labor market. On the contrary, the more years pass, the further away one gets.
That people have been left in exclusion with small margins and have not received help to get in is one of the absolute most capital failures during the last decade. One might wonder what this has to do with this debate, but it has everything to do with it because those who live on very small margins and do not receive help to return to the labor market and get their own salary are in an incredibly vulnerable situation. In that, the previous government has a very large responsibility.
The most common activity or intervention for the long-term unemployed at Arbetsförmedlingen is, therefore, no intervention at all. In the years ahead, we will place a major focus on ensuring that more people receive work, an internship, a new-start job or education and actually receive a salary of their own.
Finally, regarding the Swedish Enforcement Authority, we naturally have close contact and dialogue with the agencies we govern. There is great competence among the employees within the authority, and if more tools and more help are needed, we will, through our dialogues, naturally ensure that they receive all the tools they need now when many people are having a tough time.
Ida Ekeroth Clausson (S)
Madam Speaker! Private individuals' debts have reached record levels and continue to increase, this even before we fully know how inflation, interest rate hikes, and a feared increase in unemployment will hit households in the coming years.
Many Swedes live under an economic stress that is so serious that they even cut back on food in order to be able to stay in their homes or avoid being indebted to the Enforcement Authority. The government needs to do more to break this development. Those who have the smallest economic margins should not have to take the hardest hit from the inflation fight while high-income earners are compensated with tax cuts.
The Social Democrats argue that the government must act through, among other things, the measures I previously outlined, and in that regard, the Swedish Enforcement Authority's mission to prevent over-indebtedness is extra important. If the government does not act now, the consequences of the economic crisis that many households find themselves in risk persisting and deepening in the foreseeable future.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! Many thanks, again, for the questions and the debate! It is very important for many reasons. There are many who are struggling and who are over-indebted, for various reasons. The member highlighted an important part, that because inflation is so high, prices and interest continue to increase. Everything just becomes more expensive, and therefore it is, as I heard the member was also touching upon, important to combat inflation.
When it comes to vulnerable groups, Madam Speaker, I want to mention the work being done all around Sweden for homeless pensioners. Here in Stockholm, there are far too many elderly people who are homeless, an issue that I have been involved in. Therefore, we allocated resources in the budget for what we call Housing First, so that more people can get their own housing and not have to sit on the commuter train in Stockholm or live under a bridge or somewhere else around Sweden. It is not worthy of our country.
Another part of the budget concerns the housing allowance for families with children. Now that we are raising the level and extending the duration, we know that 60 percent of those receiving the support are single mothers. The 40 percent increase will make a difference, and it is also an important measure so that one, for example, does not end up in a debt trap.
Then there is another issue that has been mentioned earlier, namely that many get stuck in gambling debts, often young men. But also many young girls or women who belong to the so-called Klarn generation shop and feel that it feels far away until they need to pay, and suddenly they are sitting there with high debts. All of this we need to work on on many different fronts with authorities and organizations and in politics.
I thank you for the commitment and wish you a pleasant weekend.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.