Response to interpellation 2022/23:79 on child allowance
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
M argues that the government has an incorrect prioritization by lowering the tax for high-income earners instead of increasing the child allowance by 200 SEK 1 2. M considers that the child allowance has a good redistributive effect and that many families with children are under economic pressure 1 2. M emphasizes that the government has instead chosen a targeted reform by extending the temporary supplementary allowance to families with children receiving housing allowance in order to reach the most economically vulnerable 3 4 5 6. M considers that their policy is characterized by responsibility 6 and that the government is taking strong measures by directing resources to the families with children who have it toughest 7. M considers that S's proposal is more expensive and less targeted than the government's 7. M emphasizes the importance of jobs and that it should pay to work more 7. M criticizes S because the government spends 13 billion on tax cuts for high-income earners instead of improving the child allowance 8.
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 Anna Tenje (M)
Mr. Speaker! Mikael Damberg has asked the Minister for Finance why the Minister, in the tough economic situation, does not choose to prioritize an increase in the child allowance. The work within the government is so distributed that it is I, as the Minister for Children and Social Insurance, who shall answer the interpellation.
The government has taken over the responsibility for a country that finds itself in the midst of several parallel crises. One of these crises is the recession that Sweden now faces, while many people and companies are subjected to dramatic cost increases through high inflation and high energy and fuel prices. Families with children, in particular, are hit hard by the economic situation.
The Government is now acting through the budget that the Riksdag recently voted through with responsibility for Sweden, the economy, and the households. In order to protect families with children who are already struggling in the near term, we have chosen to extend the temporary supplementary grant to families with children receiving housing allowance until June 30, 2023. The supplementary grant is provided monthly with an amount of 25 percent of the preliminary housing allowance, that is, at most 1,325 kronor per month. The average amount is estimated to be approximately 700 kronor per month during the period in question. The housing allowance constitutes a targeted benefit to reach households with weak finances and to provide extra resources to economically vulnerable households with children.
Furthermore, the unemployment benefit and the activity support are maintained at the same higher level as has applied during the ongoing covid-19 pandemic, and benefits to guaranteed pensioners and student grants for students are increased by 8.7 percent. From 1 January 2023, the tax on fuels was also lowered, and the flat-rate amounts in the travel deduction were increased. The planning is also that the electricity support to households will begin to be paid out starting in February 2023. Taken together, these are powerful but well-balanced measures to support Swedish households in a difficult time.
The threshold for state income tax has been adjusted upwards by 2 percent plus inflation every year since 1991. It is a good thing that the threshold is automatically adjusted. Otherwise, more and more people would pay state income tax every year. Without the adjustment, approximately 1 million Swedes would face a tax increase in an already strained economic situation.
Mikael Damberg (S)
Mr. Speaker! I thank Anna Tenje for the answer to the interpellation.
I wrote the interpellation because we knew that this winter would become very tough for very many households. We know that the weeks after Christmas and New Year are among the most difficult weeks of the entire year. Now, additionally, the electricity bill has plummeted for very many households across Sweden, and it has been a shock.
We can observe that there are very many families with children who are now being pressured financially by this situation. And that is no news. The Government knew when it presented its budget in the autumn that we would most likely face high electricity prices and high inflation. We have now seen that food prices have soared, and we see that inflation will be very painful for many households.
What I mean is that it feels as if the government has completely forgotten the many families with children who are having a tough time this winter. This includes, among other things, what is mentioned in the interpellation response, the promised electricity price support which was first said to arrive somewhere around November 1 and then well before Christmas. Now, many are waiting for this support. If nothing unforeseen happens, as it is called from the government's side, it is supposed to arrive in February. Now, however, we were told yesterday by Försäkringskassan that quite a few will receive it in March. It is constantly being pushed into the future.
Does the government not understand what reality looks like for ordinary people who have to pay both the rent, the electricity bill, and the food? Does one not realize that families with children risk being hit very hard at this time?
Why am I asking a question about specifically the child allowance? Well, it is because we know that the child allowance has a very good distributional policy effect. We know that it captures very many child families who are having a hard time. By raising the child allowance, as we had proposed in the budget, by 200 kronor per month during these winter months, one would reach ordinary child families across the entire country but above all those child families who are having it extra tough with their finances.
I have noted that more and more municipalities are now reporting, Mr. Speaker, that school meals are being consumed to a greater extent. It is seen that the children eat more on Fridays and on Mondays. It may seem good that they eat the school meal, but it is also an expression of that their families are incredibly pressured and that the children do not feel that they get enough food in their own family. I think this is a very serious issue.
I still do not understand how the government could come to the conclusion that this year they would choose to lower the tax for those with the absolutely highest incomes by 13 billion kronor. It means that a person who earns over 70,000 kronor gets a tax reduction of approximately 1,000 kronor a month. The government, however, did not have the means to improve things for all families with children by 200 kronor a month during the worst months this winter. It is a flawed prioritization that shows that one does not understand how serious the situation is for many families.
200 kronor may not sound like much for a member of Parliament or for a minister. But for those who have the absolute smallest margins, these 200 kronor a month can be decisive for the children to be able to eat their fill for the whole month.
Caroline Högström (M)
Mr. Speaker! The Social Democrats are trying here to mislead with their high-toned rhetoric regarding a certain price indexing, in this case the break point for state income tax. I do not know how many contributions I have heard in this chamber and seen in other contexts where one tries to paint a certain picture of high-income earners, while we know that the Social Democrats themselves have hardly proposed to remove this price indexing. Furthermore, they themselves have made similar decisions during their time in government.
I have read Member Damberg's interpellation a few times to try to understand what he means. What does he want to achieve, besides some cheap points? Does Member Damberg mean, since he opposes that the child allowance is not adjusted upwards, that the Social Democrats now also want to index the child allowance? It is a benefit paid out to 1.5 million guardians, and it would be a rather expensive reform. One naturally becomes curious about how they have planned to finance the reform and how they justify this type of cost increase. I simply cannot interpret the interpellation in any other way.
Mr. Speaker! This shall be set against the government's proposal and the budget that the Riksdag adopted in the autumn. Instead of a sweeping, general increase of the child allowance, the temporary supplementary allowance to families with children receiving housing allowance has been extended. It is an allowance that reaches those who are most economically vulnerable and in real need of support at this time. It is also responsible from an economic aspect, where we are careful with tax funds and direct our allowances in a precise manner.
Mr. Speaker! Minister Anna Tenje has in a meritorious way described the trade-offs that underlie the proposals and why accurate policy is important. I cannot, however, overemphasize the importance of strong accuracy in our subsidy systems, especially in the economic times we are in right now.
I know what I would choose if one were to weigh the two proposed reforms against each other – a general increase in child allowance or a targeted reform that reaches those who are most economically vulnerable.
Statsrådet Anna Tenje (M)
Mr. Speaker! I would like to thank Member of Parliament Caroline Högström for the contribution.
Member of the Government Mikael Damberg asks whether the government knew or did not know how tough and difficult the economic winter would become. The answer to the question is, of course, that we were very much aware of it. Precisely for that reason, we also presented a budget to the Riksdag, which was adopted in the autumn, where the distribution profile is such that the groups with the lowest incomes benefit the most.
The government has now received the trust of the Swedish people and a mandate to begin the work of restoring the work line in Sweden. We will do this step by step, successively, all the time. The best insurance against economic exclusion and economic crisis is, quite clearly, to have a job to go to.
But here and now we find ourselves, just as both Member Högström and the interpellor describe, in a situation where the costs for electricity, fuel, and food are rapidly escalating. There are many households that are having an extremely tough time right now. In that case, it is a matter of prioritizing and ensuring that our common resources are directed to the families who are having it the toughest. It is the economically vulnerable families with children. It is they who need to manage their increased living costs.
There is no other proposal from the Socialdemokraterna that would make it better, simpler, or in that respect more accurate than the very proposal that the government presented in the budget and which was adopted by the Riksdag. It concerns an extension of the temporary supplementary grant to families with children receiving housing allowance. It is significantly more accurate than the increase of 200 kronor for three months that the Socialdemokraterna proposed.
Of those affected, almost 80 percent belong to the tenth that has the lowest economic standard. Collectively, 92 percent of the most affected will be found within the fifth that has the lowest economic standard.
The measure also primarily benefits single women, who make up 58 percent of the recipient households that our proposal is directly aimed at. Among the adults who receive the support, women will on average receive an increase in disposable income of approximately 2,800 kronor during the current half-year. For the men, the equivalent is 1,900 kronor. These are extremely important additions to the vulnerable households. It is a part of all households with children, but it is the households that have the worst conditions.
Mikael Damberg (S)
Mr. Speaker! It is an interesting and illuminating debate. The Moderate member of the Riksdag asks the question: What do you mean? Would you like to increase the child allowance? Yes! That is exactly what would be needed to reach the groups that are having a hard time in this period of crisis. Ordinary families are currently finding it difficult to pay for both the electricity bill and food.
Then comes the discussion about having a more accurate measure which involves temporarily increasing the housing supplement for families with children. That is very good. It is an extension of what we proposed in previous years. It is very good that one extends a Social Democratic reform. But it does not answer why the government chooses to ignore families with children when it has the means to invest 13 billion kronor on them in our country that earns the most.
The Minister speaks about the distribution profile in the budget. It is quite interesting. It is bold. The examples that exist of the distribution policy in the budget being good are namely that one maintains our unemployment insurance increase, that one implements the guaranteed pension increase that we pushed through in the Riksdag before the election and which the Moderaterna opposed, and that one invests in those families with children who are doing the absolute worst. That is what saves the distribution policy in the budget.
But the distribution analysis that the government has presented does not include the large tax cut that we are discussing today. Zero percent of the tax cut that applies to adjusting state income tax goes to those who have it toughest in society. It only goes to those who have over 50,000 in income. A person who earns 70,000 a month thus receives a tax cut of 1,000 kronor a month in a situation and a period where families with children are struggling to manage the expenses for clothes, food, and not least energy.
I think it would have been appropriate if the government could admit that they forgot to invest in the families with children. They are having a very tough time today. And they still have not seen the electricity support that is to be paid out. They also voted no to the electricity bill emergency, which would have made it possible to split the electricity bills while waiting for the electricity support. They do not realize that the families with children are currently under great economic pressure.
The cost of raising the child allowance by 200 kronor per child during the winter months is almost one-tenth of the cost that the government incurred in lowering the tax for those with the highest incomes in our country. It is distribution policy going in the wrong direction. Above all, it is not what is recommended to meet an inflationary economy and manage tough times. Then one must be able to prioritize groups that have it tougher than others and who actually have concerns.
That we are now receiving more and more reports from school kitchens across Sweden that school meals are being consumed to a greater extent than before shows that this is real for very many families with children in our country. I regret that the government does not see that families with children are now very economically vulnerable. But it also shows that one is not quite living in the reality that one is tasked to handle.
Caroline Högström (M)
Mr. Speaker! Since this is my final contribution in this debate, I would like to take the opportunity to thank Member Damberg for submitting the interpellation to Minister Anna Tenje. It shows with all desirable clarity the difference between the Social Democrats' and the government's policies. This also applies to the symbolic politics that one often engages in when denouncing the price indexing and the raised threshold for state income tax. At the same time, we know that one in four midwives and three in ten police officers are affected by it.
One also launches a lance for a temporarily increased child allowance, which I am certain is paid out in full to all guardians regardless of income. To use Damberg's own rhetoric, I can say that it is not parents like myself or Member Damberg who need support in a difficult time, but families living in economic vulnerability.
Just as Social Insurance Minister Anna Tenje highlights in her response, it is important to be accurate with reforms and measures in a tough economic situation. The extension of the temporary supplementary grant to families with children receiving housing allowance is exactly that. It means support for those who are economically vulnerable.
Mr. Speaker! I must thank the Minister for Social Insurance for the answers in the debate. She clearly put her finger on what Moderate policy is in my opinion - responsibility.
Statsrådet Anna Tenje (M)
Mr. Speaker! The Government is well aware of the tough and harsh economic reality that many Swedish households are now living in. Precisely for that reason, we are taking strong measures to support households in a difficult economic time. At the same time, we need to be restrained when it comes to inflation, so that it does not result in stagflation instead.
There are many balls to keep in the air at the same time. Precisely because of that, it is extremely important to target the economic proposals and the proposals that are to support the households we are now talking about particularly well and particularly much. Instead of raising the child allowance by 200 kronor for three months while simultaneously raising the tax for those families by 1,000 kronor - taking with one hand to give back with the other hand 200 kronor for three months - we have chosen to invest our money and the economic resources we have in the families with children who are currently having it the toughest and most difficult.
They, often single women, who live with several children and who are struggling from many different perspectives, may perhaps particularly benefit from this temporary increase of the housing allowance.
The reform that was pushed through was social democratic. Therefore, it is extremely surprising that it is precisely the Socialdemokraterna who de facto abandon it, depart from that position and provide a different perspective. But I am happy to highlight the issue also in the future, because I believe it does more good than the proposal that the Socialdemokraterna come with in their budget.
The Social Democrats' proposal would be twice as expensive as the government's - and less accurate - when it comes to the families who have it the toughest. But I am still interested. I don't quite understand why the Social Democrats are deviating from the principle of annual adjustment of state income tax and choosing to raise the tax for so many. Caroline Högström was also on that. Every third police officer and every fourth midwife would get a higher tax.
The calculation has been made since the 90s during most of the years the interpellor has been minister or member of the Swedish Riksdag. If the calculation is not made, it means that more and more people successively receive a higher tax for every year that passes. Furthermore, it does not pay off when it comes to the work line. It should pay to work, and it should pay more to work more.
This government has a priority mission, and it is about the jobs. Jobs are the single most important and best guarantee and insurance against both exclusion and lack of integration. Jobs are also the best insurance when it comes to ensuring that you and your children get your own livelihood, can stand on your own feet and, above all, can be part of society and contribute to it.
Mikael Damberg (S)
Mr. Speaker! I agree with the Minister on how important jobs are for growth, the economy as a whole, and above all, the households. If one has a job to go to, one has both freedom and security in one's life. Therefore, we can be very happy that the Swedish labor market is enormously strong.
We were one of the economies that recovered fastest after the pandemic and managed to recreate high employment and very high labor force participation. We have also managed to push back unemployment, including long-term unemployment, in recent years. I believe that is enormously important.
I want to correct the minister on one point, Mr. Speaker. There are no proposals from our side to remove the temporary increase of the housing supplement. It is included in our budget. We agree that the money should be directed to those groups. It is good that the government is doing so.
What we do not agree on is that the government, in its budget, chooses to spend 13 billion kronor on lowering the tax for those with the highest incomes in our country in a situation where one cannot afford to support ordinary families with children who are struggling with their finances and trying to manage to pay both the rent and the electricity bill as well as the food and clothes for the kids. It becomes a bad distribution policy.
Zero percent of the income tax adjustment that the government is making goes to the groups that have it toughest in society. Zero percent! The government spends 13 billion kronor on that adjustment but cannot afford to spend 1.5 billion kronor on improving the child allowance for ordinary people.
I mean that a responsible economic policy must be able to face reality. It is not reasonable that high-income earners receive full inflation protection while all other wage earners are to hold back their wage increases on the Swedish labor market. It becomes an incorrect economic policy.
Statsrådet Anna Tenje (M)
Mr. Speaker! I would like to thank both the interpellator and Caroline Högström for the discussion and the debate. It has been a very good debate that has clarified and made visible the difference between our different parties and also how one intends to proceed when it comes to helping Swedish households in a tough time.
I think it is interesting and exciting that Mikael Damberg chooses not to comment on why one deviates from the principle of increasing the state income tax, but we will have to return to that in another debate. It is indeed an interesting development if this continues, because in that case it is about every fourth midwife and every third police officer getting a tax increase with Social Democratic policy. I believe that has quite a large significance because it is about jobs, our country's competitiveness and increased growth - but above all about it paying more to work than not to work. It should also pay to work more.
It is classic Social Democratic policy, I think, to raise the tax for midwives and police by approximately 1,000 SEK a month, as the interpellor is pointing out, and at the same time give 200 SEK back for three months.
I believe that we will also continue to need to have this debate and discussion, because unfortunately, the economic crisis is not over. We will need to figure out, cooperate on, and reflect on how we can support Swedish households in a very tough time.
Thank you for the debate and thank you for the floor, Mr. Speaker!
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.