Response to interpellation 2023/24:185 on the increasing relative poverty in Sweden
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
M argues that inflation is a poison that makes everything more expensive and that the government prioritizes combating inflation as well as supporting households with price-indexed benefits, housing allowances, and reduced taxes 1 2 3. M emphasizes that the work principle is important and that the government is implementing measures to make it more profitable to move from benefits to work 1 2. S argues that Sweden is in a difficult economic crisis where food prices and rents are pressuring households. S proposes a temporary bank tax, extra child allowance, and increased maintenance support. S believes that the cost crisis affects wage earners and that sickness pensioners, low-income earners, and families with small children live in relative poverty 4.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! Serkan Köse has asked me what measures I intend to take to improve the situation for those individuals and households who today live in relative poverty.
There are several different ways to measure how many people are economically vulnerable. Different measures show different pictures of both the extent of vulnerability and the development over time. The measure that Serkan Köse refers to, the proportion with an income lower than 60 percent of the median for the population, is not a measure of economic vulnerability in an absolute sense.
Income inequalities in Sweden have increased for a long time. One contributing cause has been that the lowest incomes have increased at a slower pace than the median income. This has, in turn, as Serkan Köse rightly points out, contributed to more people falling below the relative 60-percent threshold.
Since economic turmoil often hits those with the smallest economic margins hard, it has been a priority area for the government to combat inflation and support households and welfare. Many households with weak finances have received compensation for the high inflation via price-indexed benefits and transfers.
In the longer term, the best way to reduce the risk of poverty is to get more people into work. To strengthen the work principle, the government is implementing a number of measures that make it more profitable to move from benefits to work. In the budget for 2024, the government introduces a job tax credit that will put more in the pockets of low- and middle-income earners. For more people to enter the workforce, more companies also need to start and grow in Sweden. The government will therefore pursue a policy that lays the foundation for higher growth.
Serkan Köse (S)
Madam Speaker! Thank you, the Minister for Finance, for the answer! We have the toughest economic crisis since the 90s. Inflation has reached record high levels, the Swedish economy is shrinking, debts are increasing and unemployment is expected to rise, which hits the households in our country hard. Ordinary families with ordinary incomes are finding it increasingly difficult to pay the bills. The rising interest rates and rents have hollowed out the household budgets, and ordinary, hard-working Swedes have had it tougher. Particularly affected are single parents and those with narrow margins. Many are uncertain whether they can provide their children with nutritious food.
The economic crisis is hitting all wage groups hard. We see how households have lost ten years of real wage increases as a result of the cost crisis and how ordinary households struggle to keep their heads above water while the Swedish economy is shrinking fastest in Europe.
Madam Speaker! Statistics Sweden's data shows that over 1.5 million Swedes now live in relative poverty. This means that one has a lower income in relation to the population as a whole. This is a situation that hits child-rearing families and the most vulnerable in our society hard. These are not just figures on a piece of paper, Madam Speaker, but they are human destinies. These are lives that are affected every day by this grim reality.
At the same time, we see a sharp increase in food prices, the largest since the 1950s, which hits families with children and single parents particularly hard.
Madam Speaker! The City Mission's latest report confirms this development. The report points out that 72 percent of their efforts now consist of food support.
This difficult situation affects not only families but also young adults. According to Hyresgästföreningen's latest report on young adults' housing, more and more young adults are living with their parents – eight out of ten do so involuntarily – and many are worried about future housing opportunities.
At the same time as single parents struggle to provide nutritious food for their children, the elderly must choose between medicine and meals, and the future of young adults is uncertain due to economic vulnerability, we see how the big banks are taking out billions in profits. During 2023, Sweden's four largest banks earned over 120 billion kronor, which is provoking for ordinary people and not least Swedish wage earners, who have taken a great responsibility for the economic crisis. For every billion in bank profit, there are families struggling to put food on the table, and children growing up in poverty.
Madam Speaker! These challenges will have long-term social consequences, such as increased social segregation and a negative impact on children and young people. Children who grow up in poverty face greater obstacles in their education and professional development, which creates a vicious cycle of poverty. Furthermore, a prolonged economic crisis leads to an increased burden on our healthcare system. When people have it difficult economically, their physical and mental health is also negatively affected.
We view this development and the government's passivity on the issue with concern. Based on the reality we have today, I would like to ask the Minister for Finance how she intends to handle the increasing food poverty and the economic vulnerability that is now a daily reality for thousands of Swedes. How will the Minister for Finance ensure that no child in our country needs to go to bed hungry?
Finansministern Elisabeth Svantesson (M)
Madam Speaker! I would like to thank you for the interpellation. I completely share the interpellator's view that very many people are currently struggling all over Sweden. Those who had small margins before inflation hit now have even smaller margins.
Inflation is a poison. It makes everything much more expensive and erodes the wallet of those who go to work every day. Just as the interpellor said, the real wage reduction has been quite dramatic during the last year. Therefore, one of the absolutely most important tasks that this government has regarding economic policy in the short term is to combat inflation, while simultaneously supporting the households that are struggling.
The government does this through an increased and extended housing allowance, which hits those who have it the toughest, and by lowering the tax for everyone who works. Furthermore, many of our systems are indexed, meaning those who receive social assistance, guaranteed pension, and other benefits receive compensation for inflation.
With this said, very many people are having a tough time right now. And with this said, very many children will feel a greater disappointment this year than in a long time, when they do not get what they have prioritized in first, second, or third place on the Christmas list. And many parents are having a hard time because they cannot give their children what they wish for.
This question is also about the concept of relative poverty. I still want to mention it, not to be technical but because it is important what words we use. Relative poverty does not mean that everyone has received less money in their wallet, but it is about those who have less than 60 percent of the median income in Sweden. That is where the line is drawn for relative poverty. It has increased. In 2011 it was 13.5 percent and in 2021 it was 14.7 percent. During the years that the Social Democrats held the government, relative poverty increased. I still think that one should include that. Just as both the interpellor and I have mentioned, we now have an inflation that makes it extremely tough.
Let me summarize. What is the government doing? We are working to dampen inflation and to support households during that time. It is about support for the most vulnerable, but also about lowering taxes on labor and fuels and ensuring that we can get through the situation together.
Finally, Madam Speaker: I absolutely believe that the interpellor truly cares about all those people who are having a tough time, but I would also have wished that when we came to power just over a year ago, there would have been fewer who were unemployed than there were in 2014 – instead, there were more. Very many people live in economic exclusion and have been forgotten in long-term unemployment.
Even though we have compensations and grants, the basis is still that mothers and fathers must have a job to go to in order to be able to put food on the table for their children. There is much left to do here that this government is now taking action on.
Serkan Köse (S)
Madam Speaker! Thank you, Minister for Finance, for the answer! When it comes to the jobs policy, it can be stated that the government, in its budget, is reducing both the money for Arbetsförmedlingen and also the money for the active labor market policy to equip people for the jobs that exist. We do have a mismatch on the Swedish labor market. There are very many vacant jobs but also a high unemployment.
More resources and measures are needed to strengthen people's competence so that they can take the vacant jobs that exist. They also need to be equipped when the economy turns.
It is also about priorities. The government is lowering its ambitions regarding active labor market policy.
Unlike the government, we Social Democrats propose, among other things, a temporary bank tax. The Finance Minister said nothing about this. It would be interesting to hear something about this. As we have said, we propose that those who earn large sums of money from the crisis should also be involved in building Sweden stronger.
We also propose an extra payment of the child allowance and an increased maintenance support of at least 500 kronor per month to directly provide measurable relief for very many families with children.
The government's policy is still deficient. Unfortunately, the Finance Minister has still not fully answered the important question regarding the challenges that many households face today.
Let me just give a few examples. Dragana Douhabi, who after 25 years as a cleaner is now on sick leave, expresses it like this: "I am not ashamed of anything. I am only ashamed that I cannot give my children what they want."
Thus says Eva-Lena Hultman, a sickness pensioner: "Many Swedes have a false image of the poor. They think that everyone is homeless or an alcoholic. But many are ordinary working people."
Martin Östergren, who previously worked in retail and now lives on activity support after being signed off sick, says: "Before, you were ashamed to look in the clearance corner. But now people think in a completely different way. Now you are no longer ashamed of it. There are so many who are in the same boat as oneself, because food has become very expensive. Meat, I don't remember the last time I ate it, it has become so very expensive, and fresh vegetables. Meat and fresh vegetables have become a class issue."
Madam Speaker! These stories, which are reflected in Stadsmissionen's poverty report for 2023, show the harsh reality for thousands of Swedes. People who previously could manage now struggle to get food on the table.
Those who earn half of the median income live under completely different conditions than most others. If Sweden is to be a country that holds together, it is not reasonable that 15 percent of Swedes are excluded from so much of what a normal life in Sweden in 2023 contains. It is not reasonable that some should look at their neighbor and feel that they are living a life that I will never be able to live. It takes a toll on people's health, it takes a toll on the cohesion in our society, and it takes a toll on democracy.
When not all children are given the same opportunities to reach their dreams' goals and when inequality is allowed to grow, segregation will also increase. Then, the cohesion in a society will be threatened. It contributes to more polarization. Then populist forces also grow.
To stop this development, the government needs to act to reduce the gaps in society. A plan and vision are needed for how we are to reverse this development.
Once again I ask: What is the plan, Finance Minister? How does the Finance Minister intend to reverse the development, and what is the Finance Minister's answer to Dragana, Eva-Lena, Martin and other Swedes who are in the same situation?
Finansministern Elisabeth Svantesson (M)
Madam Speaker! Briefly: My answer is the same today as it has been during the entire year that I have had responsibility for this task. We will do everything we can to fight inflation.
What is inflation? Inflation is about prices increasing all the time. If they increase by 4 or 6 percent and it continues, it becomes a completely unreasonable situation, especially for those who already had small margins or low incomes. That is why inflation must be dampened. While we do this, we also support households – this year with 40 billion and next year with different types of tax cuts and support for those who have it toughest. We are also increasing many of the benefits and compensations with an index.
It is tough. We are experiencing both high inflation and a recession at the same time. It is something quite unique. We have not experienced it since the 1990s. The plan is clear: We are going to get through this.
A small point that is important to emphasize: the Social Democrats have presented a budget that was voted down in the Riksdag the other day. I think it is important to point out that when one says that one intends to finance much of what is being discussed now through a bank tax, one should know that such a tax is completely impossible to introduce on January 1. If the Social Democrats' budget had passed, it would therefore not have been possible to bring in those funds. As I have told Mikael Damberg before, I am a bit surprised that one does not take greater responsibility in the budget that is presented. One presents budgets that are not feasible.
My last sentence here is that inflation is a poison. I know many people who are in similar situations to those the interpellator mentions. I live near many and know many who have extremely small margins. It is incredibly tough.
We will do everything we can to now get through the tough economic situation, the economic winter. The most important thing we can do for every person in Sweden is to ensure that inflation now goes down. It is on its way down, but the final round is not yet won.
Serkan Köse (S)
Madam Speaker! Thank you, Minister for Finance, for the answer! Unfortunately, the Minister for Finance's answer does not give much hope or faith for the future. Above all, it gives no answer to all the people who are looking at this regarding how they are to make their finances work and get through Christmas. Are the banks to be part of taking this responsibility, yes or no?
The cost crisis that we are experiencing right now has a deep and direct impact on the average wage earner. People in our society who previously managed on their wages are now struggling month after month to cover their basic expenses. Everything from food to rent is becoming a challenge for many Swedes to pay.
Young adults, who should be in a phase of building their own lives, are now increasingly dependent on their parents' financial support. Many are still living at home with their parents. And those who already live with a low economic standard, such as disability pensioners, low-income earners, and families with small children, face an even more desperate situation in managing everyday life. They struggle not only with economic insecurity but also with the mental burden that the economic situation entails.
In conclusion, I ask once again: Does the Minister for Finance have any concrete answers for all the families with children who are now wondering how they will manage the finances before Christmas? How does the Minister for Finance intend to improve the situation for the people who live in relative poverty in our country?
ANDRE VICE TALMANNEN
The Minister has announced that she will refrain from giving her closing remarks in this interpellation debate.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.