Response to interpellation 2023/24:219 on accounting rules
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
KD argues that accounting rules in the Annual Accounts Act cannot be changed as it is not compatible with Swedish law or EU directives 1 2 3. KD wants to focus instead on structural reforms such as increased access to buildable land, simplified building rules 1 2, shorter lead times 3 and an investigation for building near water 2 3. C argues that the accounting rules are a simple technicality and wants the government to produce a bill to facilitate construction 4 5. C argues that the party has tried to initiate two committee initiatives to be a constructive force 6. SD argues that the accounting rules are a major problem for the countryside 7.
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 Andreas Carlson (KD)
Madam Speaker! Alireza Akhondi has asked me if I intend to take any initiatives to address the issues he describes in his interpellation.
Alireza Akhondi describes that the costs of building housing in certain parts of the country, often in rural areas, exceed the housing's market value upon completion, which leads to write-downs of their value. According to Alireza Akhondi, this affects the willingness to invest and can thus, in the long run, make it difficult for the municipalities concerned to take responsibility for the housing supply. Alireza Akhondi points out that this is partly due to EU legislation and the so-called Allbolagen, but that accounting rules are regulated in the Annual Accounts Act. Finally, Alireza Akhondi concludes that opportunities exist to facilitate construction throughout the country, if the will exists.
I thank Alireza Akhondi for highlighting the pressing issue of housing supply in rural areas. It is true that according to Swedish and European law, there is a limit on the type of support that can be given to housing companies. It is also true that accounting rules exist in the Annual Accounts Act. However, it is important to point out that even regulatory relaxations for certain parts of an industry can constitute prohibited state aid. I would like to remind in this context that in 2020, the Accounting Standards Board considered changes to its general guidelines precisely as a way to address the problems described by the interpellator. The Board judged, however, that such changes would not be compatible with Swedish law or the underlying EU directives. I see no reason to make a different assessment today.
With that said, I wholeheartedly agree that there are opportunities to facilitate construction throughout the country. The government's objective is to increase the availability of buildable land, simplify the building regulations, shorten lead times in the planning and building process, and improve the opportunities for home ownership.
Alireza Akhondi (C)
Madam Speaker! Calimec Europé AB 305 million, FL-Prefab AB 103 million, SMA Infrastructure Örebro AB 87 million, Construction Value Sweden AB 68 million, AB Rörbjörnen 66 million, Jafab El AB and Jafab VVS AB 91 million, NH i Luleå 52 million, 3A Betong AB 48 million, Ronald Gustavsson Grävmaskiner AB 43 million and VTA VVS AB 39 million - now the Minister will surely wonder why I am reading out a lot of company names. These are companies in the construction sector that went bankrupt in November 2023. Together, the ten companies turned over 902 million kronor. Together, those companies had several hundred employees. These are employees who, just in time for Christmas, are losing their livelihood.
We have approximately 7,000 layoffs within the construction sector today. It is 1,328 companies that have gone bankrupt. That is a 29 percent increase this year. According to UC, the state loses 46 billion kronor in lost taxes for the bankruptcies that have occurred in connection with the crisis.
Now, I do not blame the Minister for corporate bankruptcies. It is not the Minister's fault. But the Minister responsible for both infrastructure and housing has every opportunity in the world to act and come forward with proposals for measures that solve or at least alleviate the crisis we find ourselves in.
The problem is that compared to how it was before the Minister took office, only a quarter of the number of housing units is now being built. The agenda is empty. The bill list is empty. In this chamber, in the role of opposition, there are not so many other tools, at least not at our disposal, to hold the government accountable than to plead for measures.
I have stood in this speaker's chair several times and asked for concrete proposals that solve issues. The Government has time and again said: We are working at full capacity. But we do not see what you are doing at the Government Offices. What we see are the bills you submit to our table.
The Minister says, regarding this specific question, that he does not intend to do anything in particular right now. But this is low-hanging fruit, and there are a number of other low-hanging fruits that he could come with proposals to the Riksdag about in order to alleviate the crisis that the Minister has now stood here for several hours and answered various interpellations about.
Mikael Eskilandersson (SD)
Madam Speaker! This is a debate that is supposed to be about accounting rules, but I do not know if Member Alireza Akhondi even mentioned the accounting rules that much during his contribution.
It concerns these so-called K3 rules, or K2, for smaller companies. Together with high construction costs and problems with access to land as a result of shoreline protection and national interests, they have been identified as the three biggest problems for building on so-called weak markets.
The accounting rules are nothing new; they have been criticized for a long time. Even the Municipal Inquiry that was appointed in 2017, as far as I can remember, in which I sat, identified just the accounting rules as a major problem for many municipalities, especially in our countryside.
The will to build will then be absent, even though there can actually be a good economy in building in the form of incoming rents for a long time to come. But if it is not possible to build because the rules ruin the economy of the project itself, important investments in the municipalities will be absent, which in turn leads to a housing shortage.
The problem with the accounting rules is that there is no simple solution. Member Alireza Akhondi claims that it is low-hanging fruit. But somewhere the value must also be the real value, or at least close to it. There are also sometimes slightly different interpretations of what the value should be. Minor deviations can perhaps be ignored, but larger deviations must sooner or later be restored to the correct value. Otherwise, we have a lot of companies that have over- or undervalued buildings, and that in itself is a risk factor.
I can state that construction subsidies similar to those that have existed previously are not a solution to the problem. They create more problems than they solve. When a new property is built with a subsidized cost, it also lowers the value of surrounding properties, not least because the rent is kept down.
According to the Social Democrats' own calculations, the rent on a subsidized housing unit should be approximately 1,500 kronor lower. This in itself means that the return from similar properties in the area is limited, and it becomes a vicious spiral where the lowered value due to the subsidies destroys the market. This in itself leads to even more obstacles for new construction on market terms to arise.
What I would most like to question is how serious the Centerpartiet actually is when they say they want to see more construction while simultaneously removing the government's initiatives to stimulate plans for housing construction in their budget. 20 million to change plans and 60 million for new plans – that was nothing that fell on fertile ground in the Centerpartiet's budget work.
To this, they add that they are removing the energy efficiency measures for small houses, which are many in the countryside. They are also cutting back on Lantmäteriet. In what way would construction increase when Lantmäteriet receives fewer resources?
Overall, there are several things that make me question what the Center Party actually wants with the housing policy. Do they really want to see more housing, and if so, why are they scaling back on that which could create more housing?
Statsrådet Andreas Carlson (KD)
Madam Speaker! The accounting rules are mentioned in the interpellation. The requirement for business-like conduct in the Allbolagen also applies to accounting principles. Sweden has a professional and well-functioning public sector which, of course, must follow good accounting practice.
The question of the application of the Annual Accounts Act has been investigated by previous governments and reviewed by the Accounting Standard Board during the previous mandate period, as I pointed out in my interpellation response. I believe the Board was clear in its assessment: An amendment of the K3 regulatory framework is not compatible with the Annual Accounts Act or its underlying EU directives – the directive which, among other things, ensures that those who wish to invest in Swedish companies can rely on the fact that the information in Swedish annual reports is fair and that these can be compared with companies in other countries.
Madam Speaker! It is therefore about an assessment that has been made based on previous investigations and a statement following a review that the Accounting Board conducted during the previous parliamentary term. It is not that I am skipping picking low-hanging fruit in this specific case. This has been investigated, which I explained. The member is welcome to describe how he sees that one could bypass this and if the Accounting Board is wrong in the member's opinion. But I make no other assessment than the Accounting Board in this case.
To improve the housing market in the whole country in the long term, reforms are needed instead that address the structural problems in the construction and housing market. The problems we see affect everyone who needs a home in the whole country. The government's objective is to increase the availability of buildable land, to simplify the building regulations, to shorten the lead times in the planning and construction process, and to improve the opportunities for home ownership.
Here, the coalition parties that have signed the Tidö Agreement have pointed to a reform that we will now develop and an investigation we will appoint to implement reforms, changes, and improvements so that one can be able to build in attractive lakeside locations or near ditches, wetlands, and smaller lakes. This is today a hindrance to development, not least in the countryside.
Here I believe and hope that there can be a consensus with the Center Party to achieve a better functioning housing market and construction even in the countryside, where the coastal protection legislation today is something that hinders this and lays a wet blanket over the development.
Alireza Akhondi (C)
Madam Speaker! I do not know where to begin. I can start by saying that it is a bit strange that the Sverigedemokraterna, in an interpellation debate that we in the opposition have with the government, only devote themselves to throwing dirt at the Centerpartiet in an issue where they also claim that the problem has been known for some time. If one is part of the government base, one also has a responsibility to move the issues forward instead of sitting here and engaging in mud-slinging at opposition parties.
Then we have this matter regarding the shore protection. It is very funny that you are now pushing for the same proposal that you, together with your support party, previously chose to vote against. And then you say that you hope that the Centerpartiet chooses to cooperate in this matter. It is clear that we will vote for the proposal that we were involved in developing and which could already today have been in place and been part of the solution that the Minister requests.
The question of accounting rules is not an ideological question, Andreas Carlson. It is not particularly complex. It is basically about figures on a piece of paper. An entrepreneur can see a market - if I build this apartment building here, I can get it rented out and make the calculations for the operations work, in order to pay off the loans and so on. What that entrepreneur or that housing company falls on is a very strange piece of legislation that Sweden has "gold-plated" based on an EU directive.
I had a meeting with FAR, who did not recognize this issue. They think this is very strange.
I would still like to inform the Minister that it is we in this chamber who decide which laws and regulations shall apply in Sweden. It is not the Accounting Standards Board that decides what the laws in this country shall look like.
I want to appeal again to the Minister: This is low-hanging fruit. It concerns a technicality in the Annual Accounts Act. The Minister wanted me, as an individual Member of Parliament, to come forward with proposals on how to solve this sharp angle, but it is the Minister who holds all the Government Offices' investigative resources. There are no investigative resources in this chamber.
Of course, I can come up with proposals. But can the Minister promise me here and now that if I come up with a solution proposal, the Minister will take that proposal into consideration and ensure that we get a government bill on the floor of the Riksdag so that we can resolve this issue while waiting for everything else that the Minister says is working on within the framework of their area of responsibility?
Mikael Eskilandersson (SD)
Madam Speaker! I maintain that it is a known problem with the K3 rules, but nothing has been done about it. An investigation has been commissioned, and what was concluded was that the value must be representative. Therefore, one cannot invent a dummy value.
I am a bit confused when Member Alireza Akhondi speaks about this being just figures on a piece of paper. I want to remember that Alireza Akhondi is educated in economics. The problem is not figures on a piece of paper; the problem is that the value of the property is lower than the construction cost was when the property was built.
Economy is usually figures on a piece of paper, but they correspond to a value. If one writes a higher value than the actual value, it becomes misleading. It becomes misleading for everyone who actually has something to do with the company in some way. Then the company that owns the property would have a false value, so to speak, in its accounting, which would cause the company to be overvalued on the stock exchange, for example. It would cause a lot of other problems.
This is not low-hanging fruit, as Alireza Akhondi pointed out. On the contrary, it is probably the case that one needs to reach a conclusion on how to work around this without the companies having a false value in their economy or their accounts. I do not see how one could do that.
Statsrådet Andreas Carlson (KD)
Madam Speaker! This is not the Accounting Board's opinion taken out of thin air, but it is based on the fact that this has been assessed in relation to the Annual Accounts Act. This is also not taken out of thin air or a piece of legislation that is decided solely on the basis of what is debated in here, but there is an underlying EU directive that regulates this. As I said, Madam Speaker, it is a directive that, among other things, ensures that those who wish to invest in Swedish companies can rely on the information in Swedish annual reports being fair and comparable with companies in other countries.
If the member comes up with good ideas, I will, of course, not reject them in advance. However, it is not quite as simple as just placing something on the table of the Riksdag and making a decision on it. There is a preparation requirement for the government's proposals, there is a preparation requirement for committee initiatives in the Riksdag, and there is a preparation requirement for initiatives from individual members, even if they were to proceed and be submitted for decision-making in the Swedish Riksdag. I do not, however, want to judge ideas and proposals that may come from the members of the Swedish Riksdag in advance – that is what I want to have said, Madam Speaker.
When it comes to the shoreline protection, I think it is very positive to hear that we can rely on the Center Party in this. I actually thought nothing else. On the other hand, there is also a preparatory document, speaking of preparation, which the previous government did not take with them in full when they prepared that proposal. We are looking at that now.
We will return with proposals that facilitate construction - not least in the countryside, which this interpellation is about - and make buildable land available in attractive locations, where it has simply been dug by a ditch and become protected by shoreline protection for that reason, or around smaller lakes and wetlands where today the shoreline protection is a wet blanket over development in the countryside. We will go even further and appoint an inquiry with the aim of enabling construction near water. Also in that respect, I hope, of course, for a broad consensus in the Swedish Riksdag.
Then we will return with reforms that facilitate construction, simplify and improve regulations, shorten lead times, and make buildable land available. Why hasn't all of this already arrived? Well, there was a large and overdue need for reform regarding precisely the structural reforms. We have commissioned a number of inquiries, some with shorter working times and some, of course, with longer ones in order to meet the legislative requirements for preparation.
We are working at a very high pace. Of course, we would have been better equipped if this had been in place to a greater extent. Now it is not to that extent that is required, but it is equally correct to address the structural problems in the housing market in a low cycle as in a high cycle. That is where we will continue, and there I appreciate the dialogue with Members of Parliament – even in interpellation debates.
Alireza Akhondi (C)
Madam Speaker! I would like to begin by extending a warm thanks to Minister Andreas Carlson for this debate. These debates are tricky in that it is quite difficult, given the situation we find ourselves in with a crisis in both the housing and real estate markets, to be very narrow. I have tried some other methods in this speaker's chair and used the somewhat broader brushes. We had a debate with the Minister about the need for a crisis commission for the Swedish housing and real estate market.
We have, from the Center Party's side, tried to initiate two committee motions in the Civil Affairs Committee to start the process and demonstrate our goodwill in being a constructive force and addressing the societal problems that exist. But the reaction from colleagues in the committee has been a cold shoulder on both occasions.
We have stood here in a number of debates, and the Minister highlights the importance of cooperation. I suggest that the Minister speaks with his colleagues in the Committee on Civil Affairs so that we are also given the opportunity to be constructive, especially as both the Sverigedemokraterna and the Kristdemokraterna have had very high support when it comes to rural issues.
Now it is up to you to prove it, Andreas Carlson. Deliver real reforms so that people get the same opportunities to live everywhere in our beautiful, elongated country! By the spring term, things must start happening. I truly hope that the minister delivers.
Statsrådet Andreas Carlson (KD)
Madam Speaker! Thank you for the thanks and for the trust, Alireza Akhondi! It was expressed in the concluding post. I appreciate the dialogue and want to thank you for the exchange we have had in the chamber here tonight even on this issue. I look forward to more dialogue ahead.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.