Response to interpellation 2023/24:714 on the review of state business support
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
KD wants to improve the follow-up and evaluation of state business support to ensure effective use 1. KD argues that Sweden cannot compete with China or the USA in state aid and should instead focus on competitive advantages such as electricity prices, skills, and infrastructure. KD believes that the state should focus on basic infrastructure and that it is not a state task to provide direct support to companies 2. KD argues that the state should share risks to benefit the taxpayers 2. The Government wants to create a better overview of all types of support and allocate funds for systematic evaluations 1 3. SD believes that policy should create good conditions for the private business sector without distorting competition through disproportionately large risk-taking by the state 4. SD requests a consolidated picture of how many billions are funneled to the private sector 4. SD sees a risk in the state participating in risky projects without having the conditions to share in a potential upside 5.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Energi- och näringsministern Ebba Busch (KD)
Madam Speaker! I have been asked about the government and I intend to work for a complete review of various public business supports to the private sector.
The government shares the picture that Tobias Andersson provides. There are uncertainties and deficiencies in the underlying data reporting which effects are achieved through the state funding to companies and business-promoting actors. And this criticism has been raised over a long period from a number of sides, including by the National Audit Office.
The government's ambition is to improve the possibilities for monitoring and evaluating state support and public grants to companies. The government wants to achieve a better overview and ensure that state funds are used effectively and go to the right purposes. In the budget bill for 2024, the government proposed that the appropriation 1:5 Business Development should be increased by 15 million kronor for the work of more systematically evaluating public business-promoting initiatives, and the appropriation was calculated to be added 15 million kronor annually in 2025 and 2026 for the same purpose.
The purpose is to create a better overview of all types of business support and to create better conditions to also be able to make well-founded assessments of their effects. The work has now commenced at the Government Offices. One part of that work is, among other things, Tillväxtanalys' final report Consolidated follow-up and evaluation of the business-promoting system, which was presented on March 27 this year, with proposals on how such an overview and better conditions for effect evaluations can be achieved.
At the same time, the discussion surrounding the state's role regarding public support and what effects they produce is a difficult question and something that Sweden shares with many countries. It is not a unique problem. We do, however, know that Sweden in international comparisons is ranked as one of the world's leading innovation countries. We also know that the Swedish economy is strong, and we have, to be such a relatively small country in the world, many large internationally successful innovative companies. Thus, we see that the Swedish business sector is competitive and that the business sector has the capacity for renewal and development in international markets.
Fair working conditions and well-functioning markets are central to the Swedish business sector's competitiveness. Important competitive advantages historically have included, among others, reasonable electricity prices, competent labor, functioning transport infrastructure, early digitalization of society, and the Swedish labor market model. Ensuring that Sweden's important competitive advantages continue to persist is crucial for the business sector and the country's prosperity.
I agree that we need to get a better overview of state enterprise support and good underlying data to be able to assess what effects they lead to. It is important to be economical with the state's resources and that they are used where they do the most good.
Tobias Andersson (SD)
Madam Speaker! I thank you for the answer from the Minister.
The Sweden Democrats fundamentally believe in market forces and consider that politics should primarily contribute to creating good conditions for the private business sector to operate. Politics takes greater responsibility for the regulatory framework, the supply of skills, the infrastructure, and now also the electricity supply, much thanks to the minister himself, while the business sector engages in the actual business activities.
Unfortunately, it does not look that full in practice. Instead, we see all around in our world how politics is increasingly blending with the business sector and how state aid and trade barriers are on the advance. Sweden, which is a relatively small economy with 10 million inhabitants, is however dependent on its competitiveness and will never be a winner in the long run in a subsidy race.
Despite this, more and larger examples have emerged of how even the public sector in Sweden intervenes and supports the private sector in various ways. Through credits, innovation support, business consulting, EU grants, Klimatklivet, Industriklivet, and so on, Energimyndigheten, Vinnova, Naturvårdsverket, Tillväxtverket, Almi, among others, support the so-called private business sector. In some cases, it involves billions of kronor, such as when Energimyndigheten in relatively recent times granted a support of over 3 billion to Hybrit through Industriklivet and the Ipceiregelverket from the EU side.
It is naturally possible to discuss exactly how the state should facilitate for Swedish business. No party proposes that there should be no form of public support. However, it is important that one does not distort competition and disrupt the market, or that it results in a disproportionately large risk-taking on the state's part in the context.
To be able to have a nuanced discussion in this area, it is however required that we actually have a sensible overview of all types of business support and their effect. I judge, Madam Speaker, that we do not have that today. Despite the fact that the effect of several different support systems one after another has been condemned by both the Swedish National Audit Office and the Agency for Growth Policy Evaluations and Analyses, as well as individual researchers and business organizations, there is no unified picture.
Against this background, I submitted this interpellation to Ebba Busch and asked precisely whether the government intends to work towards a complete review of the various public business supports to the private sector. I am very grateful for the answer I received from the Minister, in which she clearly highlights that the government agrees with the problem picture I paint in the interpellation text. It is also fundamentally positive, I want to state, that we now see a budget supplement for business development in order to, among other things, be able to have a better systematic approach in the evaluation of the public sector and its business-promoting efforts.
The report from Tillväxtanalys that the Minister mentions in his answer, I also think is important. It highlights many of the deficiencies that, not least my party, has emphasized over the years. It will also be interesting to see how, from the government's side, one works further with many of the recommendations contained within the framework of this. I intend to return to that later, Madam Speaker.
My basic question was whether there is any ambition from the minister or the government to look at how we can get a total overview. How do we know how many billions are being funneled to the private sector, and how do we get a consolidated estimate of their effect? That question remains somewhere.
Energi- och näringsministern Ebba Busch (KD)
Madam Speaker! The first thing I would like to say is that the Government Offices, in summary, have quite good knowledge of individual cases. We have individual examples of what we think or have indications of has functioned well and of what has functioned less well. We do, however, have limited knowledge of the cumulative effects of the support that we provide. What is the sum of all the state supports that do exist?
I also want to go as far as to say that previous governments have left the ship without a broader overview. We are now trying to rectify this with what is stated in the budget bill for the current year, namely 15 million kronor to systematically evaluate public business promotion initiatives. We are working on this right now at the Ministry of Climate and Enterprise. That project is intended to create better conditions for reporting, monitoring, and evaluation of state support, initiatives, and public grants to companies and provide an overview of our business promotion system.
The second point concerns Tillväxtanalys. These are appropriations that have been increased, as Tobias Andersson pointed out, in order to strengthen the work on precisely impact assessment.
The third is what is stated in the financial plan for the 2024 budget bill. The Government also wants to review how the state-funded business promotion can be made as effective and purposeful as possible.
When I stepped into my department, that kind of unified picture did not exist. We need to acquire such a picture.
The old municipal councilor in me, the pragmatist, who now ventures into all these EU contexts and international contexts, sees a problem with that many countries have started pushing in state aid while we do not do it in the same way. It raises questions. "Oh, here is a Swedish company that has not received this type of support, but it is guaranteed in other contexts. Does it mean that the Swedish government does not believe in this project?" It shows how toxic state aid races are. It also focuses on the fact that tax money is used to pave the way for things that should have been solved instead by increasing profitability and sustainability by reducing the regulatory burden for the companies. At the same time, reality looks the way it does.
When we can bring home money from the EU - that is, our own tax funds that we have pumped into the EU system - to Swedish interests, it is clear that we should use that opportunity. But it is obvious that it is a jungle in the current situation. We have a poor overview. We are straightening that out now.
Tobias Andersson (SD)
Madam Speaker! I agree with the picture being painted regarding how deficient the interest has been from previous governments to carry out a proper review or alternatively to act on all those reviews that have nevertheless come through over the years.
I remember when I debated exactly this question with both Ibrahim Baylan and Anders Ygeman. At that time, the answer was rather that if one does not believe in this, one is against the companies in question, instead of actually being honest and answering as the minister did initially and emphasizing that the important thing is that Swedish tax funds are placed where they do the most good. In some scenario, it can be in different types of support – perhaps credits where we can share a risk with, for example, an exporting, large company in an uncertain market. It is something that complements the market's mechanisms for lending and so on. I think that is a reasonable corporate support, which is carried out by the Export Credit Board or when we issue guarantees for nuclear power investments in Sweden or the like. That is one thing.
At the other end, there are the direct handouts that are paid out as some kind of cash support. It is more market-distorting, because it must be handled by politics, an agency, or at most a civil servant – who is also open to influence. Vinnova has been closely scrutinized in this regard in the recent past by interested entrepreneurs. It is, of course, something completely different. Politics must then depart from the ambition of technology neutrality and instead take a stand on which company or project should receive the support. Historically, there has, at least according to me, been an ideological stamp on parts of these. One might have received support for gender-certified forestry or something, and that is probably not quite what this government thinks is the most appropriate way to spend the state's and ultimately the Swedes' money.
The overall picture is missing, as said. I remember that during the previous parliamentary term, I asked the Riksdag's investigation service if they could estimate—regardless of whether it concerns a credit, an innovation grant, or a co-financed EU support payment—how much goes from the public to the private sector. I received the answer that such an estimate could not be made. I suspect that if the minister went to their department and asked for a figure, the answer would be the same because this involves several departments and agencies and covers everything from pure handouts to co-financing, loan supplements, and consultancy. We therefore do not know how much it is. I request that overview.
Some proposals are mentioned in the investigation *Samlad uppföljning och utvärdering av det företagsfrämjande systemet* which the Minister referred to. There, they want to carry out a mapping of the business-promoting measures by connecting the authorities' databases to a common authority API standard, which could be a first step in this. It would be interesting to hear the Minister's view on that.
I believe we share the picture of the problem. What I see, and what I and the Sweden Democrats oppose, is that this seems to be becoming increasingly attractive in the eyes of many parties.
I hear from the Minister that one travels around the EU and meets other states that engage in more active business promotion than the Swedish government does. So, I think it should remain, because if we were to say that we ease the EU's state aid rules further and extend the already existing relaxations, it could mean that our tax funds go towards financing state aid projects in southern Europe. That is how it usually looks when the EU gains more competence. We believe that it can benefit our competitiveness, but in the end, we finance other countries' state aid at the expense of both our own state budget and the competitiveness of our companies, which do not get to share in the aid in the same way as is done in other countries. I do not want to see such a development.
Energi- och näringsministern Ebba Busch (KD)
Madam Speaker! I will try to keep my answer short. Sweden will never be able to compete with, for example, China or the USA in state aid, nor with Germany or France. Therefore, we must have a clear, own USP. We must really sell that which has historically been our competitive advantage: electricity prices, competent labor, functioning transport infrastructure, early digitalization of society, and the Swedish labor market. That is what we have had, historically. If one now looks forward, the answer needs to be more of the same.
We are restructuring the energy policy to achieve reasonable electricity prices in the future, and we have a focus on capacity. We are investing heavily in engineering education, vocational training, and primary school to increase competence across the entire country. We need to invest in infrastructure, both from a preparedness perspective and to strengthen Sweden Inc. I gladly join the discussion that Sweden is relatively under-invested when it comes to those issues, but I do not do so with the government hat on.
We are also investing specifically in 6G. It concerns 390 million over the coming years. We have also secured a cooperation with the USA. After many years of tinkering, we are now shifting to establish this strong foundation instead of primarily trying to run after the problems in retrospect with various types of corporate support. The foundation – the basic infrastructure itself – with reduced regulatory burden shall pave the way for a stronger Swedish business climate. It may cost money in the short term, but it will serve us well in the long term.
Tobias Andersson (SD)
Madam Speaker! Thank you to the Minister for the answer and for the work that has been initiated from the department's side to dare to take part in the impact assessments and other many support programs that have been carried out, not least by the Swedish National Audit Office and the Agency for Growth Policy Evaluations and Analyses! I believe that there is much to be gained there, seen, for example, in pure policy proposals such as cuts to parts of the existing business-promoting measures.
I realize that I spoke rather broadly and generally in my previous speech. Now I shall try to be in some measure more concrete.
What I see as a risk, against the background of my ideological orientation that the state should not engage in playing venture capitalist, is the fact that the state is participating to an ever greater extent in risky projects, either through wholly or partially state-owned companies or in relation to so-called private companies that build their balance sheets on support and credits from Sweden, the EU, institutional investors, pension funds, etc. They are, of course, completely free to invest in different types of projects, but I see a tendency that the Swedish state is taking large risks in these projects to an ever greater extent without having particularly large prerequisites to share in a potential upside.
It is pointed out by researchers such as Christian Sandström that from the political side, one takes on a portion of the risk in risky projects where the potential return accrues to the so-called private owners. They have found a fantastic leverage for the invested own capital by the state inflating the same and taking risks without any chance to share in potential dividends in the future. It is a concern I have, and I would like to hear the minister's view on the state's increased risk-taking in individual industrial projects.
Energi- och näringsministern Ebba Busch (KD)
Madam Speaker! I will nevertheless venture to answer generally. We need to clean up, and we need to get the facts in order so that we can work strategically. We have finally begun that. Based on that foundation, we can discuss how we should redirect.
The basic infrastructure, for example nuclear power, roads, railways, ports, is a state task; but providing direct support and general state subsidies to companies is not a state task. It is when we have failed on the first part that we end up in the second part, and there we must not be swept away. If we focus on this, we land correctly in a part of the assessments of where the state should intervene and share the risk to benefit the taxpayers, not to benefit profit margins - which is not the state's task. Our task is to stand on the citizens' side.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.