Response to interpellation 2023/24:791 on subsidized employment
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
The debate concerns subsidized employment and how cheating against the system should be combated. L argues that these employments have positive effects on establishment in the labor market 1 and that they are for people who are far from the labor market 2. L emphasizes that the government has taken measures for better control 1 and welcomes proposals from S 2. S argues that the government's response is non-committal and lacks concrete measures 3 4. S proposes requirements for collective agreements, labor market assessment 3 4 as well as the possibility to demand back money or a fine in case of cheating 5. S considers it deeply regrettable that simple measures are not being taken 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.
Arbetsmarknads- och integrationsministern Johan Pehrson (L)
Mr. Speaker! [The member] has asked me if I intend to take any measures to increase the accuracy of the subsidized employments and if I intend to take any measures to ensure a better exchange of the economic resources invested in this type of measure. Sofia Amloh has also asked me what initiatives I intend to take to prevent over-exploitation and fraud regarding the subsidized employments.
Subsidized employments can have positive effects on the opportunities for establishment in the labor market, especially if they are targeted at people who are far from the labor market. I note that the Fiscal Policy Council in its report for 2024 states that there is a relatively extensive body of research literature studying the effects of subsidized employments. Consistently, the studies show positive effects. The flow from unemployment to employment clearly increases, and companies that use the subsidies tend to have a more positive employment development than other companies that recruit the long-term unemployed. Follow-up shows that those who participate in subsidized employments to a large extent are individuals with a weak position in the labor market and a high risk of falling into long-term unemployment.
The Government continues to monitor the effects and accuracy regarding subsidized employment and is simultaneously reviewing the labor market policy supply of measures. Extra services and vocational introduction employments have been abolished, while at the same time the Government has ensured that the establishment jobs have been put in place. The Government has also, from 2024 onwards, lowered the support levels for new start jobs.
The Government welcomes the audit of the control of subsidized employment that the Swedish National Audit Office has conducted. Of course, payments from the welfare systems must be correct and crimes must be prosecuted. Since 1 December 2022, Arbetsförmedlingen has had better opportunities to deny payments to unscrupulous actors. This includes, among other things, an increased opportunity to check employers before decisions on subsidized employment and a more efficient processing of personal data. With the regulatory changes, Arbetsförmedlingen's opportunities to refrain from placing efforts with unsuitable employers have increased.
The government has taken a number of measures to improve the possibilities for control and to prevent incorrect payments. On 1 January this year, the Payment Authority was established, which has the task of preventing, deterring, and detecting incorrect payments from the welfare systems through data analysis and audits, including payments for subsidized employment.
In March, the government submitted a bill with a proposal for a new law on reporting obligations to counter incorrect payments from the welfare systems as well as fraud, rule violations, and crime in working life (prop. 2023/24:85). That law has now been decided by the Riksdag.
The Government has appointed an inquiry on improved opportunities for information exchange between authorities (dir. 2023:146). On 21 December 2023, the Government decided on a regulatory amendment aimed at improving the Public Employment Service's opportunities to carry out checks of job seekers' right to work and reside in Sweden.
I can assure Sofia Amloh that the work to counter incorrect payments and subsidy crimes directed against the public sector is a high priority for the government. The government will continue the work to reduce incorrect payments and, if necessary, take further measures.
Sofia Amloh (S)
Mr. Speaker! A number of things have been done, such as those that appear here in the response. I have nothing against that. What I perhaps have objections to in the Minister's response is that it is not an answer to what measures are actually being taken to address and reduce the fraud with the subsidized employments. These are not accurate measures to achieve more accurate subsidized employments.
Both in terms of journalism and in other ways, the subsidized employments have been scrutinized, and it has been revealed how employment positions are stacked on top of each other, how workers are exploited, and how companies, even dormant companies, take money from Arbetsförmedlingen for subsidized employments, even though it is, therefore, a dormant company.
It is large sums of money that we do not know what they are used for. They can go to subsidized employment that brings people closer to the labor market, but to a large extent we see that it is very much of the taxpayers' money that goes to fraud and not to what was intended.
It is against that background that the Swedish National Audit Office has chosen to audit the subsidized employments. They conclude that this occurs in several forms, but especially when it comes to this government's favorite among subsidized employments: the nystartsjobb (start-up jobs).
It is incredibly problematic how much cheating can occur there and how much is being paid out. It is happening continuously now. It would actually be appropriate that concrete measures are taken to stop this cheating and these payments, all the millions that are flowing away.
The Government's response to the National Audit Office's report is quite non-committal. The National Audit Office provides the Government with proposals for measures, including ensuring that the risks in the "nystartsjobb" (new start jobs) are met by adapted requirements for controls. They propose a review of regulations specifying how the Public Employment Service (Arbetsförmedlingen) should control employers who lack collective agreements so that good employment conditions can be secured without the handling becoming too costly. These are some of the proposals.
Why then not take a fairly simple measure and require collective agreements? That would make a rather stark distinction right up and down. This government and the Minister himself have several times, both today and in previous debates, underlined the importance of the Swedish model, how we organize the Swedish labor market. It is very good. Then it would be appropriate for collective agreements to also be required here as well. It would facilitate things for many.
Arbetsmarknads- och integrationsministern Johan Pehrson (L)
Mr. Speaker! Of course, I am pleased to hear this commitment to the rule of law and to combating crime from Sofia Amloh. It is easy to sign on to that commitment.
That is why the government is making major investments in the police, in prosecutors, and in reforming criminal and procedural law to result in more relevant tools and more relevant penalties. We are creating the Swedish Payments Agency, which is an exception, I think, but completely necessary to ensure that the right person receives the right compensation at the right time and in the right way. Once it is up and running, it will be able to work in a fairly data-driven manner to ensure that welfare funds are used in a correct way.
It is this focus we have, together with the changes concerning increased transparency and increased opportunities for control.
Regarding the measure that Sofia Amloh returns to even today, it was the case that that requirement was abolished by the previous Social Democratic government. The Chamber should know that I also know why – I want us to be able to be straightforward here in this narrow circle.
I believe it is important that companies that are young or companies in specific industries have the opportunity to use this type of startup job to give more people a chance. Subsidized employment is an important part of the labor market policy.
I also look forward to us getting an increased exchange on the establishment jobs that we have now put in place. I also believe this will be facilitated when the economy hopefully turns after the government's very responsible economic policy, which has led to us now having a much lower inflation. We see several institutes, trade unions, employers, banks, and everything else that is sitting and analyzing our future economically. Then the economy can brighten and thus also the labor market, and more establishment jobs can be put in place, because we expect that more than today can become relevant. There, the requirement is that the unions and the employers shall take a large own responsibility for this.
A diversity of measures was needed, several different actions, and the "nystartsjobb" (new start jobs) play a certain role there. One signal is that we have tightened the rules and lowered the compensation to reduce fortune seekers, not to mention grossly criminal individuals. But they are best combated through the investments we make in the justice system so that, in ordinary operations when Arbetsförmedlingen performs its controls or via the work-life crime centers that exist, one can reach these individuals who use this area to wrongly obtain funds and who engage in serious crimes or who, in other parts of the welfare systems, try to obtain funds they are not entitled to.
Sofia Amloh (S)
Mr. Speaker! I would like to thank the Minister for recognizing my and the Social Democrats' commitment to stopping fraud and preventing tax money from flowing into the pockets of companies that exploit the system.
I miss the commitment in the government. If the government could still measure up to the commitment we have, it might not look the way it does right now. I think there is an opportunity to step up here, especially when the National Audit Office is so clear and has stinging criticism in substantive points that the government could actually take action on.
There are also good proposals from the Social Democrats in this area, including collective agreements, as mentioned. It is actually we who want it, even if there has not always been a majority to get it through - partly because of the party that the minister himself represents. Another is to have a labor market assessment when it comes to the new-start jobs. It is not an entirely unreasonable proposal.
When it comes to Arbetsförmedlingen, one wants to do things right from the start. When applications come in, they need to be reviewed and checked directly in the process. The possibility for the employment officers to do that now is not in proportion to how many applications there are and how much money it is about.
How can one make an assessment of whether it is a serious company when one does not have a control activity that is sufficiently scaled for that number of subsidized jobs and the money it covers? The best thing is probably to do it right from the beginning in the application process. Among other things, collective agreements and labor market screening would be good measures. More measures are needed when it comes to this.
Mr. Speaker! I saw in the response, and we heard it here from the Minister, that he had read what was stated in the Fiscal Policy Council's report for 2024 regarding the subsidized employments. We have nothing against subsidized employments. We think it is good.
We can help with everything that brings the individual closer to the labor market. This applies in particular to the proposal that was raised here regarding the establishment jobs. But the money that we allocate must go to what is intended. There is so much evidence here that they do not do that. That outflow needs to be stopped and something must be done about it.
The Minister may also have noted that there is quite stinging criticism in the report from the Fiscal Policy Council against the entire labor market policy. I hope that the Minister also reflects on what effect it has or does not have. This also appears in the report.
My question remains. What actual measures does the Minister and the Government intend to take to stop the fraud? We are not engaged in this just because so much money is flowing out. If one thinks that it would not finance criminal organized activity, one is naive. Where are the Minister's concrete proposals and commitment?
Arbetsmarknads- och integrationsministern Johan Pehrson (L)
Mr. Speaker! It is unfortunate that Sofia Amloh cannot read the commitment. But Sofia Amloh can perhaps still take in what is happening and the upgrading that is taking place of the justice system. It is about the sharpened tools to tackle work-related crime in various forms and not least fraud with subsidized employment. It is something that we should have seen many years ago. But it is happening now.
It is now that the exchange of information becomes easier. It is now that we have an authority on site that has just started working specifically to be able to combat, among other things, the type of crime that we are talking about. But it will take some time before, for example, the Swedish Payments Agency is fully operational and working with the force that I assume Sofia Amloh also would like to see it have.
It is a matter of addressing the type of fraud that exists when one individual allows themselves to be exploited by another individual. In this case, it occurs within the framework of a company number, a company in some form that should not have these rights. The possibilities to be able to audit have increased. I exclude no other measures to address that type of crime.
It is incredibly important that we use the state's resources in a wise manner. It must not lead to money ending up in criminals' pockets. From my answer to the interpellation, which I read out, the measures that we have taken are evident.
I want to emphasize once again that the justice system must have resources to be able to prosecute the individuals who engage in this so that the activity can cease. In addition, a number of investigations are underway looking at reducing various forms of secrecy and being able to better strike at criminals' property that they have acquired through crime and so on.
It has been a neglected area for many years. I believe we are on the right path and on a necessary path to also address the type of welfare crime that occurs within the framework of subsidized employment.
Sofia Amloh (S)
Mr. Speaker! It does not have to be that one simply says: We are investing in fighting crime, and then we do a lot of things for that. There are many proposals to do things right from the start when it comes to this type of financing, where it still involves very large amounts of money and which lies within the area that Johan Pehrson is responsible for.
In my conclusion, I can add that one might also be able to improve the possibilities of demanding money back when it is known that fraud has occurred. One might even be able to demand a fine when someone fraudulently uses tax funds with intent. It is perhaps a measure that is close at hand to take.
But nothing is being done with those proposals. I have submitted several during this debate. The minister does not intend to even come anywhere near considering any of those proposals. It is deeply regrettable.
Why don't they do that? Is it for the benefit of the companies? Who is it supposed to benefit? I think it is the companies. It should be easy for them to apply for the money for the subsidized employments. The price is that there is so much cheating.
I can still state that one is not willing to look at these rather simple proposals. It is something that can be done immediately, and it is proposed from many sides. One is actually just looking away from them and looking at a multitude of other things. I am not saying that those things are bad. But one should take rather simple measures here and now against what is happening here and now.
Arbetsmarknads- och integrationsministern Johan Pehrson (L)
Mr. Speaker! Again: I welcome all proposals from the Social Democrats. It is perhaps regrettable that nothing was done earlier when there was an opportunity.
Now they say that much of what is being done is good, and they support it. But they want to do even more. It is still impressive in commitment and force. But when one had the power, it was not enough to do anything. When one does not have the power, what is being done is insufficient. We attribute it to the opposition commitment, which can easily arise.
It is clear that there are also privacy aspects and legal certainty aspects that one must be mindful of when entering with the force that the government is now using to combat organized crime, in large and small, which has a focus on the welfare system's security.
That is where the subsidized jobs are a part. They are not for anyone other than those people who are far from the labor market. They shall be given a chance to return to work for self-sufficiency, empowerment, and more freedom in the future.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.