Response to interpellation 2024/25:108 on the supplement to the housing 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 need for an extraordinary supplementary grant decreases as inflation has been mitigated and purchasing power is expected to strengthen 1. M wants to lower the tax on labor 1 and claims that the government has restored the work principle by reviewing grant ceilings and introducing activity requirements 2. M considers that the government's proposals have increased the economic standard most for the tenth of the population that has the lowest economic standard 3. S argues that the tapering of the supplementary grant affects the most vulnerable families with children 4. S considers that the government prioritizes tax cuts for high-income earners and capital 4 and that inflation does not make it easier for families with children as rents and food prices increase.
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)
Madam Speaker! I have been asked why I and the government choose to scale back the supplement to the housing allowance, which is intended to support the country's most vulnerable families with children.
The supplementary allowance for families with children within the housing allowance is a support of an extraordinary nature that has been designed to be able to support families with low incomes in a relatively fast and simple way for a limited period. The extraordinary situation has, however, persisted for a longer period than was possible to foresee, as the pandemic was followed by a period of high inflation. The difficult economic situation has now eased, and the future prospects for households look brighter. A cyclical recovery is judged to begin towards the end of 2024, and the purchasing power of households is expected to strengthen. This also means that the need for an extraordinary support such as the supplementary allowance decreases.
The housing allowance is a benefit that is income-tested and thus has marginal effects. For groups that have a weak foothold in the labor market, income-tested benefits can, in a longer perspective, reduce the incentives for self-sufficiency. The child allowance and the housing allowance are important for families that are struggling financially, but the best tool to permanently break economic vulnerability and counteract a low economic standard is one's own income from work. It is therefore important that more people manage their livelihood through their own work. The Government therefore wants to lower the tax on work to increase the incentives for work and strengthen households' purchasing power.
Against this background, an extension of the supplementary grant to continue supporting economically vulnerable households, while it is phased down from 40 to 25 percent of the preliminary housing allowance, is considered to be a well-considered measure.
Sanne Lennström (S)
Madam Speaker! Sweden has gone through a tough economic period. Inflation has hit many hard, and electricity prices have been high. Recently, Omni reported that food prices in Sweden are actually rising, and rents remain high. A group that is hit hard by this is families with children. In the government's budget for expenditure area 12, it is acknowledged that the difference is large between families with and without children. This is because many different needs must be met in a family with children. Children grow out of clothes and shoes, diapers are currently record-expensive, fruit must be sent to school, and soon it is Christmas.
In these continued tough times, it would be reasonable for politics to see the families with children and help those who are struggling the most. That is why I was upset when I saw that the government, in its budget for next year, chooses not only to once again not increase the child allowance but also to scale back the supplement to the housing allowance, the allowance that can help Sweden's most vulnerable families with children.
The supplement is extended, and that is welcome, but it is thus reduced to 25 percent. The phase-out affects the most vulnerable families with children. It could be about several hundred kronor per month for a family with children, and it might be precisely that family where the single mother has a knot in her stomach because she might not be able to pay the electricity bill. These families do not need a phase-out. These families need support.
The justification for the reduction is, according to the government, that the fight against inflation has had an effect and that the battle against high inflation has now been won. But I can inform the Minister and the government that just because inflation has fallen, prices have not. Diapers, rents, and fruit are still terribly expensive.
If there is anything politics is about, it is priorities. The government chooses to spend its money on something completely other than support, namely tax cuts for those with high incomes and capital. This is considered more important than a single mother or father being able to pay bills or buy food for the children. It is not just me as an opposition politician who says this. The newspaper headlines when the government released its budget were all variations of that "rich men profit most from the government's budget." The government's policy is thus detached from reality. Those who earn the most should get even more, and those who have it tough should have it even worse.
Madam Speaker! I am not saying that the housing allowance in its current form is perfect, but the money reaches a vulnerable group. The parents could have a better life. Now it is the children who are paying the price for the misprioritizations, because the government is doing nothing else to compensate for this. They are leaving the families with children in the lurch.
We Social Democrats believe that Sweden can do better than this. We believe that a permanent support would reach the most vulnerable families with children. We also believe that an increased child allowance would help, because, frankly, very few families with children are doing great right now.
With common sense, it is easy to understand that for those who are already struggling, less money in the bank account has consequences, not least for children. My question therefore becomes what consequences the Minister sees the tapering of the supplement to the housing allowance will lead to. Can the Minister promise that fewer will not have to rely on social assistance or risk eviction?
Statsrådet Anna Tenje (M)
Madam Speaker! The Government has taken responsibility in a very difficult time and has also received the Swedish people's trust and mandate to begin the work of restoring the work line in Sweden. We will do that. We are working, among other things, on reviewing a benefit ceiling and enabling qualification for welfare. We are also introducing an activity requirement in the social assistance.
Sweden and large parts of the world were hit hard, as we have both touched upon, by the corona pandemic and the historically high inflation which stood at 10 percent when this government took office. Furthermore, the interest costs were high. The government pursued a responsible policy with the aim of breaking and getting out of the high inflation as quickly as possible, which was carving gigantic holes in households' wallets and making the Swedish people poorer. All households were affected by the inflation and the economic downturn, but economically vulnerable households are hit particularly hard in such situations. We all know that. Difficult times always hit those with the smallest margins the hardest.
The government acted to support households in general and the weakest households in particular. The effects on the households' economic standard as a result of the government's proposals and notifications during the mandate period are very clear. The economic standard increases most in percentage terms in the tenth of the population that has the lowest economic standard and least in the two top income groups. It is very clear. That is how it looks over the entire mandate period.
The fight against inflation is now won. We are moving towards a more normal situation, even though there are still great risks in the economy in the form of war in our vicinity, growing unrest in different parts of the country and large uncertainty factors, while we nevertheless see a light on the horizon.
The government recently presented an expansive budget to get the Swedish economy moving again. Now that inflation has been defeated, the government has created room to do just this. The government has, as stated, received confidence and a mandate from the Swedish people to re-establish the work line, and the best insurance against economic vulnerability and exclusion is to have a job to go to. It is also the guarantee for our common welfare.
More children need to see their parents go to a job, and more households must be lifted out of poverty and strengthened so that they can handle the next crisis much better. There are actually no state subsidies that can replace the value of the self-efficacy it gives to have one's own job to go to and one's own salary to live on that one can support oneself on. It is the government's absolute most important goal right now.
Sanne Lennström (S)
Madam Speaker! I feel that when we have this interpellation debate, it is very important that we agree on what reality looks like. The Minister is happy to talk about the work line, but it is also important to remember that vulnerable families with children can very well include a parent who has a job.
During the question period, a single parent with several children was mentioned. It could also be about a nursing assistant. It is not the group the minister mentions that we are talking about here today. I want to remind the minister that there is a common objective for the economic family policy, which the Riksdag has established and which is in the government's budget, to contribute to a good economic standard of living for all families with children and to reduced differences in the economic conditions between households with and without children. It obliges one to stand behind this when one has a budget bill.
I understand that the Minister does not feel any need to react to an opposition politician's concern regarding the consequences of the government's budget, but very many with me wonder how hard the government's budget will hit the families with children next year. One example is Majblomman, who commented on the government's autumn budget with the following words:
"Majblomman's target group is very sensitive to price increases. It is one of the reasons why we are concerned about the autumn budget, and its lack of compensatory measures aimed at economically vulnerable families with children. Thousands of applications for financial support for children are currently coming into Majblomman from families who cannot afford the most essential things. And the trend has for some time been that the applications are increasingly about children's basic needs. Clothing and shoes are our very largest category when we distribute financial support to individual children."
The government says that the difficult economic situation has eased and that the future outlook for households looks brighter. But the fact that the government sees a brighter future does not help these families with children. It does not pay for two bags of groceries or an electricity bill. The fact that the government rejoices that the blow against inflation has gone well does not lower the rent, which has escalated.
An enormous number of families with children are still finding it very difficult. Again: food prices are still increasing! One can talk as much as one wants about a won inflation war, but it is de facto still very difficult for families with children.
There are also more reasons to invest in families with children than to help those who are struggling. I will take an example. A friend of mine walked on Drottninggatan behind two men in suits and heard one of them say: "Thanks for the thousands in tax cuts, government! That was nice. I'm already eating out, but I guess one has to sacrifice and put a bit more into the savings account instead." I think a family with children would have known exactly what to do if they received a few thousand or a hundred extra. But those men did not know, as they obviously earned enough to receive several thousand in tax cuts. Therefore, it is a very important argument that growth could also benefit if the money were actually given to those who need it.
Since the Minister sees a brightening - can the Minister promise that the evictions, the livelihood support, and the flow to Majblomman will not increase? Yes or no?
Statsrådet Anna Tenje (M)
Madam Speaker! The government's policy is based on the premise that it should be more profitable to work, educate oneself, and be industrious. One should be encouraged to take that extra evening shift, one's first job, to perhaps switch to a new job as a foreman because it pays off, or to jump onto that training program that will lead to a job further down the line if one is currently outside the labor market. It is because jobs are the best guarantee and insurance against exclusion and economic vulnerability.
The committee members took up many examples from Stockholm. I must say that it is a bit stomach-turning to stand here as a Social Democrat and claim that we do not look at the vulnerable and hard-working families with small children. One only has to look at where the Social Democrats are in power and see what happens when the Social Democrats get to decide. Then it becomes quite clear.
We can continue to talk about Stockholm. When the government lowers the tax for a hard-working family with small children who are struggling, the Socialdemokrater in both the municipality and the region choose to raise the tax significantly. The tax reduction that the family with children receives thanks to the government's budget is unfortunately eaten up quite quickly because of the Socialdemokrater in the region and the Socialdemokrater in the city of Stockholm. At the same time, the fee for SL-cards is raised, and buses are withdrawn so that accessibility decreases precisely for that hard-working family with small children in Stockholm. This means that the possibility for their children to get to various extracurricular activities after school is crushed quite quickly.
One speaks warmly because so much is being done here to support families with small children, such as raising the child allowance and so on, and one wants to keep the additional allowance at 40 percent. But that means quite little when the tax increase from both the municipality and the region finally hits. If one wants to start somewhere to support families with children, perhaps one should start in one's own party and ensure that one does not raise the tax every time one has the opportunity to do so when one sits in power.
In the Swedish Riksdag, in the Social Democrats' shadow budget, it is quite clear and distinct. There is a very clear dividing line between us and you. We stand for the work line, lower the tax on work and make it more profitable to work, while you increase the benefits.
There are many very wise people in our surroundings, and one of them has summarized the Social Democrats' policy like this: You raise the benefits for everyone, but no one should be able to live on their wage. It becomes very clear. Then there will be no growth, and then no families with children in financial distress can get out of poverty. Rather, the exclusion is cemented, and poverty is inherited. That is not what I want.
Sanne Lennström (S)
Madam Speaker! Since the Minister takes the liberty of summarizing the Social Democrats' policy, I can summarize the Moderates' policy. In my world, it looks like this: Rich people shall have more. There shall be tax cuts so that rich people get several thousand more in their pockets. Those who have the least, for example those who are dependent on the supplement we are talking about here today, shall get less. In other words: a carrot for those who earn the most and a whip for those who are in a vulnerable situation. It is not such a world that I want to live in.
I want to return to the fact that I have not received any answer to my question. Should they continue to be concerned at Majblomman in order to receive an influx of people who need help? I believe this is something they would like to know.
Then I want to return once again to the fact that we must agree on the reality in this chamber. The reality is that inflation has gone down, but that does not mean it has become easier for families with children. It does not mean that rents have gone down. Rents have gone up. And just two days ago, news came from Omni that food prices have actually continued to increase.
Even though the war against inflation is won, the fight to make it better for families with children is not won. The government must see this if it wants to be able to act and actually do something about the situation. But we can return to this in future interpellation debates.
Statsrådet Anna Tenje (M)
Madam Speaker! I want to start by bringing the interpellor back to this reality. I can once again only state what I said in my second speech, namely that if one looks at the effects on the households' economic standard as a result of the government's proposals and notifications during the entire mandate period, it becomes very clear: The economic standard increases most in percentage terms in the tenth of the population that has the lowest economic standard and least in the two top income groups.
With this said: The interpellant's summary of the Moderates' policy is completely incorrect. I still believe that the people of Stockholm will very much feel the Social Democrats' tax increases in both the municipality and the region.
I would like to thank you for the debate. I thank the interpellator for the important questions and for the fact that we can have this discussion in the chamber and maintain a continued focus on how we can strengthen Swedish households in the long term. We may not be entirely in agreement, but I still believe that it is beneficial that we have this discussion. The different dividing lines that are now being drawn between the work line and the benefit line are becoming very clear.
I will, in any case, continue to have a strong focus on restoring the work line in Sweden to make it more profitable to work and so that more children see their parents go to a job and so that more families with children who today live in economic vulnerability can be lifted out of poverty by more people working and working more.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.