Response to interpellation 2024/25:161 on the municipalities' predicament in the water issue
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
The debate concerns the municipalities' economic constraints and the financing of welfare. KD argues that the government focuses on economic recovery and growth to finance welfare and infrastructure 1. KD emphasizes that the municipalities have a far-reaching responsibility for their own financing and that the government has prioritized welfare through permanent increases in state grants 1. KD argues that the municipal sector's economy improves in 2025 thanks to combated inflation 2. KD claims that the government provides 168 billion kronor in general state grants 2. S argues that the state must increase the grants to municipalities and regions to maintain the service level 3. S considers the government's lack of an increase to be a saving 3.
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 Erik Slottner (KD)
Madam Speaker! I have asked the Minister of Finance how the Minister intends to act to strengthen the municipalities' finances so that welfare and community services can function even in the future, if the Minister intends to act within their area of responsibility to improve the municipalities' conditions to meet the large investment needs for long-term sustainable delivery of water and sewage services to the citizens, and if the Minister is considering to reprioritize in the future so that larger supplements go to the municipalities and smaller ones to the country's high-income earners.
The interpellation has been handed over to me.
In the budget bill for 2025, the government could shift the focus from combating inflation to building Sweden richer and safer again. The budget focuses on supporting the economy's recovery, among other things through reforms for increased growth and a re-established work line. This includes, among other things, easing the tax burden for the Swedish people as well as various measures to get more people into work. That the economy grows and Sweden becomes richer is an important prerequisite to be able to finance the investments required for Sweden to become a safer and more secure country to live in.
The municipalities have, through the municipal right of taxation, an extensive responsibility for the financing of their activities. Tax revenues also account for the very largest part of the municipalities' total revenues. The municipalities' economic conditions are thus largely influenced by the development of the tax base. For the development of the tax base, the government's policy for increased growth and a restored work line is of great significance.
The municipalities have reported strong economic results for many years. The economic situation weakened in 2023, primarily due to the high inflation. The situation remains strained this year because the previously high inflation continues to affect the municipalities with some time lag, and a relatively weak development of tax revenues is also expected this year.
Despite the fact that the state budgets for 2023 and 2024 needed to be restrained in order to combat inflation, the government during these years has prioritized welfare and proposed reinforcements of the general state grants to the municipal sector with a total of 16 billion kronor. The reinforcements have been permanent and thus continue to strengthen the municipal sector's finances from 2025 onwards. The municipal sector's finances are also expected to improve when inflation stabilizes at a low level and the sector's pension costs thereby decrease. According to SKR's forecasts, this is judged to strengthen the result by approximately 50 billion kronor in 2025 compared to 2024. At the same time, an economic recovery is expected, and tax revenues are expected to increase at a faster pace again.
Challenges for the municipalities remain, however, as a result of, for example, continued large investment needs, including in the water and waste area, and the demographic development with a declining population growth and an increased proportion of elderly persons. It will therefore require adaptations and redistribution of resources between operations.
When it comes to water services, municipalities may charge fees to arrange and operate public water and sewage systems. A special investigator has been tasked with reviewing the regulatory framework and distribution of responsibility and, if necessary, proposing changes to ensure a robust and continuous delivery of water services. The investigation submitted its proposals on 2 December, and among other things, measures are proposed to strengthen the municipalities' water and sewage economy.
The Government has shown that economic supplements to the municipal sector are prioritized when the needs are great. The Government now sees a need for interventions that long-term promote the municipal sector's efficiency and capacity and also allocates funds for these purposes in the budget bill for 2025.
Linus Sköld (S)
Madam Speaker! I submitted this interpellation to the Riksdag's Chancellery for further forwarding to the Government Offices on October 25th this year. I submitted it then to the Minister for Finance because I judged that this falls within her area of responsibility. Now it is another minister at the Ministry of Finance who is finally here to answer it.
Interpellations are an important tool for the Riksdag's oversight power, and the government should normally respond to them within 14 days. In this case, it took four weeks for the Minister for Finance to provide the notification that she is handing it over to the minister who is here today, and after that, I received a proposal for a response date.
If I were a representative of a government that had strengthened the Government Offices' resources with hundreds of millions during the mandate period but fails to produce a proposal for a response date within four weeks when the requirement is that the debate should be held within two weeks, I would be ashamed! I would think it was embarrassing to be Erik Slottner here today and represent a government that does not manage even the most basic hygiene when it comes to the bureaucracy, even though hundreds of millions more have been allocated for the Government Offices' bureaucracy. But enough about formalities.
We are here to debate that the municipalities are in a tight spot. The municipalities, which together are responsible for ensuring that citizens have access to clean water and functioning sewage services, have an investment debt that has accumulated over a long period and amounts to over 600 billion kronor according to the organization Svenskt Vatten. Their assessment is that the debt increases by approximately 10 billion per year in the current situation.
The Government does not deny the problem. The Government has, as the Minister mentioned, appointed an inquiry to review what the state can do to help in the situation. The state nevertheless has a partial responsibility for the fact that the municipalities are in this situation.
The state was involved in paying for large parts of the expansion of the water and sewage facilities. Then, the responsibility for them was handed over to the municipalities, and the municipalities have actually only had reason to manage the operations. They have been forbidden from building up a capital that they could invest. Therefore, we now sit in this situation.
This is linked to the distribution policy. It is linked to the government's priorities. The municipalities' taxpayers risk having to pay the investment debt if the state does not take its responsibility. Therefore, this is a question of distribution policy, and that is why the Finance Minister should be here to answer it.
If the state does not take its responsibility to help with the investment debt, municipal taxpayers will have to pay it. And at the same time as the government gives exactly zero kronor in general state grants for next year to the municipalities, they are lowering the tax for the richest. The tax burden must be eased, says Erik Slottner, and it is for those who earn over 62,000 kronor a month that it should be eased. It will not benefit the municipalities' ability to pay off the investment debt.
Is Erik Slottner prepared to take any concrete measures to help in this predicament?
Eva Lindh (S)
Madam Speaker! Investments in the water and sewage systems around the country must increase. Therefore, it is important that my colleague, Member Linus Sköld, also poses this question, so that we can bring it up for debate.
The municipalities are already allocating many resources so that all of Sweden will have a distribution network and a functioning water treatment. It is about securing the drinking water, so that the population is not exposed to waterborne infections or harmful substances. These are very important investments that must take place.
Today's system is not robust enough to handle the effects we are now seeing, and the assessment is that it could become even worse as a result of climate change. Large investments are needed due to the current situation, and the need is increasing.
Every year, approximately 20 billion is invested in water and sewage facilities, but it is not enough. The assessment made by Svenskt Vatten and several others is that the scope should be around 30 billion per year. These are funds that Swedish municipalities find difficult to set aside, especially in these times.
If this is not done, we therefore risk that important investments to secure the drinking water are delayed or completely omitted. This issue is therefore absolutely crucial.
I am also curious to hear what the Minister has further to answer regarding this. I have understood that an investigation will be launched, but I would still like to hear something about what the Minister's direction is regarding this.
In this time, it is a very great challenge for municipalities in general, and that is because it is tough times for municipalities. It is tough times to manage the welfare for everyone. It is particularly tough for smaller municipalities in the countryside. One must manage investments in the welfare, the important school, elderly care and healthcare. One must also manage the investments that are needed in the future.
When the SD-led government actually does not provide sufficient resources, it affects very many different needs in Sweden, all around the country. That is why this issue is so important, and I wonder what the Minister has to say about this.
I also want to highlight a response from another minister who came a few weeks ago and which left me quite puzzled. The Minister for Civil Defence said that he did not perceive that municipalities are calling for the state to take greater responsibility. Then I wonder: Is it a picture that the minister shares that the municipalities are not requesting greater state responsibility? I would like to hear that, because it is important for how we should handle the issue going forward.
Briefly, I also want to comment on something in the answer that the Minister has given, which I naturally thank him for on behalf of Linus Sköld. Increased growth is required, absolutely. The situation for the Swedish government right now is not directly impressive. Sweden is now at the bottom of the league when it comes to growth and, moreover, has the highest unemployment in ten years. This does not benefit the money in municipalities, the state, or regions. It therefore does not benefit the welfare.
Statsrådet Erik Slottner (KD)
Madam Speaker! Eva Lindh is speaking about the SD-led government. When I see that there are some school students in the gallery - I interpret it as, at least - I think it feels extra important to say that this is not a government that is SD-led. We have a government consisting of the Moderaterna, Kristdemokraterna, and Liberalerna, and then that government cooperates with the Sverigedemokraterna in the Riksdag. We had an election where the four parties were given the mandate by the voters to form a majority in order to be able to push through the politics they campaigned on. Now we have this majority in the Riksdag.
The government consists of the Moderates, the Christian Democrats and the Liberals and is not ruled by a single party. We rule together, and so we receive support from the Sweden Democrats. We live in a democracy, and to pass proposals one needs a majority in the Riksdag. Therefore, these four parties cooperate in the Riksdag. But it is not the case that we are in any way ruled by the Sweden Democrats. In the government sit the Moderates, the Christian Democrats and the Liberals.
The year 2024 has been the toughest year for the municipal sector. Now it turns in 2025 and becomes better.
For very many municipalities, it has been of great help that the result equalization reserves, as they are called, exist. They amount to over 50 billion kronor, and approximately 80 percent of the municipalities in Sweden, not least many smaller municipalities, have a result equalization reserve. It has been of great help and has ensured that many municipalities have been able to offset deficits and avoid cutting back on welfare.
Now we see that the economy is improving significantly in 2025 and will continue to strengthen further in the coming years. As I said in the interpellation response: Just the fact that we have now pushed down inflation means that the municipal sector's economy improves by 50 billion kronor next year.
We had a major debate earlier this year on whether the state subsidies should be increased by 12 billion or 18 billion kronor. There was a difference of 6 billion kronor between the opposition and the majority. Now it is 50 billion kronor we are talking about, by having pursued a policy that has been successful in combating inflation.
Linus Sköld said that we are not providing any general state grants to the municipalities in 2025. We certainly do! We are providing 168 billion kronor in general state grants. It is no increase compared to this year, but we are providing 168 billion kronor. That is 16 billion more than two years ago. In addition, we have earmarked state grants for healthcare, elderly care, and schools which are also increasing, which meant that 40 percent of the reform space in this year's budget went to municipalities and regions to maintain a strong welfare.
As for the tax policy: Once upon a time, when Ingvar Carlsson was Prime Minister in Sweden, the Social Democrats also stood up for the principle of half remaining. It was considered reasonable: If I get an income increase, I as a wage earner should at least be able to keep 50 percent of this before the public sector is there and snatches the rest. That principle seems the Social Democrats have completely abandoned. I regret that.
This government has now begun the work - we are not fully there yet - of returning to the principle half remaining. I think it is perfectly reasonable.
To then come back to the water and sewage question, we have had an investigation called the Water and Sewage Preparedness Investigation - it lies on Peter Kullgren's desk, it should be said - and which submitted its report on December 2. There are a number of proposals there on how we should strengthen the capacity in the water and sewage infrastructure in Sweden moving forward. These proposals are now being prepared at the Government Offices. I cannot say today exactly how we will proceed with the different proposals.
Linus Sköld (S)
Madam Speaker! Let me correct a couple of things in what Erik Slottner just said.
Firstly: It is true to reality that it is the Moderaterna, Kristdemokraterna and Liberalerna who sit in the government. But it is the Sverigedemokraterna who hold the reins. They have civil servants at the Statsrådsberedningen who are to approve every single thing that this government puts forward. It is their policy that this government is responsible for. Therefore, Eva Lindh's designation of an SD-led government is consistent with the truth.
Secondly: The largest single expenditure for the state is grants to municipalities and regions. The amount that Erik Slottner indicated in the rostrum just now is certainly correct. To maintain the value of this amount in times of inflation, an increase of 6 billion would be required between 2024 and 2025. That is approximately 3.43 percent, which is the price and wage adjustment that the government itself assumes is needed so that one can buy the same amount of goods and pay the same amount of staff for this sum of money.
If the service level in the public sector, in municipalities and regions, is to be maintained, the contribution must therefore be increased. When the government does not do so, it is in practice a saving of 6 billion on municipalities and regions, that is, on healthcare, school and care.
As a matter of chance, it is almost exactly the same amount as what is spent on lowering the tax for ministers, directors and others who earn over 62,000 kronor a month - a tax cut aimed precisely at them. With the same motive - that it is now turning, as Erik Slottner says - one also reduces the support to the very most vulnerable families, those families who together have about 16,000 kronor a month to live on. A minister has 160,000 kronor to live on, but here one reduces the compensation to those who have the least by 400 spänn and increases the compensation to the minister by 4,000 spänn a month.
Is this what is needed in times of economic crisis? I find Erik Slottner's way of arguing to be offensive.
Let us then move on to the inquiry's proposals. In the inquiry that Erik Slottner refers to, there are "some proposals," he says. I would guess that it is because he does not want to be held accountable for the content of them, as the government has a habit of shifting this type of cost onto municipalities and regions and has no ambition to finance the welfare and the public services that municipalities and regions are responsible for. It is also very clear in Erik Slottner's interpellation answer that he has no such ambition. What is prioritized now is to lighten the tax burden, he answers, because the municipalities have such good finances.
The investigator proposes that the state should take up loans corresponding to 1 billion per year to help the municipalities in the situation they find themselves in, with an investment debt worth 600 billion. One might think it is quite paltry that the state should help with 1 billion per year, but the investigator actually proposes it. He also prescribes that the state should borrow that billion, because it is investments of the nature that they will provide lasting improvement for generations to come. Therefore, it is justified to put the taxpayers in debt to help pay off the municipalities' accumulated debt.
Then one could ask Erik Slottner: What is his position on this? Since he now does not want to provide any increased general state grants, can he imagine taking out loans of 1 billion per year? He can imagine taking out loans of 400 billion to build nuclear power, so perhaps he can imagine taking out loans of 1 billion per year to help ensure that we also have clean drinking water in the future.
Eva Lindh (S)
Madam Speaker! We are discussing the housing issue, but we did not receive many new answers. The Minister refers to the investigation. We ask: Is there any ambition on the part of the state to take increased responsibility? These are, after all, tough challenges for the municipalities.
I do not think that the municipalities that are now struggling to keep their heads above water, which really have it tough and are not receiving any new money, agree that it will get better. It is brightening up, the government usually says. I do not think they agree with that, especially not if they also have these huge needs to invest in the future.
I also want to inform the Minister of the differences between the budget that the SD-led government has presented and the budget that the Social Democrats have presented. We are allocating 6 billion more in general government grants. In total, in the entire budget, we are allocating 15 billion more to municipalities and regions than the government does - just so that right is right.
Then I still cannot refrain from commenting on the completely reasonable comparison. When half of the total, large space is primarily allocated to tax cuts, largely with precision targeting those who already have, it is offensive. I think it is above all offensive that there seems to be a difference between people and people. Those who already have need a few more carrots to work more. But those who do not have apparently need a little more whip. This is unworthy.
But as I said: I want a bit more answers in the vaccine issue.
Statsrådet Erik Slottner (KD)
Madam Speaker! Eva Lindh continues to speak about the "SD-led government." It is the interpellants who want to maintain that debate. I do not intend to give in. When such types of falsehoods are presented in this chamber and there is a school class here, who have now left the gallery, I think it is reasonable to provide factual information about how things actually stand.
Linus Sköld speaks about some kind of leash being held. It is at least not a choke leash, because I don't actually feel particularly choked or leashed by any SD party. I feel that we cooperate well with each other and that it works very well. I believe rather that it is the case that the Social Democrats are a bit taken aback and concerned about how well the cooperation in the Tidö constellation actually works.
I believe possibly that the Social Democrats are even a bit jealous considering the day when one might eventually cooperate with Vänsterpartiet, Miljöpartiet, and Centerpartiet in some government constellation. God forbid I belong to any of the three parties when one relates and refers to a leash! It might say something about how the Social Democrats view coalition partners – as some one walks around and holds on a leash. That is not how I view cooperation with my bourgeois colleagues.
Due to this issue, I did not, Madam Speaker, in my previous contribution manage to answer Eva Lindh's question in her first contribution, namely what the municipalities' opinion is and whether they desire increased state influence when it comes to this. I have discussed several VA issues with, among others, SKR. I have primarily gathered that dialogue with the municipal sector. I make many individual municipal visits around the country, but I conduct the collective dialogue with SKR.
This question arises. Many are concerned about how to finance a large expansion of the water and sewage network in the future. The investigation also revealed that it is very unevenly distributed regarding where the needs are greater or smaller. This is, therefore, a concern.
It is not entirely unexpected that SKR many times expresses a wish for increased support in this matter. What I have heard is that it is not much more concretely formulated than that when it comes to exactly how this support would look.
The investigation arrived only a couple of weeks ago, and the members know that the issue now needs to be prepared and is being prepared in the Government Offices and that I, as a minister, cannot comment on individual proposals before that preparation is complete. We will have to return to the chamber when the preparation period is over, the proposal has been out for consultation, and the government has taken a position on the issue. We are not there now, so it is too early to demand an answer from me as an individual minister.
When I say that things are brightening for the municipalities, this is not something that only I and the government or the Ministry of Finance are saying, but SKR is also saying it. SKR's forecasts are very clear that things are brightening. That things are brightening does not mean that it is midsummer eve just yet and that it is very bright. But that we are now entering a brighter period and that the economy looks better in the coming years is very closely linked to the fact that we have won the battle against inflation, what we can see now, and that the economy is turning so that tax revenues are expected to increase ahead.
I also think Linus Sköld is a bit careless when he says that the compensation for the ministers increases by 4,000. The compensation is made in the form of fees, and we have a special fee committee that determines them. The government, therefore, has not decided on any compensation when it comes to the ministers. I also think this can be important to point out if someone listening to this debate believes that the government would have made any such decisions.
Not even half of the reform space went to tax cuts, and of the tax cuts we did make, the lion's share went to low- and middle-income earners and pensioners. This is also important to point out.
Linus Sköld (S)
Madam Speaker! Thank you, Slottner, for the correction! Of course, it is the disposable income for the ministers that increases by 4,000 after the turn of the year, not the salary.
I note that Erik Slottner thinks the cooperation with the Sweden Democrats is working so damn well. He has completely incorporated the Sweden Democrats into this cooperation. I assume then that the proposals on the reduced right to an interpreter in healthcare, abolished mother-tongue instruction, defunded development research, large savings on aid, and the reporting law are Christian Democratic. This is now politics that is Erik Slottner's - good, then it is established. And then I wonder what the Christian Democrats have any right to exist at all.
I think we should return to the question, namely how the state should assist the municipalities in resolving the accumulated investment debt of 600 billion kronor, which, according to assessments, increases by an additional 10 billion annually, for water and sewage facilities around the country.
Erik Slottner says that he cannot now take a position on the investigation's proposals. But he has given a hint in his initial response, which I have also received in writing and intend to quote in order to ask Erik Slottner to clarify what he means: "The government has shown that economic supplements to the municipal sector are prioritized when the needs are great."
Well, that was zero kronor in supplementary funding next year. The 16 billion that the Minister boasted about earlier were far from sufficient to meet the inflation during the two years we are talking about.
Furthermore: "The Government now sees a need for measures that in the long term promote the efficiency and capacity of the municipal sector and also allocates funds for these purposes in the budget bill for 2025."
Statsrådet Erik Slottner (KD)
Madam Speaker! The Christian Democrats are, as is known, part of the government and naturally stand behind the government's policy in all areas. Then Linus Sköld knows, not least from the Social Democrats' time in a coalition government with the Green Party – otherwise, the Social Democrats are used to governing themselves, but once they also governed together with the Green Party – that one also makes compromises. All proposals that come from the Government Offices are, of course, not pure KD proposals; that would be very strange.
But I stand for and must say - and it is not only I who says this here, but it is a general perception - that the Tidö cooperation and the government cooperation have proceeded more smoothly than many political commentators and representatives of the opposition believed after the Tidö agreement was concluded. I note that this cooperation is working well.
This does not mean that it is completely free from conflicts or disagreements. Of course, such things arise when four parties cooperate. But it has gone more smoothly and better than many expected immediately after the Tidö Agreement was concluded.
Then the question was what I meant in my answer by that this shows that the government injects money when it is needed. We did that because 2023 and 2024 were very tough years for the municipalities' finances. That was what I meant – then we inject money. In the first budget, a third of the reform space went to increased appropriations to municipalities and regions. In the second budget, the one for this year, 40 percent of the reform space went to municipalities and regions. That is what I mean by this.
Furthermore, we know that the municipal sector previously came from years with very large surpluses, which the vast majority of municipalities have placed into result equalization reserves that have now been able to be used as a kind of airbag. Now we are entering brighter times. Even if we have to wait a little until Midsummer Eve, we are moving towards brighter times also regarding the economy in the municipalities, which will be very good for welfare moving forward.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.