Response to interpellation 2024/25:242 on the effects of cost increases for Swedish families with children

Finansministern Elisabeth Svantesson (M)

Madam Speaker! Mikael Damberg has asked me if I have conducted an analysis of what has improved for families with children who are struggling and if I can report the results of the analysis. Mikael Damberg also asks on what grounds I and the government have made the decision that the Swedish economy benefits more from lowered taxes for high-income earners than from directing money to ordinary households, including by ensuring that the special housing supplement for vulnerable families with children is made permanent.

The government's policy has primarily benefited those with low and medium-high incomes during the mandate period; this is shown by the analysis in the autumn budget bill. We have as our goal to build a wealthier and safer Sweden for everyone in society. Therefore, growth reforms and reforms that strengthen households' purchasing power were needed, which are also the government's priorities in the 2025 budget. It is only a growing economy that can sustain future welfare and higher wages.

We are lowering taxes on work and pensions primarily for low- and middle-income earners and removing the highest marginal taxes to increase the incentives for work, education, and effort at work. Among others, the Swedish National Audit Office assesses that the lowered marginal tax increases tax revenues. These are reforms that favor long-term growth, which leads to more people entering the workforce and strengthens people's opportunities for self-sufficiency.

Lower taxes on work and pensions simultaneously mean that we strengthen households' purchasing power - an important measure to compensate wage earners who have seen their real wages decrease as a result of the high inflation. A family with a police officer and a nurse, for example, will have 9,000 kronor more in their wallet in 2025 compared to 2024. At the same time, sickness benefit and many other benefits have been adjusted for inflation, unlike wages. The Government is also making further investments to strengthen the most vulnerable households by extending the temporary supplementary grant to families with children receiving housing allowance and increasing the sickness or rehabilitation allowance in special cases as well as the housing allowance.

At the same time, major investments in infrastructure are being carried out. We have presented the largest research and innovation proposal ever, and we are implementing tax changes that make it easier to run businesses. Politics is about priorities, and the government prioritizes building a wealthier and safer Sweden for all groups in society.

The speech at riksdagen.se, in Swedish (opens in a new tab)

Mikael Damberg (S)

Madam Speaker! Thank you, Minister for Finance, for the answer! I believe we can agree that the recession and the cost crisis have hit ordinary households very hard. Ten years of real wage increases disappeared, and they are now beginning to be slowly built up again.

An ordinary family with two children pays almost 30,000 kronor more for grocery bags today than they did a few years ago. It became much more expensive to live regardless of how one lives. The high costs arose immediately for those who have borrowed for their housing in the form of a villa or apartment, and now continued rent increases will come for those living in rental apartments in the years ahead.

All of this directly affects household finances. One could have had a general discussion about it, and the Finance Minister could have provided a reasoning on this and on her principles for the tax policy. She also speaks about how a family with children, with a police officer and a nurse, is affected by the government's proposal.

I could enter into a large discussion and state that a nurse and a police officer with two children would get more money in their wallet with our budget alternative than with the government's policy. But that is still not quite where the interpellation lands.

The question I wanted to ask concerns the groups that have the absolute smallest margins and who are also affected by the cost crisis - perhaps much more brutally than how we are affected. These are quite brutal figures. Almost every other single parent with a lower income has difficulty putting nutritious food on the table, and it is Sweden we are talking about here. In connection with the most recent Christmas celebration, almost half of the single parents with slightly lower incomes stated that they were considering or were forced to borrow money to buy Christmas presents for their children.

This is a group in society that is neither particularly discussed nor visible, but we know that single parents are those who are hit hardest by the cost crisis in several different ways. Their margins are very small.

At the end, the Minister for Finance says, somewhat provocatively in my opinion, that politics is about priorities. That is exactly what my interpellation is about. We can boil this down to the question I am asking: What has improved for the families with children who are struggling? By that, I mean, for example, a single-parent nursing assistant with children, who receives the housing supplement. We introduced a temporary housing supplement, and it was increased at some point. Now the government chose to cut it quite significantly. It directly affects this nursing assistant with children in her everyday life.

Then the analysis is that certain supports are to be withdrawn because reality has changed. People have received higher wages, they have received reduced costs for rent and food prices have fallen back. What has improved for the single mother with a weak economy who receives the housing supplement? What has improved in her finances that justifies the government now reducing that support?

People talk about not having money, about not being able to afford it. But the government did have the means to lower the tax for those with high incomes by thousands of kronor a month. Obviously, it was not an economic issue. It was not that they didn't have money; they wanted to make this change to the housing supplement for those who are most vulnerable.

I cannot draw any other conclusion than that it is not the nursing assistant who is most affected by this, but her children, who already today live in a completely different situation than most children around Sweden.

My question remains: What has actually improved for the most vulnerable families with children that justifies the government's cut in the latest budget?

The speech at riksdagen.se, in Swedish (opens in a new tab)

Finansministern Elisabeth Svantesson (M)

Madam Speaker! The answer is that during this period of high inflation, it actually has not become better for anyone. Let us start there. High inflation has eroded savings and wage development and made everyone poorer. Naturally, those who already had small margins before have had it even tougher.

Therefore, it is quite simple for me to explain what the government is doing. We inherited an inflation of 9-10 percent and have done everything we can to combat it. Because we saw that households were hit very hard, we have supported them in the meantime. We now continue to strengthen the purchasing power for households, actually regardless of what the households look like.

Fundamentally, those who work have lost the most, which Mikael Damberg was also touching upon. We have indexations for many of our benefit systems and compensations, from maintenance support to guaranteed pension and much more, while those with low incomes have not received any compensation. That is why we have now lowered taxes for two years in a row, and I hope that we will be able to do it more times. It is also why we have lowered fuel prices through both the reduction obligation and tax. This is important, just as we extended the supplement in the housing allowance.

Mikael Damberg's question is, however, very relevant. There are many groups that have struggled and are still struggling. I want to specifically highlight a group that is perhaps one of the most vulnerable. It is not the largest, but it is very vulnerable. It is those who have had what I mentioned earlier, namely sickness benefit in special cases. There, one has not had any increase for very many years. Now we have made an increase of approximately 40 percent, if I remember correctly. This is a group where no compensations have been indexed but where one now gets a large difference compared to before. I thought it was very important to do, precisely because this is a group, often with children, that is having a very tough time.

My goal is, of course, to strengthen all households, to make Sweden and the Swedes wealthier, to ensure that we achieve better growth and to ensure that we continue to support households and strengthen their purchasing power. That work has not finished; it has only just begun.

The speech at riksdagen.se, in Swedish (opens in a new tab)

Mikael Damberg (S)

Madam Speaker! It is good that we agree that Sweden should become wealthier. We can argue quite a bit about whether you support ordinary households sufficiently. I can only state that the example family that the Finance Minister himself raised in the interpellation response would have had more money in their wallet with our policy than with the government's policy.

But that is not what it is about. What is happening now in the Swedish economy when inflation falls and interest costs drop is that quite a few families are affected positively. I have a mortgage myself; it is clear that the costs for my mortgage are decreasing. It is quite large groups in society who notice: Oh, something is happening in the economy of society now. Now we get a bit more money in the wallet. We have slightly larger margins. With the government's tax cut and tax bonus for those who have very high incomes, on top of that, one gets very much money in the wallet.

But it is something that breaks the trend here, namely that the government in this budget is moving forward with a reduction of the housing supplement for the poorest families with children in our country. You did not have to do it, Finance Minister, but you are doing it deliberately. Then my question is: What has changed in their everyday lives? They have no housing loans, I can guarantee that. They need to shop, and food prices have not fallen. Their rents will now rise in the upcoming rent negotiations because the interest costs are essentially going into the rents, albeit with some delay. Their margins will continue to shrink.

All evaluations of distribution policy in Sweden show that single parents are one of the most vulnerable groups in our society. Yet, you choose to lower the compensation for that group. This is what the Finance Minister chooses with precision to avoid speaking about.

What is it that justifies a reduction in the compensation to the families with children who are most vulnerable in our country? Is the risk not very great that those who pay the highest price for this are the poorest children in our country? Is it really a reasonable budget policy in this situation?

The speech at riksdagen.se, in Swedish (opens in a new tab)

Finansministern Elisabeth Svantesson (M)

Madam Speaker! As soon as we took office, we increased the supplement to the housing allowance, precisely to strengthen those who have it the toughest. It is important to point out. I do not avoid speaking about it at all. But I also see that there is a great need to compensate and lower the tax for those who work, especially low- and middle-income earners. We have now done that for two years, so that their finances can be strengthened. They should not be strengthened primarily through subsidies, but through them keeping more of their wages. Here I know that we do not always share the same view.

I have been here in the chamber and lowered the tax very many times for both nursing assistants and nurses and for everyone else who works. I hope to be able to continue doing so in the years ahead as well.

I still just want to remind – I have not heard any Social Democrat mention this – that the group I mentioned, those who have sickness or rehabilitation allowance in special cases, is an extremely vulnerable group. Their children are also very vulnerable. Here we are now making large increases. They have lost enormously much during the years with inflation.

With that said: First and foremost, more people should have a job to go to and be self-sufficient. One should also not pay higher taxes than one has to. That is why we see that we can lower the tax. Unlike many other parties, we can prioritize doing many things at the same time - increase growth and strengthen defense and police and simultaneously lower the tax for those who work.

Many of our compensations have been adjusted during these years. People have been compensated. In Sweden, we have a strong system. It is good. It ensures that the gaps do not widen as they do in many other countries that do not do this in this way.

Inflation has been fought. Households have been supported during these years. Now it is time to continue strengthening purchasing power. That, I can promise, is my priority. At the same time, I want to see the Swedish economy grow so that we leave behind an economy that is stronger in 10, 15, and 20 years than it is today, so that both Sweden and the Swedes can become wealthier and so that we can finance all the great needs we have in the years ahead.

The speech at riksdagen.se, in Swedish (opens in a new tab)

Mikael Damberg (S)

Madam Speaker! After these years of very low growth in Europe's bottom tier, Sweden needs to become wealthier to enable both real wage increases and welfare investments. We also need to have a good policy that puts money in people's pockets to get out of this recession. That is good, isn't it? The problem is that the government's idea of this has not worked as intended.

But I insist: This interpellation is about the poorest families with children. Now the Finance Minister is talking about purchasing power being improved. Will purchasing power in 2025 be improved for the poorest families with children in Sweden? You can count on the tax cut, Finance Minister. We are doing the same tax cut for low-income earners in our budget, so it makes no difference. But what you are doing is lowering the purchasing power for the poorest families with children in 2025. Or do you have any other calculation on this than the one I can make?

Families with children will have less money in their wallets next year, and it is a conscious choice you are making. What has changed in their everyday lives in 2024 that makes it possible for us to reduce the support for the poor moving forward? The Finance Minister has in no way described that any cost has decreased for that group in a way that would justify the reduction.

The best motive the Finance Minister has had is that another group, which is also extremely vulnerable, receives an increased compensation with this budget. But I have not perceived that any parliamentary party - I might be wrong - thinks it is stupid to actually adjust upwards the compensation after so many years without the compensation having been indexed. But that does not help the poorest families with children. They still have to buy food. They still have to ensure that the children can participate in an extracurricular activity and that they get a winter jacket when it is cold outside.

Will the purchasing power for this group increase or decrease in 2025? Why do you want to reduce the purchasing power for the most vulnerable group of families with children?

The speech at riksdagen.se, in Swedish (opens in a new tab)

Finansministern Elisabeth Svantesson (M)

Madam Speaker! We want to strengthen the purchasing power for everyone. That is the whole point. We work in different ways and with different methods. Now, Mikael Damberg has used his time to talk about the housing allowance that we actually increased and which is now higher than during his time. That allowance will look different in the years ahead. But we are not finished with next year's budget. Let us return and see how the development turns out. My vision is that I want to strengthen the purchasing power of Swedish households every day, especially those who go to work and contribute every day.

Madam Speaker! We inherited high inflation, low growth, and high unemployment. We are working bit by bit to change this, and I have good hope that it will succeed. But just as we said earlier, there are great uncertainties in our global environment. We take it one day at a time, but Sweden is well prepared economically and politically to meet also more difficult times if that should be the case.

Let me finally return to the ordinary people. The tone is high regarding those who struggle the most. Those who live and work in Stockholm - and they are many - have had increased taxes for two years in a row. The income tax and the municipal tax have been raised. That does a lot for the people that Mikael Damberg talks about. Furthermore, the tax has been raised in the region, and that becomes quite a lot for those who have small margins. It is incomprehensible that one prioritizes raising taxes in the time we are currently in. Then we can absolutely deliberate on exact levels for different subsidies, but ensuring that people get to keep a bit more of their own salary is a good investment.

The interpellation debate was hereby concluded.

The speech at riksdagen.se, in Swedish (opens in a new tab)