Response to interpellation 2024/25:84 on the child allowance and the finances of families with children
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
M believes that the child allowance is not targeted because it also covers high-income earners 1 and that increased child allowance is an expensive reform that does not solve economic problems in the long term 2. M advocates instead for strengthening the work principle through an enhanced job tax credit 1 3 and argues that tax cuts benefit an average person 4. M argues that S's policy creates an economic cycle 5. S wants to increase the child allowance and the student grant to provide direct support to families with children in a cost crisis 6 7 and argues that the government's tax policy increases inequalities 7. S argues that household finances are strengthened through an increased child allowance 7 8. SD argues that tax cuts provide increased purchasing power for a normal family 9 and that work is the foundation of a secure economy 10. SD argues that the temporary supplementary allowance is a targeted tool for low-resource households 10.
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)
Mr. Speaker! Arber Gashi has asked me why I do not advocate for an increase in the child allowance in this continued tough economic situation for the country's families with children.
The general child allowance is a part of the economic family policy and aims to compensate for parts of the cost of the child. It also aims, among other things, to reduce the differences in the economic conditions between households with and without children. The child allowance is provided as a general allowance to everyone who has children and is covered by the Swedish social insurance. Since the child allowance is consequently also provided to those with high incomes, it is not accurate to make changes to the child allowance if the purpose is to strengthen the economic situation for the families who have it hardest. Increased child allowances affect as many people in total in the two highest income groups as in the lowest. That an allowance which hits those with the highest incomes also hits low-income groups is therefore difficult to justify as an investment in poor families with children.
The government has, during the high inflation, conducted a well-balanced fiscal policy that has taken us out of the very worst situation. The recovery of the Swedish economy is expected to continue during 2025. In order to strengthen the economic situation for families with children who are struggling, the government has, during the period of high inflation, extended the temporary supplementary grant within the housing allowance on four occasions. We have also increased the supplementary grant when the needs were assessed as greatest.
As the difficult economic situation is now easing and the future prospects for households thankfully look brighter, the government proposes in the budget bill for 2025 that the supplementary grant be extended until 30 June 2025 and scaled down from 40 to 25 percent of the preliminary housing allowance. This is a well-considered and purposeful measure to continue supporting households that are in economic distress.
Mr. Speaker! The economic family policy shall contribute to a good economic standard of living for all families with children. The child allowance and the housing allowance are important for families who are struggling financially, but the best tool to permanently break economic vulnerability and counteract a low economic standard is own income from work. More children must see their parents go to work; it is the best way to protect them from a low economic standard. Therefore, the government is actively working so that more people can enter the workforce and so that it pays more to work. We have presented proposals for an enhanced job tax credit primarily aimed at full-time workers with low and medium incomes. It makes it more profitable to work and is also a fair way to distribute – this is to build Sweden both wealthier and safer.
Arber Gashi (S)
Mr. Speaker! Thank you to the Minister for the answer!
The child allowance has long been one of the cornerstones of Swedish family policy and is quite unique in being a general support, independent of income. That all children, regardless of the parents' economic situation, can receive the same support is an important principle that contributes to reduced economic uncertainty and strengthens the situation of families with children.
With increasing costs for food, clothes, and other necessary expenses, many more families with children risk falling into a difficult economic situation than today. A generally increased child allowance would be a direct and effective support for these families, especially now when Sweden has gone through a period of high inflation and many families with children are struggling to make ends meet.
We in Sweden are coming out of the inflation much poorer than we should have had to, and we continue to be in a major cost crisis. Ten years of real wage increases have been erased, and ordinary Swedes with ordinary wages cannot make the economy work.
That is why we want to increase the child allowance and also the student grant by 200 kronor per month.
Mr. Speaker! Not increasing the child allowance but temporarily increasing the housing allowance, an increase that is now being phased out during the next year, the Minister of State just called a well-considered, purposeful measure to continue supporting households in economic distress - because the future prospects look brighter for the households. But in the report Economic Difficulties for Families with Children from 2024, published by Hyresgästföreningen, Majblomman, Svenska Röda Korset, and Rädda Barnen, it appears that a full 42 percent of households with low incomes have been forced to borrow money to cover necessary expenses during the last six months.
This morning we could read about increased food prices, with talk that things are looking brighter. Food prices increased by 0.2 percent in October, according to new statistics from Matpriskollen. The increase was therefore as large as the month before, which was the largest increase since February this year. In addition to fruit and berries becoming more expensive, prices are rising most on dairy products, which is alarming because dairy products make up a full 18 percent of total grocery sales. It is a large part of what we buy and eat. Something that is also alarming is that continued increased food prices are also expected during the winter. The Minister must therefore have meant the very richest when she spoke about the brightening future prospects, not the ordinary families with children.
Why do I then raise the question of the child allowance? Well, because we know that the child allowance has a strong redistributive effect. It reaches many families with children who are struggling and having it tough financially and gives them an important support. Our proposal in the budget to increase the child allowance by 200 kronor a month would provide direct help, here and now, to families with children across the country, especially to those who have it toughest. I wonder therefore again: How can it be more prioritized to lower the tax for the very richest instead of, for example, increasing the child allowance when we are quite obviously still in a cost crisis?
Caroline Högström (M)
Mr. Speaker and Minister! In the Social Democrats' Sweden, one would rather reinforce the dependence on benefits than let more people keep more of their own hard-earned money. But, Mr. Speaker, in the Moderates' Sweden, you get to keep more of your salary. This is a policy that is most important for those with small margins, for those who work in healthcare and elderly care. Their work must pay off.
It is precisely there that the marginal effects hit hardest. When the Social Democrats propose increased benefits, the respect for those who work decreases – it is often about women in the public sector. So, one is not conducting a fair policy. Their work must pay off.
Increased child allowance sounds like a pleasant measure; it feels a bit good in the stomach. But we must also consider the long-term consequences. The tough economic situation we face is not solved through expensive reforms that are not accurate. It is not solved by an increased child allowance. We get out of the tough economic situation if we get more people moving from benefits to work, if companies get to grow and flourish, and if we get more growth.
Mr. Speaker! I hope that others in the chamber note the tone when it is spoken of tax cuts for the very richest while the child allowance is actually not so accurate. It is distributed to both members of parliament and millionaires, so it does not have the effect that is hoped for.
The low increase that the Social Democrats propose is very expensive from a socio-economic perspective, and it does not generate the positive effects they imply. The tax cuts we propose in our budget, on the other hand, have a positive effect. They create more growth and ensure that people keep more of their own money.
If the Social Democrats seriously want to support households, they should also support an economic policy for increased growth. They should support tax cuts from the start that ensure people can keep more of their own wages and their own diligence.
No, I think that perhaps it is a bit of populism that is showing itself here. Child benefits are being sprinkled around and they are being increased, but the goal is completely missed. Sweden needs a policy for those who work hard, because their work must pay off.
Daniel Persson (SD)
Mr. Speaker! I would like to begin by thanking the Minister for the answer to the interpellation.
The interpellor advocates that the child allowance should be increased, and that is also what the Social Democrats propose in their budget motion: that the child allowance should be increased by 200 kronor per month. The tax reliefs that the Tidösamarbetet implements next year mean that an average wage earner can expect a tax reduction of approximately 2,600 kronor per year, or just over 200 kronor per month. It is the same amount that the interpellor's party considers a reasonable increase of the child allowance, approximately 200 kronor more per month.
One can also take note of how the banks' economists track how an average household will be affected economically during 2025. They conclude that an average household looks to be able to get more than 800 kronor more in their wallet every month thanks to tax cuts. Collectively, political reforms and tax cuts provide an increased purchasing power of approximately 3,300 kronor per month during 2025 for a normal family. There are thus signs of relief in the economy for households.
Mr. Speaker! The interpellor also argues that tax cuts are a poor priority as they benefit high-income earners. But even an increase in the child allowance means that high-income earners are also benefited.
The interpellation can be interpreted as the interpellator considering that high-income earners should pay more in tax. One can reflect on what is fair. Should it pay off to develop one's own competence, study, and take out student loans? I think this is worth mentioning in this context since the interpellation addresses taxes for high-income earners.
A clear example of what the progressive tax means in practice can be found in an article published by Svenskt Näringsliv. There, a high-income earner with 150,000 kronor per month is compared with an average-income earner with 35,000 kronor per month. Calculations from some banks made after the announcement of reduced marginal taxes show that an average-income earner with a monthly salary of 35,000 kronor will, on average, pay 7,700 kronor in tax every month during the next year. For a high-income earner, it will be 65,400 kronor in tax.
This means that the high-income earner has 4.3 times higher salary than the average-income earner but pays 8.5 times more in tax. The high-income earner therefore pays more tax than eight average-income earners combined. It is worth taking into account in this context, I think.
Statsrådet Anna Tenje (M)
Mr. Speaker! We have heard the members describe the economic situation. It is beyond any doubt that Sweden and also large parts of the world were hit hard by both the corona pandemic, historically high inflation, and high interest costs. The government pursued a responsible economic policy with the aim of breaking the high inflation, which eroded households' wallets and made the Swedish people poorer, as quickly as possible. All households were affected by the inflation and the recession, but economically vulnerable households are hit particularly hard in such environments.
That is why the government also acted very promptly to support households in general and the weakest households in particular. If one looks at the effects on the households' economic standard as a result of the government's proposals and notifications during the mandate period, one sees very clearly that the economic standard, in percentage terms, increases most in the tenth of the population that has the lowest economic standard and least in both of the top income groups.
But the fight against inflation is now won, and now we are moving towards a more normal situation despite the fact that there are great risks in the economy. There is war in our immediate vicinity and a growing concern in different parts of the world - these are, of course, major uncertainty factors.
At the same time, we now see a light on the horizon; both Member Högström and Member Persson have accounted for this previously. The Government has now also presented an expansive budget in order to get the Swedish economy moving again. Now that inflation has been defeated, the Government has created a larger space to be able to do exactly this.
The government has received the trust and mandate of the Swedish people to re-establish the work line. The best insurance against economic exclusion is to have a job to go to. It is also the guarantee for our common welfare.
As I said earlier, more children must get to see their parents go to work, and more households must be lifted out of poverty and strengthened, so that they stand better equipped in the face of the next crisis. There are no state subsidies that can replace the value of having one's own job, one's own salary, and one's own livelihood. It must become more profitable to work than not to work.
Arber Gashi (S)
Mr. Speaker! Thank you again, Minister, for the answers! We Social Democrats are proposing an increase of the child allowance and the student grant by 200 kronor per month. We also propose a permanent increase of the housing allowance for families with children and, furthermore, a tax cut for ordinary people. The government, therefore, considers this to be a bad idea. It is even called populism to increase the child allowance, something that we have done several times and which is demanded by many families with children today.
Instead, you propose tax cuts for the very richest, so that it should start to pay off to earn 125,000 kronor a month, as the Finance Minister expressed it. Of the reform room of 60 billion, half goes to tax cuts. Those who benefit the most are those who earn the best - like the Minister himself, who, if I remember correctly, has a salary of over 150,000 and gets 4,000 kronor more a month next year - while a vulnerable family with children in a home where one also works gets 775 kronor less in their wallet.
In this year's equality index, Sweden has dropped like a stone. In four years, we have plummeted 14 places and are now the worst in the Nordic region. Sweden is in 24th place out of 164 countries. This can be compared to our wealthy neighboring country Norway topping the list, Finland is in 5th place and Denmark is number 6.
Oxfam, which is an international organization working to combat poverty and inequality worldwide, argues that it is the Swedish tax policy that has led to us losing positions. That is exactly how this government wants it, obviously. The previous policy leads to nothing other than increasing inequalities. The current tax policy is intended to benefit those who already have the best, while those living in poverty shall bear the great burden.
You claim that these tax cuts will promote growth and create more jobs. But we have seen this before. The idea that if only the richest get a little more money, it will trickle down to the rest of society has been tested many times, especially by the Moderaterna, and it has failed just as many times. It leads to increased inequalities - not to increased welfare or to security for ordinary people.
In order for growth to increase, household finances need to be strengthened so that they can consume instead of just keeping their heads above water. Your tax cuts, especially for those who already have the best of it, do not make life easier for a single parent who sees their housing supplement decrease next year and has not received an increased child allowance but works and has an income.
I want to turn against the rhetoric that it should pay to work - it is clear that it should. But when you speak about it, you mean that it should pay to earn 125,000. But working as a childcare worker or within Kommunals' agreement areas obviously does not pay off with your politics. I do not understand that this is the answer one gets when we talk about child allowance, which should be able to support families with children in a time of great crises.
I wonder if I have understood correctly: Must the gaps in society increase for growth to increase, according to the Minister and the members here?
Caroline Högström (M)
Mr. Speaker! I thought the Minister described exactly the advantages of the pursued policy and how it actually benefits the whole society and all parts of our society.
Sweden is a fantastic country to live in. We have a solid safety net that exists to be a helping hand when life is difficult. The idea is that the safety net should be temporary in the vast majority of cases.
In order for Sweden to stand strong and for our safety net to be as extensive as it is, we need more people to participate and contribute. Sweden has been in the grip of sky-high inflation at the same time as we have had a recession; it is a situation that hits those with small margins the hardest. Given the high inflation, one should also know that large parts of our insurance and benefit system have actually been adjusted upwards, because many of them are linked to the inflation development, simplified slightly.
Now the Moderate-led government has won the battle against inflation and can focus on kickstarting the economy and implementing measures against the recession that pressures both companies and households. This is the solution to what the member describes. We must get out of the recession, and we do not do that through more and more subsidies. We will not get out of the recession through an increased child allowance. On the contrary, we will get out of the recession through the work principle, by ensuring that it actually pays to work, so that more people work overtime and so that companies can flourish.
In many cases, people have a rather contemptuous view, I think. It is described as a tax cut for the richest. An average person in Norberg Municipality receives 3,500 kronor per year in tax cuts with our budget.
We will have debates on this ahead. I truly look forward to that, because I can state that there is a choice of path, Mr. Speaker: the work line versus the benefit line.
Daniel Persson (SD)
Mr. Speaker! This is my final contribution, so I would like to take the opportunity to thank the Minister for the interpellation debate.
Approximately one in ten families with children live in economic hardship, which is mentioned in some way in the interpellation. It should be pointed out that many families have had it tough. We know that inflation is a contributing cause to the fact that the economic standard for households with children shows a decline. But inflation is now estimated to be at a low level. We also see an economic brightening ahead, and the recovery is expected to continue during 2025.
The temporary supplementary grant to families with children receiving housing allowance is extended until June 30, 2025. It is a precise tool because it is specifically targeted at low-income households and is an important measure to support households in a time of increased living costs.
The child allowance is admittedly a welcome financial supplement for families. But for families to have a secure economy, the parents need a job to go to. If the parents already have a job to go to, we must ensure that it pays to go and work every day. Work is the foundation of a secure economy and self-sufficiency.
Here in the chamber, we see once again the difference between the Tidösamarbetet's working line and the socialist parties' contribution line.
Statsrådet Anna Tenje (M)
Mr. Speaker! For an outsider, it will probably be a bit difficult to make the Social Democratic logic add up. It seems as if the households that earn so much money that they are to be hit with precision by the Social Democratic tax increases at the same time are having such a hard time that they must receive increased child allowances.
At the same time, this summarizes the Social Democratic distribution policy very well: Higher taxes for hard-working parents of small children shall finance increased child allowances for hard-working parents of small children. At best, it creates economic circulation, but at worst, it creates something we have seen many times both in Sweden and abroad, namely a poor growth policy where it pays too little to educate oneself, too little to work, and too little to be diligent and industrious.
It also creates a poor distribution policy where high-income earners, millionaires, cabinet ministers and members of parliament receive as much in increased child allowance as economically vulnerable families. This is well illustrated by the fact that there are as many people in the two wealthiest income groups affected by the Social Democrats' proposal on increased child allowance as in the poorest income groups. That a grant to millionaires also hits low-income groups is therefore difficult to justify as specifically an investment in poor families with children.
One can also look at what it looks like when the Social Democrats get the opportunity to govern. If the member is so determined to help specifically child-rearing families with weak finances, he should have a conversation with some of his colleagues in Stadshuset, or why not Landstingshuset, just a stone's throw from here. There, the member's party friends see through the tax increases that many child-rearing families now definitely will not get to share in the government's tax cuts. Karin Wanngård and Aida Hadzialic raise the tax by 6,000-7,000 kronor per year for an average family with small children in Stockholm, which is hardly covered by the Social Democrats' proposal of increased child allowance of 2,400 kronor.
Someone very wise must have summarized the Social Democratic policy like this: Everyone should get more benefits, but no one should be able to live on their salary. I think that is quite telling.
The opposite of this is the policy pursued by the Moderate-led government. It takes its starting point in making it more profitable to work, more profitable to educate oneself, and more profitable to be diligent and industrious. It encourages taking that extra evening shift, taking your first job as a team leader, or jumping on that training that can lead to a job.
We are also continuing to work on the subsidy reforms that were previously announced with activity requirements, qualification for welfare, and subsidy ceilings, precisely because jobs are the best guarantee and insurance against exclusion and economic vulnerability.
Arber Gashi (S)
Madam Speaker! So, you Moderates are not in favor of an increase in the child allowance because it will also benefit the rich. Imagine if you had thought the same way in tax policy! Then we would have had a completely different discussion here today.
I completely agree with the concept that it is extremely important for children to see their parents go to work every day. Therefore, it is concerning that the government's labor policy has been very unsuccessful so far, with the highest unemployment in many years and the second highest youth unemployment in the EU.
The frustration I feel regarding Anna Tenje's rhetoric is that the government and the Sverigedemokraterna are unable to see, or perhaps do not want to see, that it is ordinary people, working people, who are being completely brought to their knees. You say that it should pay to work, but what you mean is that it should pay to earn 125,000 kronor a month. It should not pay to work for single parents. They will receive almost 500 kronor less every month with your budget. They do, of course, receive about 130 kronor in the job tax credit you are so proud of, but that small amount is very quickly consumed for the single parents who will now see a phasing out of the temporary increase in the housing allowance. With a Social Democratic budget, they would have received increased child allowance. They do not get that with yours.
An increased child allowance would mean stable and predictable support for families with children during these periods. Ultimately, it is also about the best interests of the children. Economic basic security in the form of an increased child allowance means that all children get a more stable upbringing environment. It is an investment in both today's and tomorrow's society. Of course, it does not play as large a role for someone who has Anna Tenje's salary, but it means the whole world for those who are living on the margins right now.
Statsrådet Anna Tenje (M)
Madam Speaker! Many thanks to the interpellator for the interpellation! Many thanks also to members Högström and Persson who participated in the debate! I think it has been a very good debate that has clarified the differences between our various parties but also which solutions will make Sweden richer, safer, and freer in the future. The welfare line has been set against the work line, and increased taxes have been set against increased incentives to work, to be industrious, and to reward education.
Madam Speaker! Even though the inflation crisis is now over, even though we still have a recession and even though it is still a restless situation in the world, we still see a brightening for the future. Sweden now needs to be restarted so that we can manage both today's and tomorrow's challenges and problems. This is done by strengthening households in the long term through work and by getting the economy going again, and this is what the government is doing now.
I look forward to continuing to debate these important issues in the chamber ahead. Many thanks for the interpellation debate today!
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.