Response to interpellation 2025/26:244 on the forest industry
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
The debate concerned the decline of the forest industry and its impact on the labor market and public finances. L argues that the decline has a limited impact on labor market policy expenditures as many have skills for other jobs 1. L emphasizes that Sweden has functioning support for short-term work and that they want to avoid taxpayers' money being used to prop up businesses that are not viable 1 2 3. S argues that the government does not sufficiently analyze how the loss of the forest industry's export net affects the state budget 4 5. S criticizes L for not proceeding with the parties' proposals for a reformed short-term work 4 6 5.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Arbetsmarknadsministern Johan Britz (L)
Mr. Speaker! Isak From has asked me if I have made any analysis of how the decline in the Swedish forest industry affects the labor market budget and if I have considered taking measures to help the forest industry survive the winter by reforming the regulations surrounding short-term layoffs.
I would like to start by thanking Isak From for this important question.
Employment has decreased within the forestry industry in recent years, primarily within the timber industry. The changes have been smaller within forestry as well as the pulp and paper industry. Many who work within the forestry industry have skills that are in demand on the labor market, which should mean that the majority of those who are laid off can move on to other work. Given that, the decline in the Swedish forest industry has a limited impact on expenditures within labor market policy.
Sweden has a functioning support for short-term work. Companies that fall into temporary and serious economic difficulties can apply to Skatteverket to receive support for short-term work. In November 2022, the government received the report A new law on support for short-term work – a more predictable, simplified and strengthened regulatory framework (SOU 2022:65). The government has so far not proceeded with the proposals presented in the report. Several of the proposals do not improve the construction of the support and involve, for example, a risk that it becomes easier for companies to issue dividends while the company receives a share of the taxpayers' money.
Isak From (S)
Mr. Speaker! The significance of the forest and the processing value of the forest industry for the state finances was the starting point for my interpellation to the Minister for Finance. The Minister for Finance, however, thought that the question was best answered by the Minister for Rural Affairs. The question has not been answered yet, but the Minister for Rural Affairs thought that the short-term layoff issues should be handled by the Minister for Employment. Therefore, we stand here now.
I will not say that I am surprised. But it is clear how this government handles an industry that is very important for the whole country. When over a thousand people across the country lose their jobs because operations are shut down, it naturally means a personal tragedy for the individual.
The Minister for Employment says that they can probably find jobs somewhere. It concerns towns in large part across the whole country, from Kalix to Hylte. It affects counties such as Norrbotten, Västernorrland, Värmland, Kalmar and Halland, where the forest industry is very significant and to a large extent contributes to welfare creation.
It is the basis of this, and that is why I wanted to have an answer from the Minister for Finance on what analysis she is doing of how it will affect the state budget going forward when operations disappear in the forest industry, which is the major creator of export net to Sweden. Operations that disappear tend not to come back.
This is also the basis for the fact that it is a temporary recession, which could be alleviated if, for example, the purchasing power in Germany improved. It is not certain that this needs to be forever – it needs to be until Europe with several [countries] gets back on its feet and exports get started. We probably should not count so much on the USA and their ideas right now, but for the forest industry, Europe, the Middle East and naturally Great Britain are very important export markets. Almost 90 percent of the added value from the forest is exported. Thus, climate benefits from the forest are also exported.
The Minister for Employment stated in his response that the parties have been very involved ever since 2022, when the investigation was received. We heard in the debate here earlier that the Minister for Employment was proud of the parties' work. The parties have actually submitted a proposal for a reformed short-term employment which would be much better.
The Minister for Employment says that there are too many bad proposals. The investigation came up with a number of proposals, so the Minister for Employment could perhaps account to the parties for which parts in the investigation SOU 2022:65 were bad. What is it that makes one choose not to proceed with a reformed short-term employment?
Arbetsmarknadsministern Johan Britz (L)
Mr. Speaker! Let me first just say that I truly agree with Isak From's description of the importance of the Swedish forest industry. The Swedish forest industry is one of our basic industries, and our ability to utilize, grow, and refine the raw materials that we have in our country is a reason why we have such a fine prosperity and such a fine welfare.
I also really want to emphasize that I agree with the interpellator's description of what happens to a person who becomes unemployed. A job is not significant only for personal finances. For most people, the value in a job means being able to contribute to society and having access to social interaction and community.
Unemployment in Sweden is high and has been for many years. Some of the unemployment is judged to be cyclical, but the high unemployment has primarily structural causes.
A long-term sustainable and competitive forestry is important for jobs and sustainable growth throughout the country. The economic cycle within the forest industry does not in a formal sense have any impact on the expenditures for labor market policy programs and measures. All industries, including the forest industry, are of course taken into account in the government's forecasts. The budget for labor market policy is set based on the forecast we have made as a whole.
I can also state that the recovery in the Swedish economy has begun. Unfortunately, we do not see the same positive development in Germany, which is a very important country for Sweden. But in Sweden, GDP growth has developed somewhat stronger than expected, and the recovery has begun. Moving forward, it is primarily domestic demand that is assessed to drive this growth, but unfortunately not the purchasing power in Germany.
But we have rising incomes, and we have a pent-up consumption need. It is expected to contribute to the fact that we now gradually get the wheels moving in Sweden and that they can spin a bit faster. Even the business sector's investments are judged to grow at a faster pace now than during the recent years. We also foresee that unemployment will gradually decrease in step with the rising demand for labor.
Isak From (S)
Mr. Speaker! It is nevertheless the forestry industry's collective added value that is the basis for Sweden's export net being at a large plus. In order for the forestry industry to be able to continue to finance Swedish welfare, we need to have a functioning, competitive industry.
During the years that Johan Britz's government base has been in power, we see that there have been dramatic deteriorations regarding the willingness to invest in the forest industry, the forest industry that is significant for the entire country, from Kalix to Hylte. Västernorrland and Värmland are the counties that have the greatest need and greatest return, and where the most jobs are created and the greatest basis for financing the welfare exists. They are also the counties that are now affected by the decline.
The paper unemployment insurance fund has increased by approximately 10 percent. It is very little, but the added value for each paper worker is enormous in relation to other industries.
The question remains: Which parts of the parties' investigation, which was presented to the government, are it that the government and Johan Britz do not think are good? It is said that there is disagreement within the government base and that they therefore have not moved forward. But who is it then who is in disagreement? It is still the Liberals and the Minister for Employment who hold this position and now have the opportunity to reform this.
A warning has come today in a completely different sector that is significant for Sweden. We will surely have reason to return to it – it concerns Ericsson – but now we are talking about the forest industry.
Which parts are it that the parties – Teknikarbetsgivarna, Unionen, IF Metall – have highlighted and wanted to have, so that one gets equal playing fields in the competition with other countries? It is well reasonable that Sweden as an industrial country has similar conditions as our closest EU countries, such as Germany, Finland and France?
Johan Britz says he is proud of the parties' work, and a product has now been placed on the government's table. The government, via Johan Britz, says: No, in these proposals, there are several parts that are bad. But the government actually has the opportunity to deliberate on this and remove any part that is not good.
Which parts is it that it is argued that one cannot present? Which part of the industry is it thought should not have the same competitive conditions as other European industry? Answer that, Johan Britz!
Arbetsmarknadsministern Johan Britz (L)
Mr. Speaker! The short answer is that Sweden has a system for short-term work, which we used during the pandemic. It is sometimes called the open and permanent system. It entered into force on 7 April 2020 as a complement to the already existing regulatory framework.
The regulatory framework was introduced in 2013, if I am correct, and concerns support for short-term work. It was developed against the background of the financial crisis and entered into force in January 2014. In short, it means that the government activates the support if there is an extremely deep recession or if it is likely that such is imminent. The support is then paid to all employers who introduce short-term work and fulfill the conditions for support. No individual assessment of the employer's financial situation is made. To date, the government has never activated that system.
According to the system that entered into force in 2020, support can be provided for a limited period to employers who, due to temporary and serious economic difficulties, need to introduce short-time work. The support is provided following a decision on approval for support. Such an approval can be granted if the employer has encountered temporary and serious economic difficulties caused by some circumstance beyond the employer's control and which could not have been foreseen or avoided. Furthermore, the employer shall have utilized other available measures to reduce labor costs. That support period is limited to six consecutive months with the possibility of an extension for an additional three months.
Do we need to change the existing system for short-term work, or is a new system needed? I am not as convinced as the interpellor, but I do not rule it out.
But as we have said, we have a functioning support today, and companies can apply for it from Skatteverket. During the recent period, not many have done so. That may be because we have a completely different situation now than the one that many companies faced during the pandemic. We have a functioning system. It has even improved during the pandemic because there were deficiencies in it.
Isak From (S)
Mr. Speaker! The parliamentary term is almost over. If the government has not prioritized this issue previously, it will not do so in the future either.
There are two support systems today – one that the government can activate and control and the other that one applies for at Skattemyndigheten – and a proposal to replace this with a new system. The parties argue that the system is better adapted for deep recessions like the one we have been in. This should have been in place during 2023. The government received the investigation at the end of 2022 and could have prioritized the issue but chose not to do so.
All of 2024 and 2025 have passed, with a large number of bankruptcies and unemployed people. It is perhaps not a completely impressive track record for this government, but Johan Britz is fully aware of that.
The question is now whether the decline in the largest export industry will also affect the Swedish economy. What results will there be moving forward, and how will it affect the possibility of financing important welfare reforms? This is something we Social Democrats are very interested in.
I can continue to ask my questions to the Minister for Finance: What assessment is being made? How does this affect the state finances? Johan Britz shall also have the final word.
It is at least, as I calculate, about 15 parts in the proposal that the parties have submitted. There should be some parts that the government could prepare and want to proceed with. Are there such parts? Has Johan Britz even looked at this?
Arbetsmarknadsministern Johan Britz (L)
Mr. Speaker! Thank you, Isak From, for this important discussion!
As I mentioned, we have a system for short-term work. Does it need to be changed, or do we need a new one? We are not quite as convinced as the interpellor about this, but we do not rule it out. We do not rule out that we may need to change and improve the systems that we have.
The first system – the system that the government can activate in the event of a very deep recession or at risk of a very deep one – was started to be developed during the financial crisis. It was 2008. It then took six years to develop it.
These are complicated systems. We do not want a situation where companies can easily use taxpayers' money to maintain operations that are not viable. That is the conflict of objectives here, and there I believe we are in agreement.
We agree that we are to have a system where we protect workers, but we do not actually protect companies. We ensure that people have protection if they lose their jobs. They have the opportunity for retraining and education. But for individual operations, we shall fundamentally not use the taxpayers' money to keep them afloat.
I am as passionate as Isak From about the role of the forest industry for this country. It is very important. We will follow this issue closely.
I thank you very much for this discussion.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.