Response to interpellation 2025/26:345 on the Fiscal Policy Council's annual report on the government's labor market policy
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 government's labor market policy and criticism from the Fiscal Policy Council. L argues that the government prioritizes strengthening households' purchasing power, improving the matching between skills and needs, and strengthening support for the long-term unemployed through education and benefit reforms 1 2 3. L emphasizes that their policy makes it cheaper to hire young people and counters passivity through activity requirements 2 3. S argues that the policy has failed to reduce unemployment and criticizes the government for ignoring the expert agency's criticism that the problem is not about incentives 4 5 6. S believes that the government is making people poorer without effect 5 6.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Arbetsmarknadsminister och vikarierande klimat- och miljöministern Johan Britz (L)
Madam Speaker! Sofia Amloh has asked me if I intend to take any initiatives in light of what appears in the Fiscal Policy Council's annual report regarding the issues concerning labor market policy.
I would like to begin by thanking the interpellor for the question, which concerns the Fiscal Policy Council's significant review of the government's fiscal policy.
The Fiscal Policy Council notes that the economy needs to be strengthened and that the alignment between the skills of the unemployed and the needs of employers needs to be improved. Many unemployed people are far from the labor market. Labor market policy needs to become more effective with cost-effective measures adapted to the different circumstances and needs of the unemployed.
The government has taken a number of measures to reduce unemployment and prioritizes reforms within three areas in particular. It is about supporting the economy's recovery by continuing to strengthen households' purchasing power, strengthening the skills of the unemployed and reinforcing support for those who are far from the labor market, as well as re-establishing the work principle so that more people enter employment. The government has also tasked Arbetsförmedlingen with using its own staff to reinforce support for the long-term unemployed and to improve the matching and monitoring of the unemployed.
The most important individual contribution to establishing oneself on the labor market in the long term is education. The government has therefore made major investments in, among other things, regional vocational adult education and the University of Applied Sciences.
Sofia Amloh (S)
Madam Speaker! In the report Swedish Fiscal Policy 2026, which was presented in February this year, the Fiscal Policy Council does not provide a bright picture of the labor market. The focus lies on the matching issue rather than on the incentive problems. The Council believes that the high unemployment is primarily due to difficulties in matching the job seekers' skills with the employers' needs.
The government describes here that this is part of the problems. So, here at the end of the mandate period, we can probably say that the policy has not had any effect when it comes to matching people out of the labor market. It is rather the opposite, now that we stand here and are to summarize the government's mandate period.
The Fiscal Policy Council also directs strong criticism towards the government's labor market policy and suggests that the forecasts may be optimistic. We have also seen this, given that the government has had to write forward and change its forecasts throughout almost the entire mandate period. There are critics who would say that this is rather wishful thinking from the political side than forecasts. It has serious consequences that the government cannot make forecasts in this area.
There are more than the Fiscal Policy Council that are critical. A few weeks ago, a survey from Unionen showed that a majority of Sweden's decision-makers, that is, people with some type of managerial position, condemn the government's labor market policy.
Would it not be appropriate for the government to take to heart the expert authority's criticism of what needs to be done, instead of doing the opposite?
We see that more people are unemployed. The economy is extremely shaky. The Fiscal Policy Council has directed stinging criticism at the government's overall fiscal policy. It does not benefit the labor market or growth. It does not result in more people entering employment. We have had over 100,000 more unemployed with this government. One should be self-critical. One should consider: Are we really doing the right things? Are we doing enough?
The government should invest even more in labor market policy measures and in getting people into labor market policy training so that they can be equipped for the labor market with what the employers demand.
I return to my question, Madam Speaker, as to why the government does not take to heart the criticism that comes from the Fiscal Policy Council. The Minister says that it is a valuable report that comes from the experts, but why is it not listened to the proposals that come from the Fiscal Policy Council? Why does one choose to do, for the most part, the opposite?
Arbetsmarknadsminister och vikarierande klimat- och miljöministern Johan Britz (L)
Madam Speaker! Thank you, again, for this important discussion! We agree in this chamber – I hope at least – that unemployment and exclusion in Sweden are too great and that we need to combat them in the best possible way.
In Sweden, unemployment is both cyclical and structural. Cyclical unemployment is combated through the government's measures to support economic recovery and by strengthening household finances, including among other things an increase in the job tax credit and a temporary reduction of the food VAT from 12 percent to 6 percent.
Just over a year ago, the government saw in its forecasts how the curves were about to turn. Then Donald Trump took office in the White House and caused a tariff chaos in the world that affected both consumers' willingness to consume and companies' willingness to invest.
Now we have seen a similar glimmer of light, but as we all notice as soon as we turn on the news, we live in a very uncertain time with a very dramatic world around us that affects our economy. This leads to a recession. To strengthen households' purchasing power in a recession, we need to ensure that private consumption can increase. This cushions the fall in aggregate demand. Recessions risk creating effects on the labor market where temporary high unemployment leads to lasting lower employment. We need to do something about this, and we are doing so.
That is why the government invests more than, for example, the Social Democrats in breaking the recession. That is why we ensure that it becomes cheaper to employ young people with the government's policy compared to the Social Democrats' policy. And that is why we invest in more educational places that lead to jobs.
We are also carrying out a comprehensive benefit reform, which is expected to reduce structural unemployment in the long run. The benefit reform includes, among other things, an activity requirement for recipients of social assistance, a benefit ceiling, and a job premium. The job premium is for those who move from benefits to work. The activity requirement means that the municipalities will be obliged to offer activities that correspond to the individual's work capacity and an obligation for the individual to participate. The purpose is to counteract passivity, long-term benefit dependency, and exclusion.
The opposition's and the Social Democrats' answer to the question seems to be that there should be higher grants, higher activity support, and higher allowances. It is not the right path for Sweden if we are to break the all-too-high unemployment.
Sofia Amloh (S)
Madam Speaker! We are in complete agreement that unemployment is bad. What is most remarkable here is that the government is doing so little to reduce unemployment, both the structural and that which is affected by the economic cycle. They have failed with both – in both length and breadth. It is quite astonishing that there is not more insight from the government's side.
It is obviously chaotic in the world around us, and it would have been so regardless of who is in power. The question is what measures should be taken in politics to secure the situation.
The Minister for Finance has said that one "Trump-secures" the Swedish economy. I wonder what that looks like and how it works, given that one refers to the circumstances in the world. How is the Swedish economy Trump-secured, and how can that contribute to benefiting the Swedish labor market and growth, regardless of what happens in the world?
Let us go back to what needs to be done. More people need to get into work. The logic that if people are made even poorer, it will get them into work, does not really work. It has not been so previously, and it will not be so now either. This is also shown by the Fiscal Policy Council. The Council is extremely clear in both last year's report and this year's report, namely that it is not about the incentives to take jobs. Despite that, the government chooses to continue taking measures that make people even poorer, and in that way, incentives are to be created.
There will not be more jobs. People will not be better equipped to take more jobs. People will continue to apply for 50, 60, 70 or 100 jobs without getting anything. It is very inefficient to indulge in wishful thinking, which is what the government is doing. Nothing will happen.
An active labor market policy is required that provides many tools and many different types of interventions that equip people to take a job.
Why does the government choose not to do so? Now the Fiscal Policy Council – an expert council – clearly says that it is not about incentives. But the government chooses to continue with that type of policy. Why does the government choose to do the opposite, if you think it is valuable to get tips from the Fiscal Policy Council? That is how you see it, right?
Arbetsmarknadsminister och vikarierande klimat- och miljöministern Johan Britz (L)
Madam Speaker! It is strange to listen to the member, who requests more measures, when the only thing you propose is increased grants compared to the government and that it should become more expensive to employ young people. In total, in your budget alternative, you invest less than the government in breaking the recession we are in.
Let me mention something else that the government is also doing. In order to improve the matching in the labor market, it is important to increase professional and geographical mobility as well as the control and follow-up of the job seekers. There are many unemployed, but there are also many jobs. Unemployment looks completely different in different parts of our country. It is low in the north and high in the south.
That is why Arbetsförmedlingen has received an additional 100 million kronor for this this year and is expected to receive an additional 200 million kronor in 2027 and 300 million kronor from and including 2028.
We have also tasked Arbetsförmedlingen to prioritize in its activities unemployed persons who are far from the labor market. In line with that, the agency shall also work to increase activity among registered job seekers with supplementary economic assistance in accordance with the benefit reform.
The number of people within what is called Arbetsförmedlingen's integrated matching support is increasing, and it now includes approximately 9,000 participants. It is a response to the problems that arose with the chaotic privatization of Arbetsförmedlingen which, among others, the Socialdemokraterna carried out.
The development of the total during the autumn of last year until now also shows that there are signs that more and more unemployed people are participating in labor market training. There are resources allocated so that the subsidized employments shall increase.
Sofia Amloh (S)
Madam Speaker! I still hear a satisfied Minister for Employment who is standing here once again. Let me make it clear that the chaos privatization that the Minister is so pleased to mention in the Chamber was a policy that his own party pushed forward and voted through. He must take that criticism himself and not just place it on the opposition.
There are more unemployed people. We do not notice a large change in the unemployment that is linked to the economic cycle – nor the structural unemployment either. The Minister for Employment needs to be a bit self-critical as to whether this is a policy that has an actual effect on unemployment. If it does not, which we can see here after nearly four years with liberals at the Ministry of Employment, one should consider whether the policy is achieving those effects. Should we do something else? Should we perhaps do more or less of something else? Despite a number of critical actors who have great relevance on the labor market, one continues to pursue this policy.
Now we stand here with the final result. One continues to make people poorer and poorer, and then one waits for unemployment to potentially fall. It is incomprehensible. The Minister for Employment must reflect more.
There is much more to do that we know will yield more effects. We intend to continue to stand up for that. It is a pity that the Minister for Employment is just watching.
Arbetsmarknadsminister och vikarierande klimat- och miljöministern Johan Britz (L)
Madam Speaker! Let me once again thank Sofia Amloh for that we are allowed to stand here and discuss the very important issue of unemployment.
Unemployment is too high, and we need to do more to address it. But that nothing is happening, as Sofia Amloh claims, is not entirely true.
It is completely true that the Liberals were involved in pushing through, or contributed to, the reorganization of AF's activities that took place during the previous mandate period. It was not a prioritized measure for the Liberals. With the benefit of hindsight, we should have pulled the brakes much earlier.
I return to the fact that the Social Democrats are investing less than the government in breaking the recession and are making it more expensive to employ young people. But one thing we agree on is that we shall have education adapted to the needs of the labor market. We have talked about this before here, and we, this government, will continue to invest in it.
We are soon heading towards an election. I believe that the coming months will be largely about what we have talked about here today, namely what the work principle is. The work principle is about opening doors instead of locking people into exclusion, that it should pay to move from benefits to work and self-sufficiency, and that it should be profitable to work more. The benefits principle versus the work principle, we will discuss more during the coming months, and I look forward to that.
Thank you very much for this debate!
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.