Response to interpellation 2025/26:383 on the government's economic priorities
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 government's economic priorities. M argues that the policy has strengthened households' purchasing power through tax cuts on work, pensions, and halved food VAT 1 2. M emphasizes that the economic standard increases most for those with the lowest income 1, that important investments are being made in defense and infrastructure 1 3 4, and that they are working for the work principle and a benefit reform 3. M believes that taxes need to be lowered to strengthen purchasing power 2 and that they are ready to build protective barriers for the economy 4. S argues that economic inequalities and poverty have increased 5 and that tax cuts have benefited high-income earners 5. S advocates for increased child allowance, abolished care deductions, and investments in jobs, education, and welfare 5 6. S argues that measures are needed that equip job seekers rather than further job tax credits 7. S believes that their budget prioritizes the finances of ordinary people 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.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! In light of the fact that many households are struggling to make ends meet, Ida Ekeroth Clausson has asked me what analysis I have made regarding implementing tax cuts in this economic situation and what the analysis showed. She has also asked how I justify tax cuts for high-income earners at the same time as more and more people in Sweden are living in poverty.
Fighting inflation and getting the economic recovery started has been important so that everyone in Sweden can have it better, not least the most economically vulnerable. The budget bill for 2026 was designed to contribute to breaking the recession by strengthening households' purchasing power. Lowered tax on work and pension, halved food VAT, lowered employer contributions for young people, and lowered preschool fees contribute to Sweden being expected to become one of the countries in the EU that gets the highest growth in 2026, according to the EU Commission's forecast. At the same time, we have made historical investments in upgrading the defense and supporting Ukraine, investments that the Social Democrats have stood behind.
The government's policy, viewed over the entire mandate period, has benefited most those who earn the least. The effects on households' economic standard as a result of the government's proposals and notifications during the mandate period show that the economic standard increases most, in percentage terms, in the tenth of the population that has the lowest economic standard and least in the two highest income groups. This can be seen in the distributional policy report that is made in every spring bill.
The aggregate income inequalities, measured by the so-called Gini coefficient, have also fallen after reaching a historically high level in 2021 under the Social Democratic-led government.
The proportion in Sweden living with material deprivation is low in comparison with other European countries. According to other established measures, for example SCB's measure for low standard of living and the proportion who have an economic standard below 60 percent of the median, the economic vulnerability has decreased since 2021.
When the government took office in 2022, Sweden was ranked 22nd in the EU's growth rankings. This year, we are expected to be in 6th place, according to the EU Commission's forecast from November 2025. The growth is expected to be driven by domestic demand, largely thanks to an expansive fiscal policy.
Ida Ekeroth Clausson (S)
Madam Speaker! I thank the Minister for the answer. Much sounds positive, but is that really how it looks in Sweden today?
During the current government's nearly four years in power, the economic gaps in Sweden have increased. Many households have found it increasingly difficult to manage their everyday finances, not least as a result of rising housing costs, high electricity bills and increased food prices, but also by the government making it more expensive to collect medicine, worsening the housing allowance for families with children, lowering the social security allowance, and refusing to pay out electricity support. Poverty has grown, and more and more people have debts with the Enforcement Authority.
During the same period, the government has implemented tax cuts that have benefited people with high incomes and large assets. The government's priorities have been very clear and very revealing. It is ordinary people who have to take the hit, while at the same time the government supports high-income earners with large tax cuts. This policy that the government is pursuing is not only unfair and immoral but has also proven to be harmful to the Swedish economy.
Sweden has the highest levels of unemployment in Europe. Growth in recent years has been historically weak. The Swedish economy has developed worse than in many comparable countries, far below the potential that exists. The number of bankruptcies is hitting records. Growth is being written down significantly, and unemployment has been written up to one of the highest levels in Europe. At the same time, the deficits are exploding, and that from already record-high levels. This can be read in new forecasts from Konjunkturinstitutet and Statskontoret.
Finance Minister Elisabeth Svantesson says that Sweden is Trump-proof. That is a naive view from a finance minister. The fact is that growth in Sweden has deteriorated with the SD government's policy. Half a million people are unemployed, and we have the largest deficits in a generation. With a better economic policy, Sweden could have been better prepared to meet the effects of the war in the Middle East.
Madam Speaker! We Social Democrats have chosen a different path. In our Social Democratic budget proposal, we proposed better economic conditions for families with children, for example through increased child allowance and abolished care deductions. We proposed investments in jobs and education, strengthened resources for the welfare system, and investments in infrastructure and climate transition. Nine out of ten Swedes would be better off with Social Democratic policy than with the SD government's policy. It is actually a completely different direction. If anything, it is a policy for jobs, growth, and economic security.
In the welfare country Sweden, we have had a social contract based on mutual trust between the state and the individual. The state guarantees welfare, protection, and justice, while the individual contributes through work, taxes, and social engagement. This trust creates community and loyalty.
At the same time, research shows that vulnerability increases and trust is undermined when groups are excluded from the safety net and the state withdraws from the responsibility for the most vulnerable. The welfare society risks being replaced by a charity society. Is that something the Minister for Finance desires?
Finansministern Elisabeth Svantesson (M)
Madam Speaker! Thank you, Ida Ekeroth Clausson, for the question and for this discussion! It is important. We have gone through some years of really tough economic challenges with high inflation. Many people have had it enormously tight and difficult and have lost purchasing power. Even though we see that it is now starting to turn, there are still many who are having a hard time.
Madam Speaker! Being able to prioritize is one of the most important qualities of a politician. It becomes extra important in a difficult economic situation. When I became Finance Minister, Sweden had an inflation of 10 percent. It hit many Swedes' wallets extremely hard, especially for those who already had small margins. At the same time, we were in 22nd place in the EU's growth list and had high unemployment as a result of years of high migration and failed integration. At the same time, I was also met in my new role as Finance Minister by enormous investment needs.
All this requires, if the situation is to be reversed, priorities.
I worked from day one, Madam Speaker, according to a very clear plan. It concerned three parts, which I know many here in the chamber have heard about before. The first and most important part was to bring down the very high inflation, which we know is a poison for both the Swedes' and Sweden's economy.
At the same time, we supported households with electricity support, and we have also, for three years in a row, Speaker, lowered the tax on work and pension to ease the burden in the midst of a difficult time. People have simply been able to keep more of their wages. To this, I can also add that we can be glad that we implemented the halving of the diesel price – even though it is rising right now due to the unrest in the Middle East. Otherwise, it would have been even tougher today.
Now much is turning, Madam Speaker. We see a recovery in the economy, and we see that purchasing power is returning. But it is fragile. Even though we stand on a stable foundation in Sweden and can build protective barriers around the Swedish economy and the Swedes' economy, it is fragile, depending on what happens in the rest of the world.
The second part of the plan that I have worked a lot on concerns the work line, that is to say that more and more people should get into jobs, to break the recession as quickly as possible with an expansive budget and then, of course, to ensure that all men and women, especially women who have stood outside the labor market for a long time, shall get access to activities, a push and our support to return to or enter the labor market, perhaps for the first time.
The work line is naturally also about making it more profitable to work. That is why we have lowered the tax for three years in a row, and that is why we are now moving forward with a benefit reform that makes it more worthwhile to work.
The third part of the plan is about growth. We know that it is only a growing economy that can meet all of the future's needs. Now we have presented a budget – and it took effect on January 1 – to speed up the economy in the short term and to build resilience and growth in the longer term. There is a basis for this in the budget, with 6 percent of GDP in public investments. They will not only give us increased security and better railways and roads, but they will also create new jobs and jobs for many small business owners and entrepreneurs all over Sweden.
This is the plan I have worked on, and will continue to work on, to strengthen households' resilience and build protective barriers. I therefore want to continue to do exactly this: ensure that, in the midst of all this anxiety, Swedes can feel confidence and faith in their own economy and know that Sweden stands firm in times of wind – politically stable and economically stable with world-class public finances.
Ida Ekeroth Clausson (S)
Madam Speaker! The Minister for Finance seems satisfied with the developments in Sweden. At the same time, however, a report was released the week before last from Hyresgästföreningen, Majblommans Riksförbund, Rädda Barnen, and Röda Korset which shows that economic inequality between families with children is increasing. The gap in economic anxiety between parents with low incomes and parents in a randomly selected control group has increased sharply since 2023. This is the fourth year the survey has been conducted, and no improvement is visible there.
Five out of ten single parents and three out of ten cohabiting parents have, during the last half year, had difficulty purchasing nutritious food and seasonal clothes for their children. The organizations behind the survey state that it illustrates two parallel realities where the differences in living conditions increase depending on what income the parents have.
The Minister for Finance speaks a lot about the work line, and I also believe that those who can should work. Full employment has a decisive importance for the entire population's quality of life and for reducing the social and economic gaps that exist in society. The Social Democrats' basic view is that people want to work, and our policy strives to promote a good working life and that everyone who can work should also work. By having more people working, tax revenues increase while public expenditures decrease. Our highest priority is therefore to get more people into work.
But in line with the rising unemployment, the situation risks worsening further. Behind the figure of 9 percent unemployment are half a million human fates. It is about people who cannot afford to pay bills, parents who cannot afford to let their children participate in sports, and ordinary people who cannot afford to pick up their medicines. The government does not seem to understand how hard unemployment hits, especially not against those people who want a job to go to, who want to do right by themselves, and who want to feel the security of having their own income.
The Fiscal Policy Council assesses that it is not greater economic incentives that are the solution to reducing unemployment. Neither further job tax credits nor subsidy ceilings will have large effects on employment. Rather, according to the agency, there is a risk of increased child poverty. What is needed instead are measures that equip the job seeker to take the jobs that exist.
The economic policy to achieve full employment goes hand in hand with the tax policy that finances our common welfare and important social investments. We heard the Minister for Finance talk a lot about the work principle. Therefore, I wonder why the government does not make more investments to get more people into work.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! The budget that came into effect on January 1 faces, in many ways, the challenges that many are confronting. We are in difficult times, and we risk that it remains so, especially now when the war in the Middle East is ongoing.
What have we done in a few short years? We have lowered the tax for everyone who works. We have lowered the tax on pensions. We have lowered the tax on savings, and we have lowered the tax on fuels and on electricity. On Wednesday, food will become cheaper by halving the food VAT. It is precisely what the member is requesting, that is to say, to make things easier for people. Food costs and housing are often the very largest item for a family's or for a single person's finances.
Regarding the housing allowances, we have raised the ceilings for the first time since 1997. Depending on the fact that the rents have become higher, we have also raised the ceilings. This has not been done previously. The list could be made longer.
Am I proud of the situation? No, but I am glad that we from four parties together have strengthened people's finances in a tough time.
I still have some questions. How many times has a Social Democratic government lowered taxes for a worker for three years in a row? How many times have the Social Democrats lowered taxes on pensions for three years in a row? And how many times have the Social Democrats ensured that fuel became significantly cheaper? How many times in history have the Social Democrats allocated approximately 6 percent of GDP to public investments in infrastructure, the rule of law, and defense? How many times have the Social Democrats doubled the funding for defense in less than four years? How many times have the Social Democrats lowered – halved – the food VAT and let it apply for one year and nine months?
I can continue this list, but I am glad that we are four parties doing this in a difficult time.
What do I mean by the concept Trump-safe? It is simple. The Swedish economy stands strong, but many still have it tough. It is starting to turn, but the economy itself and the public finances are stable and world-class. With a national debt of just over 35 percent – it is actually lower today than when Magdalena Andersson left her job as Finance Minister – we can do what is required to protect the population physically by building safety and security as well as by strengthening their economy.
Yes, the Swedish economy is Trump-proof in the sense that we have opportunities that few other countries have. On the other hand, the Swedish economy is not Magdalena-proof. The Social Democrats' motions are about increased taxes on many things but without wanting to talk about it. One rarely wants to when one is a Social Democrat. One says that one wants to lower taxes, but as soon as one governs, one raises the taxes.
Let us look at Stockholm – the shop window. In times that have been difficult for people, the municipal tax has been raised twice and in the region once. This obviously hits those who have the least the hardest.
Madam Speaker! We are going through a tough time. The recovery has arrived in Sweden. It is fragile. This is due, among other things, to domestic demand picking up with the help of an expansive budget. It is also about what is happening in the rest of the world. But this government, we four coalition parties, are ready to do more if and when it is required to build protective barriers around the Swedish economy and around the Swedes' economies.
Ida Ekeroth Clausson (S)
Madam Speaker! The Riksdag has the opportunity to investigate matters, and the Riksdag's investigation service has calculated that nine out of ten would benefit from the Social Democrats' budget proposal.
In the Social Democrats' budget alternative, we prioritize the finances of ordinary people. We proposed a fair tax cut for ordinary people, which would provide as much as the government's proposal – which has now become a reality.
We do not, however, think that a further tax cut for those who earn over 67,000 kronor a month is justified at the same time as half of all single-person households are struggling to put food on the table for their children. We do not support the removal of the tapering of the job tax credit. That money could have gone to much more important things, such as increasing child and student grants.
The last time the child allowance was increased was in 2018, and as it happened, it was a Social Democratic government that did it. Since then, costs have skyrocketed for families with children. But Sweden is the only country in the Nordic region that has not increased the child allowance during the cost crisis.
We want to increase the housing allowance for the most vulnerable families. The government recently worsened it, which is completely incomprehensible in this very serious cost situation.
We want to make medicines cheaper. In our budget alternative, we prioritize that Swedish pensioners should be able to afford to pick up their medicines.
We Social Democrats further propose that the unfair care deduction shall be abolished. Those who must do the work at work should no longer be punished unreasonably severely financially and lose thousands because they are forced to stay home when they are sick.
There are actually alternatives in economic policy that make a difference for ordinary people.
Finansministern Elisabeth Svantesson (M)
Madam Speaker! I thank you for the applause even before I have started speaking.
To be honest – I want to thank you for a good debate. This is a very important issue. Many people all around the country are still struggling with high prices and high rents and to make their finances work. What is pleasing is that things are starting to turn regarding both purchasing power and the economy, and that we have such strength in our public finances.
It is always fun to listen to Social Democrats when they are in opposition. In that case, one can propose a lot, but when one actually has a majority and is going to present a budget, one must still always evaluate what is happening. It will be exciting to see how one will get the four parties on Magdalena Andersson's side to work together and how one will facilitate things for people and focus on the work line.
What are the big differences here? Am I against increased child allowance? No, I am not against increased child allowance. I do not rule out that it needs to be raised. But I also think that taxes need to be lowered for those who work. Since those who work have been hit hardest during the inflation crisis, it is completely reasonable to strengthen their purchasing power, so that they do not feel that it is only the allowances that are raised and indexed up. It is not fair. Even those who go to work every day and toil should know that they get to keep more of their salary during very difficult times.
I will not stand here and make more lists of everything we do to support households, Madam Speaker. I can only state that the food VAT is halved now on Wednesday. Furthermore, the employer contributions for hiring young people are being lowered. This will make things easier for many, especially for many small business owners in the service sector in Sweden who have small margins and who are now worried that demand is being held back.
Much can be done to facilitate both the small businesses, the families, and the Swedish economy. I intend to continue doing that.
Thank you for this debate! Have a continued pleasant week!
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.