Response to interpellation 2025/26:444 on companies that exploit the reduction in employer contributions
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
1 M argues that the reduction of employer contributions for young people aims to support young people's opportunities in the labor market and facilitate hiring for companies 1. M considers it offensive when companies take the tax cut as profit instead of hiring more people or raising wages 1. M wants to get more money into the economy by lowering the tax on labor and halving the food VAT 2. M emphasizes that Sweden has a stable economy and that taxes have been lowered for everyone 3. M prefers to lower taxes rather than raise them 4. 5 S argues that the tax cut is a direct subsidy of corporate profits 5. S considers the system to be incorrectly designed as general reductions often subsidize jobs that would have happened anyway 6. S argues that the government should have used the resources for education, matching, and a strong labor market policy instead of inefficient reductions 6. S proposes a youth package with a job or education after 90 days as well as more labor market trainings 6. S argues that the government prioritizes lowering taxes for those who earn more instead of investing in labor market policy 7. S refers to evaluations showing that the reform has caused significant loss of tax revenue per job created and that the support should instead be directed toward those who are furthest from the labor market 7. 7 S argues that the reduction of the employer contribution is not the most effective measure to get young people into work and that the resources should instead be spent on job contracts with education or internships 7. S criticizes the government for prioritizing tax cuts over investments in people and argues that the reduction of the fees does not provide significant long-term effects on employment 7 8. S considers that tax cuts benefit high-income earners while families with children find it harder 8. S also argues that the reduction in practice subsidizes corporate profits 9.
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)
Mr. Speaker! Jonathan Svensson has asked me how I view the effects that arise when tax money that should have financed more jobs for young people instead finances increased corporate profits, and if I intend to take any measures to ensure that the reduction of employer contributions achieves the intended effect.
The purpose of the temporary reduction of employer contributions for young people is to support young people's opportunities in the labor market and at the same time facilitate for companies that employ young people to retain and hire new staff. It is therefore an eyesore when companies choose to take the tax cut as profit instead of hiring more people or raising wages.
The temporary reduction took effect on April 1. What we have seen so far is that individual companies are abusing the reform. Previous reductions of employer contributions for young people have been evaluated several times. These evaluations show that employment among young people increases as a result of the reduction. The Government is now closely monitoring the companies' actions. If we were to see that more companies abuse the reform, we will take that into account in the design of the economic policy moving forward.
Jonathan Svensson (S)
Mr. Speaker! Thank you to the Minister for taking the time to come to the chamber and discuss this issue today!
As I mentioned in my interpellation, the government proposed earlier this year to the Riksdag that the employer contribution for young people should be reduced relatively significantly, and as the Minister mentioned, this became a reality on April 1. It is a temporary measure intended to extend until September next year. For the sake of the minutes, it is worth mentioning that this was a reduction that we Social Democrats rejected in our budget proposal.
According to the government's own calculations, the tax cut costs approximately 6 billion kronor of the state's budget for the current year – and that is when the cut only covers nine of this year's twelve months. It is therefore a relatively large sum that we are spending on precisely this tax cut for precisely this purpose.
That is why one becomes so horrified when one takes part in the review that Aftonbladet in its program 200 sekunder has conducted of a large company in Sweden. This company turns over billions, has grown very strongly in just a few years, and operates in an industry where very many young people work.
Then one could imagine that the reduction of the employer contribution was used in a correct way and led to more jobs for young people, in the midst of this recession where youth unemployment is sky-high. Unfortunately, as I write in the interpellation, that does not seem to be the case.
Aftonbladet has obtained internal information from the company in question, which shows that all managers in the organization have been informed of what the reduction in the employer's contribution entails. I intended to read out some of what emerged in the review. This is how it is written internally:
Our work now and moving forward this fiscal year is to reduce the budget by the same amount as the discount has entailed. The most important thing for you to keep in mind is not to use more salary crowns just because we have received a discount on the employer contribution, since we are reducing the budget by the same amount.
Mr. Speaker! This was not exactly the intention behind the reduction of the employer contribution. This so-called initiative was supposed to lead to more jobs for young people in Sweden, in the midst of a burning recession. However, it does not seem to have been the case in this instance, but rather a pure subsidy of this company's profit – a profit that is already relatively large.
At the end of the Minister's response, she said that it is "individual companies" that have acted in the same way as the company we are talking about today. When the Minister says "individual," the interpretation still becomes that it is more than one company. If I am misinterpreting, the Minister is welcome to correct me.
Regardless of this, we can observe that relatively large sums of money have been taken from the state treasury and become a direct subsidy of these companies' profits. That one does not want to review the design of this tax cut, I think, is unfortunate.
The Minister has thus answered one of my questions in the interpellation, namely whether she intends to take any measures to ensure that the reduction has the intended effect. The answer to that question appears to be no – unless more companies abuse the reform, in which case it could be considered in the design of future economic policy.
I also asked the Minister how she views individual companies using the tax cut in this way. She says that it sticks in the eyes, and that is a picture I share.
I would still like to ask the Minister: Would it not have been relevant to prioritize these economic resources in another way, or possibly have designed the tax cut in a different way than what has been done?
Ida Ekeroth Clausson (S)
Mr. Speaker! I would like to apologize for being a little late to the debate. I had a visit from a high school class until one o'clock, and I then had the opportunity to speak with them about precisely the reduction of the employer contribution for young people and what reality they face now when they graduate.
The temporary reduction of the employer contribution has cost the state 6 billion kronor. Research has previously shown that general reductions largely subsidize employments that would have occurred anyway. Now it turns out that a large company has been able to use the reduction to create profit. It is a clear sign that the system is incorrectly designed. It is a waste of Sweden's resources and a betrayal of all those who are without jobs and would benefit from effective reforms against unemployment.
The problem in Sweden today is not primarily that it is expensive to employ young people. The problem is that demand is weak. Companies are holding back, investments are missing, and municipalities and regions are struggling. When the wheels turn slowly, it does not help to just make it cheaper to hire. In that case, one must also get the economy moving. That is how the government should have used all the resources that have been put on inefficient reductions of the employer contribution. To lower the tax and hope for the best, which is almost always the government's line, is not enough. Almost every fourth young person lacks a job. In that case, a discount is not enough; instead, education, matching, and a strong labor market policy are required.
We know that over 100,000 academics in Sweden are unemployed today. Young people are particularly affected. That unemployment among newly graduated academics is increasing should cause more people to raise a warning finger. At the same time, many end up in occupations for which they have not been trained, which in turn pushes out other groups who also need work. This is a vicious spiral that in the long run weakens the entire labor market.
We Social Democrats believe that education is an investment for both the individual and society. But then one must also create a labor market where education pays off.
We Social Democrats propose more labor market training and an expanded vocational adult education and comprehensive adult education. We want to introduce a youth package with a job or education after 90 days. We want a driving license lift, more trainee positions and targeted measures for those who are furthest from the labor market. There is a difference between making young people cheaper and making them stronger.
The Social Democrats' economic policy is based on three simple things: to invest when times are difficult, to strengthen households' purchasing power, and to ensure that jobs grow through both education and future investments. We do not believe in borrowing for broad tax cuts, but we believe in creating investments.
It is positive that the Minister thinks it is glaring that this reform has been used in an incorrect way, that the tax cut is being used to take out profits instead of hiring more people or raising wages. But the question remains: What does the Minister intend to do about it?
Finansministern Elisabeth Svantesson (M)
Mr. Speaker! I would like to thank Jonathan Svensson for having posed this question and initiated this debate.
Briefly first: I have great respect for the fact that one does not believe it is a good reform to lower the costs of employing young people. I understand that. But I can tell you why we are doing it right now. I believe it is for the exact same reasons as when the Social Democrats did it during the pandemic: because it is a recession. And this recession is very prolonged, as several of the debaters before me have pointed out. Last spring, it was also extended by Donald Trump's entry with tariff wars, uncertainty, and unpredictability. Many are holding back.
Which companies are affected then? It is many small businesses with small margins, such as cafes, restaurants and others that employ young people. What is it then that we do in the budget for this year and in the year-end budget? Well, we ensure that more money enters the economy, among other things so that households can consume. Ida Ekeroth Clausson was on the point that demand in Sweden is lower than normal. That is why we have a recession.
Now we will ensure that more money comes out into the economy. We do it by lowering the tax on work, we do it by halving the food VAT, and we do it, as a cyclical measure, by lowering the cost of employing young people. We know, after all, that it is often the young people who one might be cautious about employing in tougher times. Fundamentally, this will provide more jobs for young people but also ensure that more companies survive.
With this said, it will of course be that there will be companies that try to use this in an incorrect way. That is what I mean is offensive. Here, everyone has a responsibility. I also want to send a message to Svenskt Näringsliv, Svensk Handel, Visita, Almega and many other of the organizations that have pointed out that we should have lowered the cost of employing young people. Now that we are doing so, these member organizations and their members must also work together to truly use the reform in the right and best way.
Fundamentally, Mr. Speaker, the view on tax money is also an interesting perspective, that these are someone else's money. It is, after all, the entrepreneurs – those who run these cafes, bakeries, and cleaning companies – who pay taxes to the state. One pays wages to the person who works, and one pays social security contributions – just as it should be. But it is still not the state's money. It is the companies that generate this with their ideas and their work.
With that said: There are absolutely companies making large profits, which the investigation in Aftonbladet has also highlighted. I think it is very good that Aftonbladet investigates this and puts pressure. That is what we should do together. We did that regarding the food VAT. Before that reduction was introduced, we saw that the companies did not raise prices. We had a food price commission that followed that development.
In the same way, I believe it is incredibly important that we now also ensure that this truly reaches the young people, which is the whole point of the reform.
Mr. Speaker! Sometimes there are many things that must be weighed together. To begin with, we have a recession. In that case, we want to conduct economic policy. This recession is due to low domestic demand. In that case, it is important to get money into the economy and to do what we can so that young people also have a chance to enter the labor market and get to work this summer.
In conclusion, I want to point out this from a slightly different perspective. I know the member previously mentioned that she met high school students. This year is exactly 40 years since I graduated from high school. Much has happened since then. It was, in some way, the happy 80s. We believed in the future. That is not always the case today. Many face a much darker future and have grown up in crisis and war.
Then it is important for me to send the signal that we really want to make it easier for young people to get their first employment. And we expect every employer who does this to take responsibility and use the reform in the best way.
Jonathan Svensson (S)
Mr. Speaker! The Minister touched upon several different areas. I intend to address some of them.
Global uncertainty with Donald Trump in the White House absolutely means that we need to take measures here in Sweden. What we have a political conflict about in Sweden's Riksdag is which measures we should implement.
The Minister mentioned that we have a low domestic demand and that we need to get more money into the economy. That is where the line of conflict lies, in that the government wants to lower the tax for those who earn more while we have a different line.
The Minister also refers to the spring budget that we have recently handled here in the chamber and speaks of investments. If we look, for example, at the collective labor market policy within expenditure area 14, we see that that expenditure area de facto has less money – in the middle of a labor market crisis. One can, at the very least, make different political priorities.
The Minister also mentioned that previous evaluations of reduced employer contributions have shown that it has led to more jobs for young people. One truly hopes that is the case, Mr. Speaker. If such large sums have been spent on such reforms, it should reasonably have led to some kind of effect. The question is rather whether it is the right measure and the most effective measure, or if it might even be an ineffective measure.
The Minister stated in her opening response that evaluations of this have been carried out previously. She did not mention which ones. I asked the Riksdag's investigation service to look at some of the evaluations that have been carried out previously. I think I can bring up some of this.
An evaluation from IFAU has looked at the alliance government's first mandate period when they lowered the employer contributions. It is noted that the reform has shown a significant loss of tax revenue per job created, which is judged to be due to the fact that most would have had a job even without subsidies to their employers. IFAU, who nevertheless must be considered experts in the field, describe that a more effective way would have been to target these supports specifically to the people who are further away from the labor market.
Another study looked at the loss of tax revenue and the loss of revenue per job created. It was calculated that, in 2008 figures, it cost up to 1.6 million per job created. That corresponds to approximately three to four nursing assistants per job created.
Mr. Speaker! There are more studies to highlight in this context, but I particularly want to highlight a memorandum from the Ministry of Finance. There, they describe that this reform will not have any significant long-term effects on employment among young people. It is almost a bit humorous that the Ministry of Finance itself writes that they assess that it will not have any long-term effects on employment.
Mr. Speaker! I still think there is evidence that the reduced employer contribution for young people is not the most effective measure to get young people into work. That is why we have been critical of the reform and have not been in favor of this reduction. Had we been allowed to decide, we would have allocated these resources to other things, to more effective measures, such as job contracts for young people, where one gets the opportunity for education, internship, or work training. It could have been a trainee program for newly graduated students, a driving license grant, or why not a state initiative on so-called SAO jobs. Unfortunately, these are not things that the government has included in its budget proposals.
Mr. Speaker! I therefore want to ask again why the government is allocating resources to ineffective measures when it is trying to push back youth unemployment. Do you not see that your prioritization may have landed wrongly just this time? The Minister is very welcome to reflect on that.
Ida Ekeroth Clausson (S)
Mr. Speaker! No one is surprised that the Minister for Finance has a different view on taxes than we Social Democrats do. We have discussed this several times. We Social Democrats believe in a strong welfare state.
Sweden is in a recession. Unemployment is high, and youth unemployment is higher. Growth is weak, and municipalities and regions are under heavy pressure. At the same time, we know that the number of people living in poverty has increased significantly. These are people who cannot afford a basic standard of living. It is another issue that the minister and I have discussed several times.
This situation is not a coincidence, but it is a result of a policy that prioritizes broad tax cuts over investments and which has benefited those with the highest incomes while it has become increasingly difficult for families with children. The government has lowered the tax for high-income earners and chosen not to increase the child allowance. This is a policy that does not close gaps.
Let me address the issue of employer contributions. They are not just a cost item, but they finance our collective safety net: pensions, health insurance, and parental insurance. When they are lowered, one must also be prepared to explain how the welfare system is actually to be financed.
We Social Democrats choose a policy that puts work before tax cuts, that puts families with children before high-income earners, and that invests in people, not in temporary discounts. We choose a Sweden where young people get the chance to grow, contribute, and live secure lives.
It is time to leave the right's failures behind us. Sweden's young people deserve better. Just as my colleague concluded their speech, I would like to ask if the minister has any own thoughts on whether this is a good reform when it can be abused in this way.
Finansministern Elisabeth Svantesson (M)
Mr. Speaker! Let me make a few points and provide some facts.
Sweden and many other countries in Europe are currently in a prolonged recession. It was worsened for many of us last spring when Donald Trump started a trade war and played a high-stakes game with our countries' citizens and economies.
Furthermore, there is war in Iran right now, and it risks becoming long-lasting and protracted. Even though Sweden has better conditions than many because we have a different energy mix, this risks hitting Swedish prices.
In the midst of all this, Sweden stands stable. We have a low national debt. We have conditions that few other countries have. I still think that if one is a member of Sweden's Riksdag, one must absolutely describe the problems as they are. That should be done every day. But one must also talk about the opportunities that exist. It is a strength that we have the stable economy. It is a strength that we this year allocate 6 percent of GDP to public investments. The Social Democrats are welcome to come back to me and tell me when the Social Democrats last did that. I think that one should say it as it is.
For three years in a row, we have lowered taxes for everyone. Regardless of how many times the Social Democrats would like to say that the reduction only applies to a certain part of the population, it is a fact that we have lowered taxes for everyone.
It is also a fact that a family with children now, during these too many tough times, has 5,000 kronor more every month compared to 2022. That is because we have lowered the taxes. This summer we are also lowering the preschool fee. We have raised the ceiling for the housing allowance, and we are now launching a reform with dental care for the elderly. We are now lining up important reforms to make Sweden stronger and better.
Am I satisfied with all this? I am absolutely glad that we have been able to do this. Among my colleagues in Europe, it does not look that way. We are also building up a strong defense, and that is what we agree to do. We agree on the investments that need to be made. We can make the investments, and we have doubled the resources for defense despite everything during this period.
Why do I mention all this? We are now in a recession, and different reforms can be used to meet it. From my perspective, it is incredibly important to ensure that there is an expansiveness – and that has also been the case in Social Democratic budgets – and to get money into the economy. There should be both long-term growth reforms, for example infrastructure, which ensure that there is growth in the short and long term, and a cyclical policy. Cyclical policy means that you meet the economic situation you find yourself in in the best way, and that depends on what the recession looks like.
Right now there is a low demand, and there seems to be a consensus on that. In that case, it is reasonable to also conduct temporary cyclical policy. The food VAT is a good example. We know that the reduction of the food VAT has made a difference in the prices. We now have the lowest inflation in Europe.
We have also changed the fuel prices over the years, and now we will further lower the tax on fuels temporarily for a few months because the price is high.
We do all this to support households and break the cycle so that the recovery can continue. We are in a recovery, but the recession risks becoming prolonged if we do not get the economy moving.
Then one can have different opinions on what should be done. I, of course, stand completely and fully behind the reforms that I myself propose. When it comes to the young, there are many small businesses, especially within the service and service sector, that are having a tough time. The reduction of employer contributions makes it easier to hire and for young people to get jobs. Later research findings show a more positive effect on employment than previously. It is good to add.
Remember that it is a question of employment policy and economic policy.
Jonathan Svensson (S)
Mr. Speaker! I want to highlight one of the things the Minister said, namely that Sweden is a fantastic country. Many good things are happening in this country, but quite a lot of bad things are also happening in this country. That is why many of us sitting here in the chamber are politically engaged, that is to say, we want to change society for the better. It is the very cornerstone of politics.
The Minister mentioned several things in her answer. I intended to bring up a few of them. She mentions that ordinary people have received 5,000 kronor more per month. It is possible that in some calculation at the Ministry of Finance, they can make those 5,000 kronor add up, but if you go out and talk to ordinary people on the street, I do not think most of them experience having 5,000 kronor more every month. I believe most of them do not consider that to be the case.
It was a bit funny that the Minister, in passing, highlighted dental care for the elderly. It is good that one strengthens that dental care, but it has occurred at the direct expense of dental care for the group we are discussing today. It is still a bit funny to note in context because the free dental care has been removed for 19–23-year-olds.
There is still relatively much evidence that the reform, namely the reduction of the employer contribution, is not the most effective measure one can take in this situation. It is not a universal solution to push back youth unemployment. Rather, there are other tools and methods that one would need to utilize to give more young people a reasonable chance to get a job.
My conviction that the reduction of the employer contribution is not the most effective reform is strengthened by Aftonbladet's review, namely that it in practice means a subsidy of an individual company's profit. It is not to manage the taxpayers' money in a correct way, and it is unfortunate that the government cannot consider taking other measures than this.
I want to ask the Minister again: Could the reform not have been designed in another way or could a different prioritization have been made?
Finansministern Elisabeth Svantesson (M)
Mr. Speaker! We differ here. The government is lowering the costs of employing young people during a difficult time when much is uncertain and tough for both companies and young people. The reform should, of course, not be exploited by anyone, but it is a clear difference.
One can, just as we do, invest in vocational adult education, strengthen the school in many ways, get textbooks into the system and invest in the young people's education to give them a foundation for life.
But one can also, in this problematic and gloomy situation, lower the cost of employing young people. It will make it so that more young people get opportunities. It has only been a few weeks since the reform, but one company has made it clear that the reform will not benefit the young. It is shameful, and it stands out. Therefore, this debate is good.
But the fundamental difference between the Social Democrats and the Moderates in this situation is that we would rather lower taxes instead of raising them. We do not believe that raised taxes and higher costs are always the solution to Sweden's problems.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.