Response to interpellations 2023/24:492, 619 and 620 on the consequences of inflation for household finances

Finansministern Elisabeth Svantesson (M)

Madam Speaker! In light of the consequences of inflation for household finances, Linus Sköld has asked me how the government intends to act to support the most economically vulnerable households. He has also asked me what measures the government intends to take to stop the consequences of inflation for household finances.

Linus Sköld has also asked me how the government intends to act to protect ordinary people's standard of living from the consequences of inflation and whether the government intends to take measures so that poverty does not increase among ordinary people.

Linus Sköld has also asked me how the government intends to act to protect the economically most vulnerable households from the consequences of inflation, as well as whether the government intends to take measures to reduce the economic vulnerability of teenage parents.

Inflation has hit many households hard, for example through high food prices and increased housing costs. Many households have had it tough, and therefore one of the government's central priorities has been to combat inflation through a restrained fiscal policy. It is pleasing that the latest outcomes now show that the government's policy is working - inflation is falling clearly this year. Even though forecasts are always uncertain and may be subject to adjustment, it currently looks as if the inflation target will be reached during 2024. To reach that, it is central that we now focus on bringing the inflation fight to its goal.

At the same time, it has been important for the government to support households, companies, and welfare that have had it tough during the crisis. In the budget bill for 2024, several reforms were therefore implemented that support households, for example, a strengthening of the job tax deduction as well as lowered tax on pensions, lowered taxes on fuels, and an extended supplementary grant in the housing allowance for vulnerable households. The government has also lowered the reduction obligation for gasoline and diesel. Many economically vulnerable households have additionally received compensation for the high inflation via price-indexed grants and transfers. This has given households with scarce resources more in their wallets and better conditions to manage increased costs for food and rent.

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Linus Sköld (S)

Madam Speaker! I thank Elisabeth Svantesson for the answer.

Elisabeth Svantesson stands here in the chamber and says that the inflation target is about to be reached, and that is indeed pleasing. One must admit that, even if one is an opposition politician. What Elisabeth Svantesson did not mention in her answer is that the inflation that has occurred will not disappear. The effects of the inflation that has occurred in recent years will persist for many years to come, unless those who govern the realm are prepared to make political priorities to rectify this.

Let us take some examples. Recently, we have received reports of a number of records. It is the Swedes' debts to the Enforcement Authority, counted in the number of debtors and in the debt amount. Furthermore, it is the number of evictions of families with children.

What prompted one of the three interpellations that Elisabeth Svantesson has combined into this debate—which is why it sounded like I have asked so many damn questions, but they have been asked in three different interpellations—was a new shameful record for a nation like Sweden. It concerns the number of Swedes who apply for debt restructuring. 31,000 people applied for debt restructuring in 2023. That is 22 percent more than in 2022. With politics, one can prioritize and facilitate for those who are in the worst position.

Another example in another of the interpellations concerns a teenage parent, in this case a single parent who lacks income qualifying for sickness benefit and is therefore dependent on the basic insurance in the parental insurance and a child allowance. That group of parents has lost 13 percent in real income over the last four years. The significance of this is that the eggs the teenage parent bought for Easter were still 12 percent more expensive at the end of March this year than they were last year.

The price increases remain. When Elisabeth Svantesson says that inflation is going down, it only means that the rate of price increases is slowing down. Prices will not go down; instead, prices will continue to increase.

The basic level of the parental allowance does not increase unless Elisabeth Svantesson decides that it shall do so. The child allowance does not increase unless Elisabeth Svantesson decides that it shall do so.

The teenage parent who is dependent on [the support] for their livelihood will not get more unless Elisabeth Svantesson is prepared to raise those levels. But the eggs will be even more expensive next year, and that is the point. Elisabeth Svantesson can afford to strengthen rot and rut with 1 billion, but to increase the maintenance support for single parents, for half the price, she cannot afford it.

Politics is about prioritizing, and Elisabeth Svantesson is prioritizing incorrectly.

(Applause)

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Isak From (S)

Madam Speaker! Thanks to the Minister for Finance and thanks to Linus Sköld for important interpellations!

This is not a favorite for me in repeat, but the fact is that I stood in this speaker's chair about 14 years ago and had an almost identical interpellation debate with roughly the previous previous previous Finance Minister – Anders Borg, at least – about child poverty and that child poverty escalated in Sweden in the wake of the financial crisis.

Child poverty continued to be high. It may have decreased slightly. I hope that it decreased slightly, but we can state that in 2021 Sweden had the highest child poverty in the Nordic countries. Now it has increased with the inflation in Sweden while Sweden's neighboring countries have taken measures to limit the effects for families with children.

Sweden has become poorer, especially for vulnerable households. At the same time, we can observe that the number of billionaires in Sweden continues to increase. The banks' profits continue to increase. Just as Linus Sköld pointed out, the proportion of families with children who end up with the Enforcement Authority also continues to increase. This must be met with politics.

Majblomman reports that more people are now eating school lunch. That is commendable and important. It is perhaps also important that the municipalities ensure that they have the finances for milk at the lunch table. Unfortunately, not all municipalities have quite been able to afford that now.

Madam Speaker! We Members of Parliament have, in January, been out and met with school classes. In Umeå, for example, I met a school class which unfortunately reported that the Friday treats have decreased. The families do not have the same resources to have Friday treats.

A girl who thought her mother's cooking might not be the best also thought that an important part of life was being able to buy a pizza at some point. The family had calculated very clearly that the pizza price right there had increased by 40 percent.

There will be less pizza for the families with children. At the same time, we have a government that thinks it was not important to invest in an additional child allowance for the families or, for that matter, to raise any other important part, for example the social assistance, for the most vulnerable.

Those who now end up with the enforcement authority probably hoped not to do so, but now they are there. Now measures are needed, because just as Linus Sköld so profitably highlighted, prices have continued to rise. Inflation is on its way back, but prices continue to increase - and for the most vulnerable, they increase most noticeably. Then, Madam Speaker, there will be less "fredagsmys" for many families with children.

(Applause)

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Jytte Guteland (S)

Madam Speaker! Thanks to the Minister for Finance for the answers but above all thanks to Linus Sköld for the important interpellations in this economically difficult time for the Swedish people!

Just as the interpellor has pointed out, we in Sweden have records when it comes to tough matters - debt restructuring, evictions and those in need at the aid organizations' food stations. I recently heard about this on the radio. New groups now need help in the form of an extra food box to manage to support themselves and their families.

At the same time, the value of the security benefits is being eroded. This could apply to a young new mother who sees her basic level in the parental allowance being eroded. The interpellor pointed out in their interpellation that RUT has made calculations on this and shown that the real value becomes 13 percent less.

The children should not pay for the crisis we are going through. That was also our focus last year when we Social Democrats presented our spring budget. It was a budget that put the children in the foreground, because it is actually the children who are hit hardest in these times. They are hit because the parents cannot afford to put food on the table. We see today that one in ten Swedish parents says that they are worried that the children will not be full throughout their upbringing.

We also know that the prices that are high in the grocery stores right now are those on fruit and vegetables. That means that there are very many parents who hesitate to buy just fruit and vegetables for their children. It will also have consequences for health, for public health, when young people do not get used to eating fruit and vegetables during their upbringing. There we will get public health effects far into the future.

To secure the situation of families with children, the Minister for Finance should do everything right now and ahead of the upcoming spring budget. It should be about how we strengthen the most vulnerable families with children so that they get the best opportunities to get through this economically tough time.

I think the interpellator also clearly demonstrated in their contribution how serious it is that the price levels that have existed have eroded the finances of many families all over Sweden, and that this is not something that is repaired when prices are now more stable. They are also not completely still, and in surveys being conducted, we see that food prices have also increased in 2024.

Even if prices had remained completely still, it is the case that the resilience of the Swedish people is much weaker right now. All savings have been eaten up for many. Relatives have been asked. One has resorted to the tricks that allow one to get through one or two more months. But what is the Swedish people to do when the government is not prepared to do its utmost to help, above all, children and young people to move forward during economically difficult times?

(Applause)

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Finansministern Elisabeth Svantesson (M)

Madam Speaker! I thank you for the interpellations. They touch upon a very important issue. Many people all over Sweden, from north to south, are currently struggling to make ends meet.

Sweden has become significantly more dangerous in recent years. But Sweden has also become poorer, and the main reason that Sweden and the Swedes have become poorer is precisely inflation. It hit with force in 2021, and it has tormented many people. Even those who do not have small margins, Madam Speaker, but rather quite average incomes, have suddenly seen their mortgages and mortgage costs increase dramatically. But it is of course worst for those who already previously had it tough with small margins.

It is precisely for that reason, Madam Speaker, that it has been and is important to ensure that inflation goes down. That work continues, and it is very pleasing that it is on its way.

Madam Speaker! I am very well aware of and have said many times here in the chamber that even if inflation goes down, it does not mean that prices fall. We will live with the consequences of the high prices for a long time. Individual goods can of course go down for various reasons, but the price level will be where it is.

That is also why it has been important for us in our four parties, when we have presented our budgets, to really support households through a difficult time. Normally, Madam Speaker, one often has expansive budgets in an economic downturn. We have kept that away. Why? Yes, the budget has been restrained so that inflation does not pick up even more speed - and so that inflation will simply come down.

But still, we have supported households. I have said it before. We have lowered fuel taxes twice. The Social Democrats have been against this every time. We have changed the reduction obligation significantly so that the diesel price actually dropped by 4 kronor from December 31 to January 1. The Social Democrats were against this. This has eased things for full-time or part-time working parents who are struggling in their finances and who must have a car.

Furthermore, we have lowered the tax for ordinary wage earners. The Social Democrats are usually against that. We have lowered the tax on wage income and on pensions.

These are some of the things we have done to facilitate. Furthermore – and I think this is important – it is most accurate for the families with children who have it the hardest that we further increased and extended the housing allowance. Now it is being extended further. Even though inflation is going down, it is extended for the rest of the year because the consequences of inflation are still very tangible for many people.

Madam Speaker! I respect that many Social Democrats in the chamber think that we should have done many more things. If we were to add all these things together, the sum would naturally have meant that we would not have stayed within the framework that we have to adhere to.

I mean that what the government is doing is important and right. We must bring down inflation, and we are on our way to bringing it down. We have, since the first day, ensured that we support households so that they can manage through this time. I said it in the autumn of 2022, and I say it now: It is tough, and it will be tough. But we will get through this together.

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Linus Sköld (S)

Madam Speaker! Thank you, Elisabeth Svantesson, for another contribution where my basic thesis is nonetheless acknowledged: price levels will continue to make things difficult for households, and they will make things most difficult for those households that are in the worst position. Elisabeth Svantesson also answers that she is not prepared to do anything further to support these households.

An extra child benefit for the current year was included among our budget proposals. Elisabeth Svantesson and her party colleagues could have said yes to this, if they had wanted to. An increased maintenance support of 500 kronor per month for single parents, Elisabeth Svantesson could have said yes to, if she had wanted to. The same applies to the permanent increase of the housing allowance for families with children, which Elisabeth Svantesson has now finally come to think also seems to be a good idea. We have submitted this proposal previously. Or take, for that matter, the proposal for a debt cut that we have submitted to prevent even more from falling into need of debt restructuring.

I had the Riksdag's investigation service calculate a few typical families. Two of the interpellations we are debating concern two different typical families: one family with teenage children, and one family with a median income.

In the latter case, it concerns two adults with median salaries and two children, living in a rental apartment of 80 square meters. If one calculates their incomes in 2020 prices, that is, moving the value of what they earn now back to 2020, the value has become 9 percent less. This is what we usually speak of as ten years of real wage increases having been eaten up by inflation. When it comes to these 9 percent, I should, before Elisabeth Svantesson says once again that she has made a tax cut, say that decided reforms for 2024 are included in this reduction of the disposable income.

The problem here is that the wage increases are lower than the price increases and that the child allowances are not adjusted for inflation. If one were to index the child allowances or ensure that our proposal for an extra child allowance payment became a reality, the decline would be mitigated, even for the average family, who also have to buy herring for the Easter table. If the eggs were 12 percent more expensive this year than last year, the herring was 8 percent more expensive. As long as the wage increases do not catch up, that is, lie above the inflation rate, the purchasing power or the standard of living for Swedish households will continue to be lower.

This government has irrevocably contributed to the fact that Swedish households will be poor for a long time to come, poorer than they were when the government took office. Those who have the least are the worst affected.

Elisabeth Svantesson could have prioritized differently - introduced a tax on the banks' excess profits and used the money for this type of measures - but she does not want to do that. She could have introduced a readiness tax or appointed a food price commission, as we suggested. But she did not want to do any of this, because she wants to protect high-income earners in this crisis by, for example, making it cheaper to luxury-renovate the bathroom.

(Applause)

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Isak From (S)

Madam Speaker! Four out of ten single parents have borrowed money to manage their everyday finances - to manage to put food on the table - in Sweden 2024. It is they who, in the long run, risk ending up with the Enforcement Authority. Every other family of them with the lowest incomes has cancelled parts of or all of the children's leisure activities. One in five single parents has not been able to afford to eat until full during the last year, 2024. This is what we face and what many of the most vulnerable find themselves in.

Now inflation is falling, but this risks having lasting effects. Are it the children who have not had the opportunity for extracurricular activities who will most easily return when things turn around? No, they will be the last to return, so for them it could be a quite long time. Then a policy is needed that signals that we need interventions here and now. We need to meet this situation, where especially single-parent households but also households with two parents with low incomes end up in a very bad position and cannot afford the most basic things. This is what we face now, 2024.

(Applause)

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Jytte Guteland (S)

Madam Speaker! The Minister for Finance tells the Swedish Riksdag in his contribution how satisfied the government is with the reforms that have been implemented. But the problem is, as the interpellator has pointed out, that the economic situation is so difficult for many Swedes right now. Prices have been high for a long time. It has been about energy and food prices and also, as the Minister for Finance points out, interest rate hikes on housing loans for a leveraged people. For a very long time, the Swedish people have suffered under this, for practically the entire time that the current Minister for Finance has been in power.

The Swedish people have used all the means available to manage their finances. They have asked relatives. They have used savings. They have cut back on costs. They refrain from enrolling children in leisure activities. They choose the cheaper products in the stores. They cycle to work and only take the car on exceptional occasions.

The Swedish people have done a lot, but we still face another expensive year. We now stand without the resources that we had in 2023.

The question is: What does the Minister for Finance and the current government want to do to help the Swedish people and perhaps above all the young generation? We know that it is extra difficult when life starts out tough. Now it is about children who perhaps do not get a nutritious diet because the parents cannot afford fruit and vegetables. It is about people skipping extracurricular activities. It concerns a generation that was also affected by the pandemic and perhaps does not have the habit of being in extracurricular activities. It is therefore young people who have not been able to go out and learn everything that our generation got. The question is: What is the government doing now?

(Applause)

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Finansministern Elisabeth Svantesson (M)

Madam Speaker! There is a genuine commitment among the debaters for those who are having a tough time right now. I think that is very good. But it is surprising that the Social Democrats never go to the forefront to lower the tax for those with low incomes. It is they who have been hit hardest during this period of high inflation. It is they who have had their wallets emptied, and their purchasing power has decreased.

Other compensations - guaranteed pension, social assistance, and others - have been increased. It is our system, and it is good, because it compensates for tough situations. But those who have low incomes and do not have these benefits have it toughest. Still, the Social Democrats always go to the forefront to increase a benefit or to introduce a benefit.

With this said, I think the housing allowance is important. It was this government that increased and extended this supplement. It is important, because it hits those who have it the toughest. But the one who works hard every day and has difficulty making the money stretch – I have been there myself – should still think: Who is it that wants to encourage me to set the alarm, go to work, and work hard when I actually don't get many more kronor than my neighbor's family who live on nothing but benefits? That is the question I think one should ask.

Madam Speaker! What I have said about inflation is not something I say merely as a communicative strategy. I say it because I know that it is inflation that has hollowed out people's wallets. It is inflation that has made it tough. That is why it is and has been important to combat it.

That is why we lowered the tax on income, to still increase purchasing power somewhat even though it is still tough. That is why we lowered the tax on pension, to ease things somewhat even though the situation is tough.

Madam Speaker! We have discussed inflation for quite a long time now. Inflation is a poison. It must be fought, and it will come down. We will have to return many times in the future regarding its consequences, but the most important thing now is that it is coming down and that we are also seeing a brightening in this somewhat dark tunnel regarding the development of prices. But those who are having a tough time should know that everything we in this government do is about bringing down inflation and supporting those who are having it toughest.

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Linus Sköld (S)

Madam Speaker! Inflation is coming down, Elisabeth Svantesson, but not until after it has eaten up ten years of real wage increases. It has, therefore, sent ordinary wage earners back ten years in time and made them ten years poorer. It does not come down until Swedes' debts to the Enforcement Authority have hit record highs, not until the evictions of families with children have hit record highs, and not until the number of Swedes applying for debt restructuring has hit record highs.

During the time that Elisabeth Svantesson has sat on her hands and called it inflation fighting, all other Nordic countries have introduced an extra child allowance or increased the child allowance in various ways. Furthermore, smaller price increases have been seen in the other Nordic countries than what we have seen in Sweden.

Elisabeth Svantesson's inflation fight has meant that Swedish households have become relatively poorer in relation to households in the other Nordic countries, and they have also not received any increase in the child allowance.

Elisabeth Svantesson has prioritized abolishing the tax on plastic bags and lowering the tax on luxury bathroom renovations or on hiring home help. These are targeted investments for those who have the best. At the same time, she has failed to facilitate for families with children, who are dependent on the basic level of parental leave, or for that part of the child allowance or maintenance support. With the same money, one could have prioritized significantly differently. We could have avoided the shameful records for the Swedish economy that we have seen during 2023.

The hope, Elisabeth Svantesson, is that the government comes to its senses and prioritizes differently moving forward.

(Applause)

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FÖRSTE VICE TALMANNEN

The Minister for Finance waives his final contribution in this debate.

The interpellations debate was hereby concluded.

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