M agdalena Andersson borrow money even though it is booming. The government will take an economic-political risk, to avoid having to ask refugees against cuts or tax increases.
Magdalena Andersson on the way to today’s press conference. Photo: Maja Suslin / TT
The Sormland late summer is dazzling when the government meet on Harpsund for annual consultations prior to the autumn budget.
and Finance Minister Magdalena Andersson’s description of the state of the Swedish economy is almost as beautiful as the surroundings.
“I will be able to present positive forecasts in terms of both finances and employment,” said Andersson, before she pushed away a power point fireworks display with charts of economic developments in Sweden and abroad.
Prime Minister Stefan Löfven usually worry that many Swedes are concerned, despite the good economic development. And so many Swedes believe that the trend is in the wrong direction.
And if not the Swedes quickly becoming more optimistic, then the difference between the government and the citizens’ perception of reality is now becoming even bigger.
for the red cottage next Harpsund describes Magdalena Andersson developments in very bright colors. Developments in the labor market is stronger than expected and growth is higher than in many comparable countries.
The public finances now looks to develop better than forecast in the spring.
Magdalena Andersson says that the government plans to spend 24 billion on reforms in the autumn budget for 2017.
Ten of them are already mortgaged for increased government subsidies to municipalities – that is money that should go to strengthening the municipal welfare, with particular focus on municipalities that have hosted many refugees.
14 billion remains, and Andersson’s list of priorities for the budget then looks for the following: focus on jobs, on more climate initiatives, the reception and integration, and for increased security.
the final is most likely that the increased resources for police to reduce some of the Swedes’ concerns – which in any case Stefan Löfven often connects with the crime.
part of this scope for reform is due to some expected costs fall dramatically, especially refugee reception where the number of asylum seekers this year looks set to stay around 30 000, compared with 160 000 in 2015.
Reduced migration costs SEK 10 billion, compared with the spring forecast, the largest item on the plus side when the government tally. But you can also reduce the expenditure forecast for sick leave, which is an important trend.
In addition, taxes increased by about five billion next year.
This money will be accumulated to pay reforms – but they are not enough to everything but just over ten billion, what is called the unfunded reforms. This means that the government must borrow money. And the public finances will go to deficit throughout the term.
Which is linked to the cost of the large number of asylum seekers last year.
There is one thing that the opposition now alerts about irresponsible spending increases. It is the task of the opposition to criticize the government.
It has more weight when the government’s own expert authorities formulate criticism. And the Institute of Economic Research (KI) is calling on the government to tighten during the economic boom, to equip the economy for a rainy day.
It is also a fairly conventional economic-political theory. But if the government would follow the rule right now, one would be forced to take measures that can easily become unpopular – either savings or increased taxes.
And to suggest deterioration, to pay for the reception of refugees, is not an attractive political strategy for the government.
the refugee wave and the boom came to Sweden in roughly the same time. It has great advantages, but was difficult to manage, according to the fiscal rulebook. That is why the government is taking an economic-political risk.
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