Parties Promise Billions Despite Limited Budget Space, Economic Institute Warns

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Parties Promise Billions Despite Limited Budget Space, Economic Institute Warns
Photo: Henrik Montgomery/TT

During Almedalen Week alone, both the Tidö parties and the opposition presented various promises that would burden the treasury by many billions of kronor per political bloc and year.

It includes everything from lower taxes to investments in pensioners, trains and families.

At the same time, the scope for reform in the next term is limited.

According to the National Institute of Economic Research's latest forecast, the budget space, that is, how much the government can spend on unfunded reforms, will be approximately SEK 95 billion in total for the years 2027 to 2030. Anyone who wants to invest more than that must therefore save on other things or raise taxes.

This is less than the money that the government has scraped together for 2026 alone in new investments, where the total is around SEK 100 billion in the regular budget and supplementary budgets.

However, as early as February, Finance Minister Elisabeth Svantesson (M) flagged that the scope for reform in the next term would be limited.

Svantesson pointed to costly future investments that will take up a large part of the reform space, such as investments in infrastructure, the expansion of new prisons and defence.

Save on the state

To finance their proposals, the Left Party and the Green Party have proposed, among other things, new taxes on billionaires.

KD, SD, M and S have all talked about making the state apparatus more efficient in various ways, such as making savings in ministries, authorities and public procurement.

For example, the Moderates claim to have identified possible savings of SEK 71 billion from reduced bureaucracy and lower subsidies.

However, according to Jonas Hinnfors, professor emeritus of political science, that is a bit of wishful thinking.

Many people talk about streamlining, but the experience of how much money it actually brings in is quite bleak, he says.

Must stand out

He describes it as symbolic politics to be able to say that there is room for various reforms.

That is something that can be claimed in advance.

However, according to Hinnfors, it is quite expected that promises will be made in the election campaign. The parties are coming forward with their own election manifestos and need to stand out from the crowd.

If you have a coalition or a partnership, each party can promise quite a lot before an election. But in coalitions, parties always have to back down; you can't expect everything to be implemented.

After an election, negotiations await instead.

Then you often come down a bit in terms of amounts, you can't add up everything they say, says Hinnfors.

A: A “workers’ pension” that is said to be able to be implemented in the next term. Described as a billion-dollar reform.

C: A tax-free basic salary of just over 15,000 SEK per month. The proposal is estimated to cost 24.2 billion SEK per year.

V: A baby bonus of 15,000 kronor for those who have a child for the first time. Part of a family package worth 16.5 billion kronor.

MP: Wants to spend 216 billion kronor more than the government (for the period 2026 to 2037) on removing bottlenecks and increasing railway capacity with new main lines.

M: Working parents of young children will receive a special parental tax deduction. Cost around 6 billion kronor.

SD: An interactive map showing where convicted pedophiles live.

KD: Proposal to increase child benefit to SEK 2,000. Estimated to cost SEK 16.5 billion.

L: State income tax reduced in several stages, starting on January 1, 2027. In the long term, it will be halved. Costs up to SEK 30 billion.

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By TT News AgencyEnglish edition by Sweden Herald, adapted for our readers

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