The Social Democratic Party's congress adopted new guidelines for economic policy on Thursday. Ahead of the decision, there was pressure for a more progressive policy from the left wing of the party.
But before the debate began, a broad compromise was reached that satisfied the majority.
Building a country costs money, said Markus Kallifatides, representative from Stockholm.
We are now on our way to adopt an economic policy that makes it possible to reverse social trends.
The Debt Can Grow
The party wants a total defense fund of at least SEK 250 billion that the state will borrow. The compromise means that the fund will be used not only for the military but also for transportation networks, healthcare preparedness, energy security, and infrastructure projects with high climate benefits.
The congress also opened up for letting the national debt grow more than today, if necessary. Today, the limit, known as the debt anchor, is 35 percent of GDP.
The government has also proposed borrowing SEK 300 billion for military and civil defense. The Social Democratic Party's economic policy spokesperson, Mikael Damberg, sees ahead of him negotiations with the government on how the money will be used. But also on how increased defense allocations of perhaps SEK 70 billion per year will be financed in the long run, since they cannot be financed forever.
You can't get away from that, and it will be a major expense if you don't get financing, says Damberg.
Ordinary People
The congress was satisfied with the formulation that tax revenues need to increase for welfare financing and that "the very wealthiest should contribute more."
The party wants to see a tax reform where large capital incomes are taxed more. The party has proposed a bank tax and talked about a phasing out of the job tax deduction for those with monthly incomes over SEK 100,000.
Damberg says that they do not intend to raise taxes.
We are very cautious with taxes that directly affect household economies, he says.
One important part of the party policy is that ordinary households should get better off.
We believe that it is one of the explanations for why we have strong support, he says.
Peter Wallberg/TT
Maria Davidsson/TT
The Social Democratic Party's New Economic Policy
TT
The sickness benefit deduction will be abolished.
The child allowance will be increased.
Will establish a comprehensive loan-financed total defense fund for investments in civil and military preparedness, also in transportation networks, healthcare, and energy security.
Open to loan-financing certain strategic infrastructure projects with high climate benefits.
As an effect of increased borrowing, the debt anchor's level may need to be raised.
Tax revenues need to increase to secure welfare financing.
The very wealthiest should contribute more.
A tax reform will be implemented.
Will limit opportunities for tax evasion and tax planning.
Will see a state investment bank with ambitious basic capital that can contribute to climate-smart future investments.
