When Finance Minister Elisabeth Svantesson on Thursday is to point out how the government views the reform space ahead of the autumn budget, she will have all eyes on her.
The Swedish Trade Union Confederation (LO) and the Confederation of Swedish Enterprise are in agreement: It's time to stop saving in the coffers. More than the 50 billion kronor that the National Institute of Economic Research (KI) estimates the reform space to be, is needed, they believe.
In this situation, with a low-conjuncture, rising unemployment, and households and companies having a very tough time, an expansive budget is needed. If there ever was a time to really invest, it's now, says Sven-Olov Daunfeldt, chief economist at the Confederation of Swedish Enterprise.
He sees a reform space of 65 billion kronor. LO's economists are talking about up to 100 billion kronor.
"Out of the sandbox"
Sweden is screaming for things that need to be done. It's time to climb out of the sandbox and get the workshop going again, says LO Chairman Johan Lindholm.
Both LO and the Confederation of Swedish Enterprise want to see investments in infrastructure. Johan Lindholm also mentions more money for schools, healthcare, and care.
We also want to see direct support for groups with low and medium incomes. They are the ones who keep this country going and have done so for many years, during the downturn and during the pandemic. They have gone to work every day and should not have to go on a starvation diet, he says.
Concrete proposals include, among other things, abolishing the sickness benefit deduction and increasing child allowance.
"Crisis budget"
Sven-Olov Daunfeldt, on the other hand, does not want to see what he calls another "crisis budget". By this, he means, among other things, various support to households in the form of increased benefits or extra support to regions and municipalities.
It's important to increase the incentives to go from benefits to work, where we lack reforms, he says.
Last year, the Confederation of Swedish Enterprise was sharply critical of the government's decision to pause the uprating of the threshold for state tax. Now, Sven-Olov Daunfeldt expects the limit to be raised. He also hopes that the government will abolish the phase-out of the job tax deduction.
Of course, those with higher incomes will benefit in the short term, but no one else will be disadvantaged. It's a growth reform that is most likely to drive growth in Sweden and will benefit everyone, he says.
