The Swedish election is around the corner. In order to give SSE students a clearer idea of how two of the biggest parties wish to proceed with fiscal policies and economic measures, MINIMAX has been in conversation with two of the finance minister candidates: the sitting finance minister from Moderaterna* (M), Elisabeth Svantesson, and the candidate from Socialdemokraterna* (S), Mikael Damberg.

*Moderaterna (M) is a centre-right party, Socialdemokraterna (S) is centre-left party (Sveriges Radio). M is the leading government party and S is the biggest opposition party.

TRUDE ELGER: How will you change/not change fiscal policy if you win the election?

ELISABETH SVANTESSON (M)

During this term, the Moderates have strengthened the finances of hard-working families with children by 5 000 kronor a month, and we want to continue that. Next term we want to make sure an ordinary family with children gets an additional 5 000 kronor more per month, partly through lower taxes on work and a tax-free public transport card benefit. We also want to keep making the Swedish economy grow stronger — the Moderates’ goal is for Sweden to be the richest country in the EU within ten years. We can only achieve that by creating better conditions for companies to stay and grow in Sweden, through lower corporate tax and more competitive R&D deductions. But also by having more Swedes earn their own living and contribute to society by setting their alarm clock in the morning and going to work.

MIKAEL DAMBERG (S)

The first thing that needs to be done with regards to fiscal policy is to create order in the public finances again. The government has run enormous deficits – borrowing nearly 200 000 kr per minute, every minute, hour, and day for four years. This has resulted in a very large deficit, which is not sustainable in the long run. However, the most important thing is to have a growing economy and falling unemployment. Today there are 100 000 more unemployed than four years ago, many of them students.

The government has done almost nothing to combat unemployment. Sweden has really underperformed in this respect: if we’d had the same development as the eurozone, many more people would be employed. Basically, I would point to order in the public finances, a growing economy, and falling unemployment. That protects the welfare system and keeps households from having to pay higher interest rates.

Svantesson, which finance-related decision are you most pleased to have carried out during this term?

SVANTESSON (M)

What I’m most proud of is that in a tough period we’ve strengthened the finances of hard-working people through lower taxes on work, lower fuel costs, lower VAT on food, and more. That makes a difference for families who have struggled through the tough inflation years and haven’t as often been able to say “yes” to their children. Additionally, I’m very proud that we brought down high inflation.

Damberg, which finance-related decision that the government has carried out this term are you the least pleased with?

DAMBERG (S)

They’ve pursued a rather unfair economic policy. They’ve chosen to cut taxes a great deal for those with the highest incomes. That would be fine if there were surplus money to do it with, but they did it with borrowed money. They’ve also made it more expensive for retired people to pick up their medication, and Sweden is because of this government the only Nordic country that hasn’t raised children and study allowances during this cost-of-living crisis, because they couldn’t afford it.

This unfair economic policy has also kept Sweden stuck in an economic downturn. It would have been smarter to put more money in ordinary people’s pockets than to pour tax cuts over the wealthiest. Sweden would have come out of this downturn faster, and the economy would have been stimulated more intelligently.

Svantesson, one decision you made during the last term was to borrow money to finance certain tax cuts. This has been somewhat controversial. Why did you choose to do this, and is it something you plan to do next term, if you win the election?

SVANTESSON (M)

Since we had to break free from a prolonged recession caused by domestic consumption being too low, we cut taxes so that hard-working people get to keep more money in their wallets.

Next term, all major, permanent reforms will need to be funded. The Moderates have presented a plan for how we’ll fund our election promises. Our funding is based on reprioritizing within the budget (this will happen in three areas: bureaucracy, aid, and benefits. We will set up a “waste commission” to review public spending, strengthen the work-first principle, reduce benefit fraud, make sure criminals can’t use the welfare systems as a cash cow, and reprioritize foreign aid).

Damberg, the government chose to borrow money to finance tax cuts last term. Is this something your party could do? Why or why not?

DAMBERG (S):

No, continuing to borrow this way is unsustainable. I want to warn against the many election promises being made right now, promises about anything, as if there were no future. It will be costly for the Swedish people, but also for coming generations – young people who will have to pay off these large deficits. So if you want to cut taxes, you first need to get the economy in order. Otherwise, tax cuts just mean more debt and cuts to the welfare system.

With our budget for this year, 9 out of 10 Swedes would have had more money in their pockets – but that would have meant a fair tax cut, a higher child allowance, and abolishing the waiting-period deduction. All things that would actually matter for people’s wallets.

What’s the most important thing you want to achieve with your fiscal policy?

SVANTESSON (M)

That effort should pay off and that the Swedish economy should grow. When we cut taxes on work, we do it in order for hard-working people to be able to keep more of their pay, and in order for taking a job to pay off. At the same time, we’re carrying out a benefits reform with a benefits cap, so it always pays off to move from benefits to work; an activity requirement, so that anyone receiving income support must be active full-time to move closer to the labor market; and qualification requirements for welfare. When more Swedes go to work and contribute, we build a stronger Sweden. At the same time, we want to create better conditions for more companies to stay and grow in Sweden, for example through lower corporate tax and more competitive R&D deductions. Our goal is for Sweden to be the EU’s richest country within 10 years.

There’s a clear dividing line in Swedish politics here. Our side wants to keep taxes low, whereas the other side wants to raise them.

DAMBERG (S)

The most important thing is to get long-term Swedish growth going – for us to grow as an economy, so that ordinary people get more money in their pockets as a result. Real wage increases, so people can afford to dream about that vacation trip, or a new car, or a bigger home.

And for that we need growth and investment in Sweden – that’s what builds a strong country in the long term.

Written by Trude Elger, Minimax Editor-in-Chief