Government newsletter - For jobs and welfare - combating the crisis and creating better conditions
16 April 2012

For jobs and welfare - combating the crisis and creating better conditions

The Government wants Sweden to be a country in which people are given the opportunity to shape their own everyday lives. In which it pays to work and companies are encouraged so more job opportunities emerge. In which welfare functions properly and is there to support citizens should the need arise. In its continued efforts to achieve this, the Government is investing in measures to prevent unemployment from becoming entrenched, but also to strengthen the way the economy works, improve the financial situation of certain vulnerable groups and enhance welfare. The Government is presenting these priorities in its Spring Fiscal Policy Bill submitted to the Riksdag today.

In the Spring Fiscal Policy Bill, the Government sets out the scope and direction of its policies ahead of the concrete measures to be presented in the Budget Bill this autumn.

The objective is full employment

The Government's goal for its economic policy is to move Sweden towards full employment. Increased employment and reduced exclusion closes gaps and increases cohesion. Full employment is also a prerequisite to ensure Sweden is a competitive country with long-term sustainable growth. This is necessary in order to finance welfare in Sweden. Many reforms have been implemented with effect, but more must be done.

The economy and public finances set the frameworks

There are frameworks, however, as the Government formulates its policy. One such framework is the development of the economy. The Ministry of Finance makes a forecast over several years, which in addition to a main scenario also indicates the risks of weaker growth. The forecast presented in this Spring Fiscal Policy Bill indicates the economy in 2012 is significantly weaker than the Government had believed in September. The economy will begin to recover in the second half of the year, although there is still a risk of considerably poorer developments.

Public finances also set frameworks for our efforts. First and foremost, they provide resources for fiscal policy measures. But they also impact expectations, as has become very clear during the European debt crisis. Financial incentives have no effect if there is a risk the Government may later need to tighten its fiscal policy. Households and companies instead save the new money offered by reforms rather than using it to consume and invest.

The risk the economy may be weaker than indicated in the main scenario necessitates the implementation of safety margins to enable the Government to cushion the impact of the crisis on jobs and welfare standards should a more negative scenario become reality.

Limited scope used for measures for jobs and welfare

The need for safety margins limits the scope for reforms in the budget for 2013 to be presented by the Government this autumn. At that time the Government will propose reforms that ensure unemployment does not become entrenched, that the functioning of the economy is enhanced, that the economic standard is improved for the most vulnerable groups, and that welfare is strengthened.

In its work on the Budget Bill for 2013, the Government will therefore focus on:

  • Putting more people to work in an inclusive labour market - where for example reduced unemployment among young people and those with foreign backgrounds is given priority
  • Improving welfare - with measures for better education, increased accessibility of health care and a more effective justice system
  • Strengthening competitiveness through tax measures and measures in research, innovation and infrastructure
  • Ensuring a stable financial system, with greater demands on banks to hold capital to cope with losses and a stronger position for consumers
  • Improving access to housing by making it easier to sublet and by encouraging housing construction
  • Working for an effective climate policy focusing on a sustainable and resource-efficient energy supply with no net emissions of greenhouse gases into the atmosphere by 2050.

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