Sven-Olov Daunfeldtchief economist at Swedish Enterprise, is critical of large parts of the economic presentation.
— As feared, we seem to be getting a crisis budget rather than a growth budget. This is a fiscal impasse, he says.
— Svantesson exaggerates the risks of high inflation. The budget will only take effect next year, and all forecasts indicate that inflation will then have fallen to the Riksbank’s target of two percent, he continues.
Daunfeldt is of the opinion that the finance minister presented several deficient priorities.
— Municipalities, regions and households do not need additional billions in support. In our eyes, this is an incorrect prioritization.
Hope to see increased employment tax credit
He emphasizes the importance that the budget needs to contain long-term reforms.
— More people need to get to work. We need to increase the drive to work, through, among other things, lower taxes for those with low incomes and introducing a grant cap.
– There were not many indications of tax cuts in the budget, but our hope is that we will at least get an increased employment tax deduction and that the break-even point for paying state income tax will be raised, continues Sven-Olov Daunfeldt.
LO’s chief economist Laura Hartman welcomes Svantesson’s announcement that welfare will be strengthened.
— But 40 billion is too stingy considering how serious the situation is in municipalities and regions. We expect that 30 billion will need to be shifted in welfare alone, she says.
“Svantesson hides behind inflation”
Hartman believes that the government can afford to make further investments.
— The Minister of Finance continues to hide behind inflation. Households are on their knees. Continuing to support them properly, for example with increased child support, would be a reasonable priority.
Lars Calmforsprofessor emeritus of economics at Stockholm University, says that the finance minister presented a neutral forecast.
— The direction seems to be that fiscal policy should not become expansive but be neutral in the situation we are in now.
He adds:
— But it was a short-term focus. I hope that there is more long-term thinking in the budget, including how we will manage the surplus target and the system for state grants to municipalities and regions.
Trade criticism against tax cuts
The tax cuts should be accommodated in budget space of 40 billion, Calmfors assesses.
— After the Social Democrats’ statement yesterday that they want to lower the tax, it will be difficult for the government not to come up with broad tax cuts, probably an additional job tax deduction in the budget.
– On the other hand, I do not hope that additional funds are wasted on lowering the tax on fuel and electricity.
The trade union Unionen is critical of both the government’s and the opposition’s analysis that tax cuts are what wage earners are most in need of right now.
“For most working people, this would still only mean a small addition to the wallet. If the government is serious about wanting to fight inflation and support households, it is time to present measures that make a real difference to everyone who worries about food prices, electricity bills and new interest rate increases,” says Tobias Brännemochief economist at Unionen in a comment.