In its 2009 Spring Fiscal Policy Bill, the Swedish government focuses on two areas: grants to local governments and employment policy programmes. This strategy aims to ensure employment and welfare during the global recession.
The Swedish government’s Spring Fiscal Policy Bill, which was published on 15 April 2009, includes several measures to counter the recession and to boost the labour market in order to maintain jobs. However, trade unions and public authorities criticise the government for not stimulating the economy enough. The employer organisation argues that the bill focuses too much on subsidies and not enough on private and public investments.
Content of 2009 spring fiscal policy bill
In its 2009 Spring Fiscal Policy Bill, the Swedish government focuses on two areas: grants to local governments and employment policy programmes. This strategy aims to ensure employment and welfare during the global recession.
The policy bill includes an increased central government grant to the local governments, in order to avoid redundancies and maintain social welfare. The central government grant is to be increased by SEK 5 billion (almost €480 million as at 22 May 2009) a year. Moreover, a supplementary amount of SEK 7 billion (€670 million) is allocated for 2010. The Minister of Finance, Anders Borg, has emphasised the importance of keeping the public finances in good order to ensure that deficits are temporary.
Increased resources are allocated to employment policy programmes to reduce the negative impact that the financial crisis has had on jobs. Some SEK 10 billion (almost €960 million) are allocated in a supplementary budget to activation measures for 2009. The increased resources will be used to help unemployed people to find employment, receive vocational education and training (VET), and gain greater access to traineeships. The government has also introduced a new employment policy programme for unemployed persons, which includes coaching on how to find employment.
Reactions of social partners and public authorities
However, the Confederation of Swedish Enterprise (Svenskt Näringsliv) opposes the increased central government grant to municipalities and county councils. The confederation believes that the funding is too high and runs the risk of resulting in the development of an expanding public sector and a shrinking private sector, as was the case in the 1970s. Employers argue that the government should boost the economy by private and public investments instead of giving grants and subsidies. The confederation advocates bringing forward already planned investments, which would result in the economy recovering without putting long-term finances at risk.
The Swedish Confederation of Professional Associations (Sveriges Akademikers Centralorganisation, SACO) approves of the grant to the local authorities, but points out that the government must be prepared to increase the funding if needed. Indeed, the Swedish Trade Union Confederation (Landsorganisationen, LO) argues that the grant to the local governments is insufficient and the Swedish Confederation of Professional Employees (Tjänstemännens Centralorganisation, TCO) underlines that the estimates of the National Institute of Economic Research (Konjunkturinstitutet, KI) should be fulfilled. KI predicts that the local governments need an additional SEK 8–10 billion (€766–€960 million) in order to keep employment at the same level as in 2008, as well as an extra SEK 40 billion (€3.8 billion) for other stimulation measures (press release, 15 April 2009).
The Swedish Fiscal Policy Council (Finanspolitiska Rådet), a public authority set up by the government in 2007, has also criticised the government’s measures. The council claims that the deep recession requires more stimulation of the economy in general, and particularly for local government.
Many Swedish trade unions consider that the limited provisions in the Spring Fiscal Policy Bill present a risk that the mistakes from the economic crisis in the 1990s will be repeated, with permanent unemployment as a consequence. In fact, TCO strongly criticises the policy bill, deeming it a ‘low budget’ bill. The Chair of TCO, Sture Nordh, argues that the government is focused on trying to help unemployed people to find jobs when there are few jobs to find. Moreover, TCO emphasises that the government should improve the conditions for unemployment benefits in the current recessionary climate (press release, 15 April 2009).
Trade union views on training measures
LO believes that the government does not focus enough on education and training. The trade union confederation considers that contributions to companies that invest in VET for their employees would be a risk-preventive measure, as companies would improve their chances to survive the economic crisis and stay competitive (article in the weekly magazine LO-Tidningen, 15 April 2009). The Chair of LO, Wanja Lundby-Wedin, contends that the government’s measures will encourage passivity among unemployed people, whereas more investments in education would give benefits in the long term (article in the daily newspaper Aftonbladet, 15 April 2009).
SACO has reacted positively to the government’s focus on more VET, but emphasises the importance of allocating resources to higher education to ensure its quality (press release, 15 April 2009).
Karolina Lovén, Oxford Research
Eurofound recommends citing this publication in the following way.
Eurofound (2009), Social partners censure new finance bill, article.
