Taxes at Centre of Party Leader Debate
Seven and a half month left to the election, and the leaders of Sweden's two political blocs have already gone head to head in a televised political debate to try to convince the voters who of them is most fit to run the country.
Taxes up or down, the national health insurance and young people's entry into the labour market. Those are subjects that were at the centre of the debate when the prime minister and conservative Moderate party leader Fredrik Reinfeldt met the opposition's Mona Sahlin, leader of the Social Democrats, to battle it out in front of the TV-cameras.
Concern over pensioners attracted the most attention in this debate, since they have seen their pensions lowered compared to last year. The pension system in Sweden is linked to economic development. In the beginning of the centre-right government's term in office the pensions were increasing. But now, with a new election around the corner, the country's pensioners see the effect of the financial crisis in their bank statements.
And pensioners make up almost a quarter of the voters.
"We have already lowered pensioners' taxes twice, and we are prepared to do so again, a third and a forth time. I am also prepared to ask them who they think is the most credible when it comes to lowering taxes: is it me, or is it Mona Sahlin?" said Prime Minister Fredrik Reinfeldt.
Mona Sahlin said she was not even going to try to compete with Reinfeldt on lowering taxes: "Reinfeldt will always think that lowering taxes, especially for those with high incomes, is more important than anything else. But a pension is not some kind of allowance, she said, and it should be taxed the same way as for everyone else".
Sahlin refers to the fact that pensioners have been put into a higher tax bracket than people who are working, as a result of the governments tax discount for those with jobs. The government has motivated the difference with the argument that you should be rewarded for working, and that there are costs involved when you work. But the opposition wants to close this tax gap, to start with by lowering taxes for pensioners.
In the longer run, there will however be higher taxes with the red-green alliance in power. Mainly for those with the highest incomes, but also when the discount for those who have work is taken away. Sahlin questioned the belief that lowering taxes would lead to more jobs, and she pointed to Sweden's high unemployment, which is expected to reach 10 per cent this year.
The government's tax system, she says, has not given more jobs, it has meant just one thing: a bigger difference between those who have and those who have not. Instead, Mona Sahlin says her alternative wants to invest for work and fairness, and that is the big difference.
At that, Reinfeldt pointed to the financial crisis that has hit the entire world, accusing Sahlin of lying to get past it. Instead Reinfeldt wanted to focus on how Sweden is to get out of the crisis, where he said he has no idea how higher taxes will create more jobs.
After 20 minutes the TV interchange was over, but the debate continues. Next weekend, all the seven parties in the Swedish parliament - the four in government and the three in the opposition coalition - will take part in a longer televised debate. And the election is still over half a year off.