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Economy

"Cautious" new budget presented

Published tisdag 12 oktober 2010 kl 15.00
Finance Minister Anders Borg

Sweden’s new center-right minority government has presented its first budget covering the fall season – predicting continued growth and decreasing unemployment but nevertheless promising only few and cautious reforms.

Observers foresee no major problems in getting parliamentary approval for the budget, since the red-green opposition has too little support to block it and the new anti-immigrant Sweden-Democrats say they will not vote against the government this time  – and instead will come up with their own budget.

Swedish Finance Minister Anders Borg insists his new budget is the same one he would have even if the government alliance had maintained its majority.

The conservative moderate minister claims his policies of the last four years in office have helped stabilize and strengthen Sweden’s economy despite the global financial crisis –  in contrast to some European Union neighbors forced to make drastic cuts in public spending to cover giant budget deficits.

The budget repeats earlier forecasts of a growth of 4.8% in gross national production for the coming year – and tapering only slightly off in the next few years to come.  It also sees a continued rise in the number of employed – with unemployment now at 8% dropping to 6%  before new elections 4 years off.

Although predicting a continued economic upswing, Anders Borg still describes his budget as “careful.”

Finance Minister Anders Borg adds that one way he hopes to create new jobs is with cuts in value added taxes for restaurants, catering companies and hotels –  a boost for the tourist and food industries – but the opposition has already rejected this.

Some critics feel the budget will not end the widening gap between the rich and poor in Sweden and that it won’t make it easier for people in this Nordic nation to start new businesses or expand smaller companies into larger ones hiring more people – since high payroll taxes and business bureaucracy still hinder new efforts. 

Chief analyst Thorbjörn Isaksson of Nordea Bank approves the new budget.

Those benefiting most with the new budget are those covered by the few solid promises of reforms:  another tax cut for pensioners – who will still have to pay higher taxes than those with employment  – and bigger benefits for families with children.

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