The four parties comprising the centre-right government alliance are meeting in Harpsund, south of Stockholm, to work on forming an autumn budget that they hope will help them beat the Social Democrats and gain a record third consecutive term.
The National Institute of Economic Research has warned that hefty cuts in public spending may become necessary if the government spends too much on pre-election measures.
But Anders Borg says the government ”does not share the Institute’s assessment,” and that Sweden has “good staying power.” He says the troubled world economy will affect Sweden, but that domestically the economy is growing, and the Eurozone has stabilised.
The government thinks the economy will grow by 1.2 percent this year and by 2.5 percent next year, with the proportion out of work roughly the same.
Minister Borg says that by 2015 Sweden will be “approaching balance” and able to have the planned surplus of one percent of GDP.
The governing parties will now bargain over which projects will be paid for by the forecasted budget surplus.
The Moderates, the biggest party, want a fifth income tax cut. The Center Party is pushing for companies to contribute less to sick pay; the Liberal party wants to raise teachers’ pay, and the Christian Democrats want tax cuts for pensioners and smaller class sizes in pre-school.
The government will present its budget proposal to parliament on the 18th of September.
The opposition Social Democrats, which has been doing well in various opinion polls this year, is also meeting to formulate its own rival autumn budget.
Economic spokesperson Magdalena Andersson said today that if her party came to power next year then it will not reverse a fifth set of tax cuts planned by the government.
"When we get to election day, we will start from the realities there and then. We will not go to the polls on past Sweden, but go to the polls on the future," says Magdalena Andersson to Swedish Radio News.