One of the Riksdag's most important tasks is to take decisions regarding expenditure and revenue in the central government budget.
The Riksdag's work with the central government budget starts every year with a proposal from the Government. The Government presents its preliminary proposal - the Spring Fiscal Policy Bill - in April. This contains the guidelines for Sweden's economic and budget policy. In September, the Government presents its second proposal - the Budget Bill - which contains the entire central government budget.
The budget process
Once the Riksdag has determined the central government budget, the Government is responsible for the budget and implements the Riksdag's decisions. The Government is assisted by the public agencies, such as the Swedish International Development Cooperation Agency (SIDA), which works with Swedish development cooperation, or the Swedish Agency for Marine and Water Management, which works for flourishing seas, lakes and streams.
Minister for Finance Magdalena Andersson (Social Democratic Party) submits the Government's proposals for the central government budget - the Budget Bill - to the Riksdag. The Government proposes the size of total central government expenditure for the coming year and how it is to be distributed. The Riksdag decides.
Photo: Melker Dahlstrand
The public sector
The public sector comprises the central government, the municipalities and the county councils, and has overall responsibility for the provision of services such as health care, pre-schools, education, defence and polices services. The various actors in the public sector are responsible for different public services. The central government budget indicates how much is spent on each of these areas and where the money comes from.
Central government is responsible for financial policy
The central government can influence Sweden's economy by means of financial policy, by increasing or reducing revenue and expenditure in the central government budget. Financial policy has an impact, for example, on unemployment and on the value of the Swedish krona.
The Riksbank is responsible for monetary policy
The Riksdag is the central bank of Sweden and is one of the authorities under the Riksdag. The Riksbank is responsible for monetary policy. By raising or lowering interest rates, the Riksbank seeks to ensure that inflation remains at a low and stable level.
Revenue
Approximately 90 per cent of central government revenue derives from taxes. These are taxes on the citizens' wages and other forms of income, VAT (value-added tax) on products that we buy, and tariffs on goods that are imported to Sweden.
Central government revenue is also derived from dividends on and sales of shares, from EU subsidies and when other countries pay back loans from Sweden.
Here are some examples of different sources of central government revenue:
- Taxes (e.g. income tax, VAT, tariffs)
- Income from central government activities (such as fees for ethical testing of research relating to human beings)
- Income from sales of shares, buildings, machinery and land
- Repayments of loans by other countries
- Depreciation (e.g. on property), amortisation payments and national pension contributions
- Subsidies and grants from the EU
Expenditure
The central government budget is composed of 27 expenditure areas, such as financial support for students, energy, transport and communications and defence. Central government expenditure consists of payments of various kinds. A large proportion of expenditure is made up of social insurance contributions.
Here are some examples of different sources of central government expenditure:
- Education
- Defence
- The police service
- Unemployment benefits
- Grants to local government
- Sweden's contribution to the EU
Debt
When central government expenditure is larger than its revenue, it is required to borrow money from Sweden and from other countries. The central government's total debt is known as Sweden's national debt. When a deficit arises in the central government budget, the national debt increases, and when there is a surplus, the national debt decreases.
The National Debt Office is the public authority responsible for dealing with Sweden's national debt. You can read more about Sweden's national debt and see how large it is on the authority's website.
This is what the municipalities and county councils are responsible for
The municipalities are responsible for matters directly affecting the citizens. These include compulsory and upper secondary schools, pre-schools, elderly care, roads, water and sanitation and energy matters.
The county councils are responsible for matters that would be too expensive for individual municipalities to deal with. Their main responsibility is public health and medical care. They are also in charge of public dental care.
Furthermore, the country councils are responsible for public transport in the various counties, together with the municipalities.