The Budget: Gas Prices Are Rising While Billions Continue to Flow to the EU

Swedish drivers and business owners are expected to face higher costs when the transitional government presents its 2027 budget. Tax cuts will be eliminated, while more than 61 billion kronor will be allocated to the EU. Additional billions will go toward migration and foreign aid, while the Swedish Federation of Business Owners is calling for lower taxes.

Minister of Finance Elisabeth Svantesson (M) submitted On Thursday, the government presented its budget proposal for 2027 to the Riksdag. But the budget is far from final. Two months after the election, Sweden still lacks a new permanent government. As a result, the interim government has presented a provisional budget based primarily on previous decisions, without any major new policy initiatives.

The budget will now be considered by the Riksdag, which is expected to make a decision in December. Furthermore, when a new government takes office, it may present its own proposals and adjust both taxes and government spending. This means that the amounts currently proposed are still subject to change.

Another Tax Blow to Motorists

The temporary reduction in the fuel tax expires at the end of November. According to the industry association Entrepreneurs Gasoline and diesel could become about three kronor more expensive per liter. Higher transportation costs also risk affecting businesses and leading to higher prices for goods in stores.

– This is not the right time to make both business and everyday life more expensive, says the policy director of Företagarna Patrick Krassén.

Nor is the government proposing any further reduction in the electricity tax, even though such a proposal had previously been put forward. At the same time, the temporary discount on public transportation will end at the turn of the year. This means that several relief measures for Swedish households are being phased out while costs remain high.

The EU Receives Over 61 Billion – Police Lose Out on Funding

At the same time, 61.6 billion kronor is proposed for Sweden’s EU contribution in 2027. Defense and civil emergency preparedness will receive approximately 234.6 billion kronor. The planned defense initiatives will continue, as all parties in the Riksdag support them. At the same time it is noted that the fact that the defense forces are not meeting the goals set by the NATO military alliance, even though politicians have taken out loans totaling nearly 300 billion kronor for that purpose.

The Prison and Probation Service will also retain several planned funding increases. However, the National Police Authority will not receive a previously announced increase of 2.8 billion kronor, according to Dagens industri. Research and efforts to reduce healthcare wait times will also receive less funding than previously planned.

Nearly 13 billion for immigration

Although several planned initiatives have been halted, 12.7 billion kronor will be allocated to migration in 2027. The funds will go, among other things, to the Swedish Migration Agency, the reception of asylum seekers, housing, and legal proceedings. These costs, therefore, pertain to both government agencies and host communities.

At the same time, approximately 1.67 billion kronor of the migration costs can be classified as international aid. This primarily concerns costs related to asylum seekers during their first year in Sweden. Consequently, parts of the reception process are funded through the aid budget.

Over 45 billion for foreign aid

The budget also includes 45.1 billion kronor for international aid. If aid expenditures in other parts of the federal budget are included, the total aid budget amounts to no more than 53 billion kronor. These are large sums, even as several previously planned initiatives in Sweden are being scaled back.

Nearly 43 billion kronor of the appropriation goes toward development assistance. About 1.8 billion kronor is allocated to the Swedish International Development Cooperation Agency (Sida). Funds also go to the Folke Bernadotte Academy and other international development efforts, among other things.

The government also wants to be able to provide capital to the state-owned company Swedfund. The proposals include, among other things, up to 500 million kronor for investments in Ukraine and an additional 600 million kronor for climate investments. These are potential capital injections, not disbursements that have already been approved.

At a time when Swedish households are struggling and the modest relief measures implemented over the past year are being scaled back, several billion will be sent to other countries. This is despite the fact that reports and reviews detailing where the money is actually going are conspicuously absent.

Business owners are calling for lower taxes

Business leaders are criticizing the budget for not providing greater relief to businesses and households. Policy Director Krassén wants the next government to lower the costs of running a business. He points in particular to employer contributions, corporate tax, and income tax.

– Reduced employer contributions, lower corporate taxes, and lower marginal tax rates are a good start, and there are ready-made proposals on how this can be implemented, he says.

A new government can amend the budget and propose different priorities. At the same time, the Ministry of Finance expects Sweden’s economy to grow by 2.3 percent in 2027 and unemployment to fall to 7.7 percent. The question of new tax cuts will therefore have to wait until the next administration.