The Budget Bill contains the Government's proposals for the central government budget for the following year. The Government submits the Budget Bill to the Riksdag in the autumn. In connection with this, a debate is held with the financial policy representatives of the parties in the Riksdag.
When the Budget Bill must be submitted
During an election year, the parliamentary year starts later than it would otherwise. The Government must then submit its Budget Bill no later than three weeks after the vote on the Prime Minister, provided the Government remains in office. If the election leads to a change of government, the new government may need more time to submit its proposal for the central government budget. In this case, the Government presents the Budget Bill within three weeks of taking office, but no later than 15 November. If no new Government has taken office by then, the caretaker Government submits a budget proposal.
Except in an election year, the Government presents its Budget Bill to the Riksdag by 20 September. This is a few days after the start of the new parliamentary year.
In connection with the Government submitting the Budget Bill to the Riksdag, a debate is held with the financial policy representatives of the parties in the Riksdag.
Contains the entire central government budget
The Government's budget proposals must cover all areas of the central government budget, and the Government is not permitted to present any further proposals regarding expenditure or revenue later in the autumn. A bill relating to central government revenue or expenditure for the coming budget year may be submitted subsequent to the Budget Bill only if the Government considers that exceptional economic policy grounds exist for such action.
The central government budget contains all government revenue and expenditure that affects how much money the Government needs to borrow. The cost of the old-age pension system is the only area of expenditure that falls outside the central government budget.
500 different appropriations
The central government budget contains approximately 500 appropriations for different expenditures. An appropriation is a sum of money and can, for example, concern student grants or road maintenance. By allocating different sums of money to different areas of expenditure, the Government proposes how central government activities are to be organised in society. The appropriations apply for one year.
The 500 appropriations in the central government budget are grouped into 27 different areas known as expenditure areas. The expenditure areas correspond to different areas in society. Justice and General environmental protection and nature conservation are two examples of expenditure areas.
Central government revenue
In addition to proposals for expenditure, the Government's Budget Bill also contains an estimate of central government revenue.
Determining revenue is not as easy as determining expenditure. The Government's main source of revenue is different forms of tax. The size of the tax revenues depends on the way in which the economy develops, and this can be difficult to predict in detail.
Government revenue from taxes also depends on the rules that apply to taxes and charges. These rules are not revised every year, but the Budget Bill often contains proposals to change taxes and charges of various kinds.
Every year in the Budget Bill, the Government proposes a maximum ceiling for central government expenditure - an expenditure ceiling. The expenditure ceiling is a limit on the amount of money the government is allowed to spend in a year. The proposed expenditure ceiling in the Budget Bill concerns the third budget year ahead. The expenditure ceiling means that the level of central government expenditure is set three years in advance.
The expenditure ceiling gives the Riksdag and the Government better control over how expenditure changes, and means that they have to take into consideration how different decisions will affect expenditure in the future.
The expenditure ceiling applies to all expenditure in the central government budget, with the exception of interest on the national debt. Interest on the national debt differs from other expenditure since the Government has no influence over it. The expenditure ceiling does, however, apply to the retirement pension system, which is not included in the central government budget.
It is difficult to know exactly how central government expenditure will change over the three years to come. For this reason, the total expenditure ceiling is somewhat higher than the sum of all expenditure. This provides a margin for unforeseen expenditure, without having to exceed the expenditure ceiling, and is known as the budget margin.
The expenditure ceiling can be exceeded
The Riksdag's decision regarding the expenditure ceiling is what is known as a guiding decision. This means that the Riksdag is not bound by any law that says that the central government budget may not be exceeded.
The Riksdag can revise an expenditure ceiling at any time. The need may, for example, arise in connection with a change of government after an election, with the new government presenting a proposal for a new expenditure ceiling for a decision by the Riksdag.
Even though the expenditure ceiling can be changed, it does represent a strong commitment from the Government. The Government promises to pursue policies that ensure that central government expenditure does not exceed the set limit. If there is a risk that an approved expenditure ceiling will be exceeded, the Government shall take the measures that lie within its powers or propose necessary measures to the Riksdag in order to avoid this.
Counter-proposals to the Government's budget proposals
The opposition parties submit their counter-proposals to the proposals contained in the Government's Budget Bill in what are known as private members' motions. They submit an overall presentation of their alternative budget proposals in special economic policy motions. These proposals are known as shadow budgets.
The opposition parties present their proposals for maximum expenditure ceilings and for the allocation of expenditure between the different expenditure areas. They also present an overview of the changes in taxes and charges they wish to implement, and how proposals for different reforms should be financed.
The parties' more detailed counter-proposals regarding expenditure in the central government budget are presented in the form of one motion per expenditure area.
How the Riksdag determines the central government budget
At the end of November, the Riksdag first decides on the total limit for central government expenditure and on the limit for each expenditure area. At the same time, it takes a decision on the estimate of central government revenue. In mid-December the Riksdag decides how the funds are to be distributed within each expenditure area.
How the Riksdag determines the central government budget