Determines the central government budget
One of the Riksdag’s most important tasks is to take decisions regarding expenditure and revenue in the central government budget. On this page, you can read more about the budget process.
The central government budget
From proposal to budget
Determining the central government budget is one of the Riksdag's five key tasks. Here you can follow the various steps of the budget process.
In mid-April, the Government presents the Spring Fiscal Policy Bill to the Riksdag. It contains the proposed guidelines for economic policy. The guidelines form the basis of the forthcoming budget proposal in the autumn. The Riksdag takes its decision on the Spring Fiscal Policy Bill in June.
The Budget Bill contains the Government's proposals for central government revenue and expenditure for the following budget year. The Government presents the Budget Bill in the autumn, after which the opposition parties present their counter-proposals, often referred to as shadow budgets.
When the Government has presented the Budget Bill and the opposition parties have submitted their counter-proposals, it is time for the Riksdag to rework the proposals and take its decisions on the budget.
The Government can propose amendments to the central government budget, despite the fact that the budget has already started to apply. It does this in what is known as amending budgets, which it presents in April and in September, in conjunction with the Spring Fiscal Policy Bill and the Budget Bill.
Amendments to the central government budget may also be proposed on other occasions if the Government finds special grounds for doing so. Such proposals are known as additional amending budgets.
The Spring Fiscal Policy Bill
Work on the budget begins in April when the Government presents the Spring Fiscal Policy Bill. It contains the proposed guidelines for economic policy. These proposals form the basis of the forthcoming Budget Bill, which the Government presents in the autumn. In the Spring Fiscal Policy Bill, the Government also presents an assessment of the current economic situation and of the projected development of the economy in the next few years. Among other things, the Government presents its assessment of what level the expenditure ceiling should be in the third year ahead. More about the expenditure ceiling below.
In connection with the Government submitting the Spring Fiscal Policy Bill to the Riksdag, a debate is held with the party spokespersons for financial policy.
The Riksdag adopts a decision on the Spring Fiscal Policy Bill in June.
Together with the Spring Fiscal Policy Bill, the Government also submits an amending budget for the current budget year.
The Budget Bill
The Budget Bill contains the Government's proposals for the central government budget for the following year. The Government's budget proposal is submitted to the Riksdag in the autumn and should contain all parts of the central government budget, both revenue and expenditure. The only central government expenditure that is presented separately from the budget are the costs for the old-age pension system.
Central government expenditure
Altogether, there are approximately 500 appropriations in the central government budget for different items of expenditure. An appropriation is a sum of money and can concern such things as student finance or road maintenance.
Appropriations in the central government budget are divided into 27 different expenditure areas. The expenditure areas correspond to different areas of society. Justice and General environmental protection and nature conservation are two examples of expenditure areas.
Just over 20 per cent of expenditure in the budget goes to the social insurance system, which is intended to provide economic security, for example, in the event of illness. Just over 10 per cent is earmarked for general central government grants to the local authorities.
Examples of central government expenditure
- Education
- Defence
- The police and the judicial system
- Contributions for unemployment benefits
- International development cooperation
- Sweden's contribution to the EU
- Central government revenue
The Government's Budget Bill also contains an estimate of expected central government revenue. Approximately 90 per cent of central government revenue derives from taxes. These are taxes on wages and other forms of income, VAT (value-added tax) on products that we buy, and tariffs on goods that are imported to Sweden.
Examples of central government revenue
- Taxes (such as income tax, employers’ social security contributions, VAT, tariffs)
- Revenue from central government activities (such as fines and certain charges)
- Revenue from sales of shares, buildings, machinery and land
- EU grants
The size of revenues from taxes depends on economic development, which can be difficult to predict in detail. Central government revenue from taxes also depends on the rules that apply to taxes and charges. These rules are not changed every year, but the Government's budget proposal often contains proposals regarding changes to taxes and charges.
Central government debt
When central government expenditure is larger than its revenue, the state needs to need loan money from Sweden and 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 Swedish National Debt Office is the public agency 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 agency's website.
About Sweden's national debt on the Swedish National Debt Office website
Expenditure ceiling sets a limit for expenditure
Every year in the Budget Bill, the Government proposes a ceiling for central government expenditure. 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 applies to the third budget year ahead. This means that the upper limit for central government expenditure is established three years in advance.
The expenditure ceiling gives the Riksdag and Government better control over how expenditure changes, and means that they must take into consideration how various decisions 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. This differs from other expenditure as the Government has no influence over it. The expenditure ceiling also applies to the old-age pension system, which is not included in the central government budget.
Budgetary margin for expenditure ceiling
It is difficult to know exactly how central government expenditure will change over the coming three years. 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. This is known as the budgetary 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 already decided expenditure ceiling at any time. The need may, for example, arise in connection with a change of government after an election. The new government may then present 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.
When is the Budget Bill submitted?
When it is not an election year, the Government presents the Budget Bill to the Riksdag by 20 September at the latest. This is usually a few days after the start of the new parliamentary year.
During an election year, the parliamentary year starts later than it does 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 (or on the Thursday before, if 15 November falls on Friday–Sunday).
If no new Government has taken office by then, the caretaker Government submits a budget proposal.
Counter-proposals to the Government's Budget Bill
In connection with the Government submitting the Budget Bill to the Riksdag, a debate is held with the financial policy spokespersons for the parties in the Riksdag. The opposition parties submit their counter-proposals to the proposals contained in the Government's Budget Bill in budget motions, where the parties give an overall presentation of their budget alternatives. These counter-proposals are known as shadow budgets.
The opposition parties present their proposals for maximum expenditure ceilings and for the distribution 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.
The Riksdag's work with the central government budget
When the Government has presented the Budget Bill and the opposition parties have submitted their counter-proposals, it is time for the Riksdag to rework the proposals and take its decisions on the budget.
The Riksdag decides on the budget in two stages: first as a whole, and second in greater detail. When all the decisions have been taken, the Riksdag compiles the central government budget for the following year and submits it to the Government in the days before Christmas.
Amending budgets
Sometimes things do not turn out as the Government and the Riksdag had intended. A government agency may, for example, need more money than planned. The Government can propose an amendment to the central government budget, despite the fact that the budget has already started to apply.
This is known as an amending budget, and these are presented by the Government in April and in September, in connection with Spring Fiscal Policy Bill and the Budget Bill. Amending budgets usually mean that some appropriations are increased, while others are reduced by a corresponding amount.
The central government budget does not always need to be changed. Sometimes it is possible instead to exceed an appropriation by borrowing from the appropriation for the coming year. Government agencies are obliged to closely follow economic developments during the budget year and inform the Government in good time if it is likely that an appropriation will be exceeded.
Additional amending budget
The Government can also, if special grounds exist, present further proposals for amendments to an already decided budget in an additional amending budget.
Since 2020, the Riksdag has taken decisions on several amendments to the central government budget, in addition to the two ordinary amending budgets. These have partly been in order to finance necessary measures during the COVID-19 pandemic, and partly in order to provide various forms of support to Ukraine, on account of Russia's war of aggression against the country.
Proposals for amendments to the current year's budget can also be presented by the Riksdag's Committee on Finance.