How the Riksdag works 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. The preparatory work before the decisions are taken starts when the Riksdag receives the Budget Bill and the other parties have submitted their counter-proposals in the form of budget motions, often referred to as shadow budgets.
Stage 1: The Riksdag determines the expenditure limits for the budget
In the first stage, the Riksdag determines the maximum ceiling for expenditure, as well as an estimate of expected revenue in the central government budget. As a result of this decision, the limits or frameworks for the budget are determined, that is, how much money will go to the “expenditure areas”, which represent different areas of society.
This is how the Riksdag makes its framework decision on the expenditure limits:
- The parliamentary committees analyse the proposed expenditure limits in the Budget Bill and in the opposition parties’ counter-proposals. The expenditure areas are divided among the parliamentary committees, according to subject area. For example, the expenditure area International development cooperation is considered by the Committee on Foreign Affairs and Financial support for students by the Committee on Education. The committees can propose that an expenditure area should receive more or less money, or that money is redistributed among different expenditure areas.
- When the committees have completed their consideration, they submit a statement of opinion to the Committee on Finance, which adopts a position and presents an overall proposal on the limit for each expenditure area in the central government budget. The Committee on Finance’s proposal is presented in the form of a committee report.
- The members of the Riksdag hold a debate and take a decision on this proposal in the Chamber of the Riksdag around 20 November each year.
This is what the Committee on Finance’s proposal on expenditure limits includes:
- the expenditure ceiling for each of the coming three years;
- total expenditure for next year’s budget;
- how much money each expenditure area will receive next year;
- which taxes and charges will be changed next year;
- an estimate of expected central government revenue for next year;
- preliminary expenditure limits and estimates of revenue for the following two budget years.
After the Riksdag has taken its decisions concerning the expenditure limits, it is time to decide in greater detail how expenditure is to be allocated within each expenditure area. This is done in the second stage of the Riksdag’s work with the central government budget.
Stage 2: Proposals for activities and appropriations
In the second stage, the Riksdag decides on the details of the budget, that is, what the money within the different expenditure areas will be used for. The committees prepare, by drawing up proposals for how the money is to be distributed among different appropriations in each expenditure area. Each appropriation constitutes a sum of money for a particular activity.
Expenditure areas and appropriations
Altogether, there are approximately 500 appropriations in the central government budget for different items of expenditure. The appropriations are divided between 27 expenditure areas. Within the expenditure area Justice, for example, the largest appropriations are the Police Authority, the Prison and Probation Service and the Swedish Courts.
The committees can redistribute money among appropriations
The committees can set different priorities to those presented by the Government in the Budget Bill, and redistribute money between different appropriations in an expenditure area. However, they cannot present proposals that would lead to the limits decided by the Riksdag for each expenditure area in stage one being exceeded.
If a committee wishes to approve a proposal in a motion from one of the opposition parties or wishes to take an initiative of its own within an expenditure area, it must calculate the effects on central government finances. If the committee wishes to increase certain expenditure, it must also reduce other expenditure.
Extended expenditure limits
Sometimes a committee finds that more money is required for an expenditure area, and that the expenditure limit therefore needs to be extended. The expenditure limit can only be extended after the Riksdag has taken a decision on this following a proposal from the Committee on Finance. The Committee on Finance can then examine whether the Riksdag shall, at the same time, reduce the limit for another expenditure area. The Committee on Finance and the Riksdag must always decide how increased expenditure will be financed.
Budget completed in December
At the beginning of December, the committees complete their proposals on the distribution of money within the expenditure areas. The members of the Riksdag then debate and decide on the proposals during December. The Riksdag takes a decision for each expenditure area. Once all the decisions have been taken, the Committee on Finance compiles the central government budget for the coming year and the Riksdag submits it to the Government in the days before Christmas.