Fury over new government “sick tax”

As many as 200,000 employees are on sick leave in Sweden and forecasts suggest the number will reach 250,000 by 2020. The state’s sickness absence costs have doubled to SKr 32 billion in the past five years and the government is now proposing that employers should pay a specific health insurance contribution of 25% of sickness benefit from day 91.

Forecasting that the contribution will cut sickness absence by 5 to 10%, the government has given the social partners until August to come up with a better idea, saying that if they are unable to do so the proposal will be presented in the autumn budget.

Carola Lemne, the director general of the Confederation of Swedish Enterprise (Svenskt Näringsliv) says member companies are furious over the proposal: “The social partners are to find solutions to a complex issue than not even research knows the answer to. The deadline the government has set is ludicrous”.

The ST Union of Civil Servants is also up in arms, saying the proposal will close the labour market for all those suffering chronic illnesses

Municipalities turn to Poland

With an overheated market, Swedish municipal housing companies are finding it hard to build apartments at a reasonable price, which is why they are eyeing bids from construction firms in Poland. The idea is that the modular homes are manufactured in Poland, so that the amount of time the construction workers spend in Sweden, with Swedish wages, is kept to a minimum.

SABO – the Swedish Association of Public Housing Companies – says it has plans to widen its reach and meet Baltic and German companies this autumn in order to cut construction costs.

FSA warns banks

The Swedish Financial Supervisory Authority (FSA) has warned of the growing number of indebted households and now FSA boss Erik Thedéen is calling in the banks to stop growth in lending. “The intention of the discussions is that they will together lead to a more restrictive position for high debt ratio lending,” says Erik Thedéen.

Harry Flam, professor in international economics, soon to be chair of the Swedish Fiscal Policy Council, agrees. However he disagrees that the introduction of a debt ratio ceiling, a maximum loan in relation to disposable income, is the right way to go. Instead he wants to see a cautious lowering of interest rate deductions.

Industry pleased with new ministers

New housing minister Peter Eriksson is a welcome choice for the big construction companies. High on the industry’s list are increased flexibility, investment in infrastructure and more obligations for municipalities.

Construction company NCC’s CEO Peter Wågström says, “Having a politician who has experience from municipal level, the Riksdag and the EU is a positive thing. That’s how you know how to make things happen.” Skanska’s Deputy CEO Anders Danielsson also highlights Peter Eriksson’s experience in negotiating and as a municipal politician. “Many decisions affect the local level so that is important,” he says.

Similarly industry and unions are pleased Sweden now has an EU and trade minister, Ann Linde. Maria Rankka, CEO of Stockholm’s Chamber of Commerce is pleased that trade issues will be given a boost.

Borg predicts housing price crash

It is no longer a question of if, but when Swedish house prices are going to crash, warns former Finance Minister Anders Borg. “I do not see how it can be avoided,” he said at DI Bank conference on Tuesday, claiming that Sweden’s debt and its housing shortage have exceeded levels that mean a future price fall is inevitable. In turn that will hit growth when indebted households cut down on consumption.

Anders Borg wants rent levels for new builds and existing rental properties to be reformed to stimulate the pace of construction, the possibility to build at height in urban areas and curb the potential for municipalities and neighbours to put a stop to planned construction.

In response Finance Minister Magdalena Andersson agreed that the price of rents is an important factor for the development of house prices and that rising household debt constitutes a clear macroeconomic risk. However she does not believe the house price fall is around the corner.

Embargo lift opens for Gripen

The USA’s decision to remove the arms embargo on Vietnam could open the door for major Swedish arms deals with the country. This kind of deal has not previously been possible, as the embargo has included systems that have American components, such as the Gripen.

Christer Ahlström, director general for the Inspectorate of Strategic Products (ISP) says that it is theoretically possible but adds that any such deal must have Swedish approval. “We have had a restrictive view of Vietnam with our guidelines. We should also weigh up the situation for human rights,” he says.

Saab press spokesperson Sebastian Carlsson says that Saab is monitoring developments.

New torpedo order for Saab

Defence company Saab has received a SKr 1.5 billion order from the Swedish Defence Materiel Administration (FMV). The new lightweight torpedo system, which has been ordered for the Swedish Navy, will be able to be used by submarines, surface vessels and helicopters.

Defence Minister Peter Hultqvist (S) says, “This means that a project that was significantly delayed finally looks like it will be realised.” The system is expected to be complete and ready to go into service around 2022-2023.

Insufficient reform

Sweden’s poor performance in the PISA ratings, a decline the like of which has not been seen in any other OECD country in the past decade, poses a threat to the country’s competitiveness, warns the European Commission in its annual report.

The Swedish government receives praise for allocating more funds to education, but the poor performance of pupils with an immigrant background is a cause of concern.

The government is lauded for its efforts to simplify building procedures but its indecision over amortisation requirements is worrying. The Commission urges the government to give the Swedish Financial Supervisory Authority the necessary powers as soon as possible, warning that other measures will be needed to address Sweden’s imbalances.

CEO salaries keep rising

The chief executives of Stockholm’s top listed companies saw their salaries rise by on average 17% last year despite the drop of around 1% in the OMX Stockholm top 30 index during 2015. The overall costs for CEO salaries increased from SKr 753 million to SKr 885 million.

The CEO pay rises should prompt a debate on alternative forms of remuneration, writes DI and points to Jörgen Lantto at biometric company Fingerprint Cards, whose share price has surged by over 1,500%, but who is the lowest paid CEO among the top thirty.

Sjöstedt: Not surprised

Dagens Industri (DI) revealed on Sunday that the Green Party leadership struck an agreement with the Social Democrats over Vattenfall’s lignite operations last autumn, thereby waiving any right to stop the sale of the business for climate change reasons.

The news has sparked outrage from several quarters; Johan Rockström, a professor of environmental science, suggests the government is guilty of hypocrisy, saying: “You cannot with one hand sign the Paris Agreement, and with the other hand allow lignite operations to continue in Germany”.

Left Party leader Jonas Sjöstedt is also critical, although not particularly surprised, and does not rule out the possibility of halting cooperation with the government.