Determines the budget

One of the Riksdag’s most important tasks is to take decisions regarding expenditure and revenue in the central government budget.

The Riksdag's work on the central government budget starts every year with a proposal from the Government. The process commences in April when the Government presents the Spring Fiscal Policy Bill to the Riksdag. The Spring Fiscal Policy Bill contains guidelines for the economic policy that will form the basis of the Government's forthcoming budget proposal in the autumn. In September, the Government presents the Budget Bill. It contains proposals for central government revenue and expenditure for the coming budget year.

The Riksdag decides on the central government budget for the forthcoming budget year in two stages. In the first stage, the Riksdag takes a decision on total expenditure and an estimate of revenue in the central government budget. This decision determines how much money goes to the various areas of society - the expenditure areas.

When this first decision has been taken, usually in late November, the Riksdag determines the details of the budget in a second stage, that is, what the money in the various expenditure areas will be used for. In mid-December, the Riksdag has completed its work and has taken all the decisions regarding the central government budget.

Once the Riksdag has taken a decision on the central government budget, the Government is responsible for implementing the Riksdag's decision. The Government is assisted by the public agencies, such as the Swedish Board of Student Finance, which takes decisions regarding financial support to students, or the Swedish Agency for Marine and Water Management, which works for flourishing seas, lakes and streams.

Central government revenue

The central government budget includes all central government revenue and expenditure. The cost of the old-age pension system is the only area of expenditure that falls outside the central government budget. Revenue and expenditure affect how much money the state needs to borrow.

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.

Here are some of the examples of different sources of central government revenue:

• Taxes (such as income tax, employers’ social security contributions, VAT, tariffs)
• Income from central government activities (such as fines and certain charges)
• Income from sales of shares, buildings, machinery and land
• Subsidies and grants from the EU

Central government expenditure

Central government expenditure consists of payments of various kinds. A large proportion of expenditure - approximately 20 per cent - goes to social insurance contributions, for example sickness benefits. Approximately 10 per cent goes to general government grants to the municipalities.

Central government expenditure is distributed among 27 expenditure areas, including Labour market and working life, Defence and contingency measures, Communications, Migration and Financial support for students.

Here are some of the examples of different kinds 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 debt

When central government expenditure is larger than its revenue, the state needs to borrow money from Sweden and from 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.

The Swedish National Debt Office website