High taxes seen as a vote-winner among contented Swedes
Saturday 05 February 2005
The move also underlines the success of the so-called "Nordic model" under which countries following Sweden have forged competitive economies with high levels of taxation and public spending. Although Swedes face some of the highest tax bills in the world, they enjoy free, high-quality school and university education, generous unemployment benefits, state- funded maternity and paternity leave and guaranteed child care. So popular is the system that Eurosceptics won their referendum campaign against euro membership in 2003 mainly by presenting the single currency as a threat to the welfare state.
The Swedish Finance Minister, Par Nuder, said there will be a "gradual" rise in taxes over five to 10 years and challenged other governments to follow suit. He told the Financial Times: "Contrary to many of my European colleagues, I dare to say what is necessary. What people are demanding from us all over Europe is that we should invest more in the public sector."
With elections next year, Sweden's centre-left government is convinced presenting itself as the champion of the welfare state is a vote-winner even if it means higher taxes.
Jens Henriksson, state secretary at the Swedish finance ministry, said: "People may be able to afford five flat-screen TVs, but what they really want is a good school for their children." He said increased taxation is necessary to pay for a predicted rise in the cost of public services over the next 30 years as the country gets richer and more demands are made on education and health care.
The Swedish government has yet to decide which taxes to increase but the cost will fall on the average citizen. Though the tax burden in 2003 was 51.4 per cent of gross domestic product - the EU's highest - corporate tax rates are low to compete with other European member states.
Mr Henriksson, who took four months of paternity leave when his second child was born - with four-fifths of his pay reimbursed by the state - said that citizens feel they are getting value for money. He said: "You start to get a popular revolt against taxes only when people feel they are paying and not getting anything for it."
And the "Nordic model", with its investment in hi-tech science, has delivered economically. Sweden's economy grew at almost 4 per cent last year with a 3 per cent increase predicted for 2005. This has been achieved with the highest rate of investment in research and development of any European country, 4.3 per cent of gross domestic product compared to 1.9 per cent in the UK in 2003.
Excellent child care has brought more women into the workplace; good schools have delivered a well-educated workforce; public spending has created good transport links, and high unemployment benefit has allowed thousands of workers to retrain and change profession.
Poul Nyrup Rasmussen, the former Danish premier and president of the Party of European Socialists, said: "Sweden, Denmark and Finland are among any list of the world's eight most competitive econo-mies. We have shown we can unite competitiveness, high social security and good welfare with good environmental standards. The right form of social security, including unemployment benefit, plus strong public sector investment in education and research make up a Nordic formula that makes us competitive. In the 21st century the most valuable thing you can have is motivated, innovative, well-educated human beings."
- 1 Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
- 3 World learns of app that shows you who unfriended you on Facebook, app promptly crashes
- 4 Chris Moyles reportedly set to make radio comeback with new breakfast show on XFM
- 5 The Greece debt crisis explained in less than 100 words
Florida man sentenced to two-and-a-half years for having sex on the beach in front of a child
Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
Tube strike July 2015: Is it still on? Everything you need to know about the industrial action
Eiji Tsuburaya: Godzilla co-creator honoured in today's interactive Google Doodle
Florida teacher sentenced to 22 years in prison for sexually abusing three pupils
More Britons believe that multiculturalism makes the country worse - not better, says poll
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
Sickness and disability benefits could be reduced by £30 a week as part of £12bn welfare cuts
£23000 - £27000 per annum: Recruitment Genius: A Business Analyst is required ...
£16000 - £23000 per annum: Recruitment Genius: To succeed, you will need to ha...
£8 per hour: Recruitment Genius: This is an opportunity to join an award winni...
£7 - £9 per hour: Recruitment Genius: Are you outgoing? Do you want to work in...