fiscal sustainability in sweden
DESCRIPTION
Fiscal Sustainability in Sweden. The Swedish National Audit Office. The Swedish National Audit Office. The Government’s sustainability analysis Audit results. Why is Fiscal Sustainability Important?. Macro-economic stability Confidence in the welfare systems => willingness to pay high taxes - PowerPoint PPT PresentationTRANSCRIPT
no 1
Fiscal Sustainability in Sweden
The Swedish National Audit Office
no 2 The Swedish National Audit Office
•The Government’s sustainability analysis
•Audit results
no 3
Why is Fiscal Sustainability Important?
• Macro-economic stability
• Confidence in the welfare systems => willingness to pay high taxes
• Political contract between generations
• Potential problems: Eroding tax-bases, demographic development
The Swedish National Audit Office
no 4
The Government's Analysis
• Long-term projections presented in the Budget Bill and in annual report to the EU
• Public sector revenues and expenditures are projected in a 50 year (or longer) perspective
• Central government debt used as sustainability indicator
The Swedish National Audit Office
no 5
Swedish PopulationAge Group 65+, Per Cent of Total Population
The Swedish National Audit Office
20502045204020352030202520202015201020052000
26
24
22
20
18
16
26
24
22
20
18
16
no 6
General Government Income and ExpenditurePer cent of GDP
The Swedish National Audit Office
2050204520402035203020252020201520102005
58
56
54
52
50
48
58
56
54
52
50
48
Income Expenditure
no 7
General Government Net LendingPer cent of GDP
The Swedish National Audit Office
2050204520402035203020252020201520102005
4
3
2
1
0
-1
-2
-3
4
3
2
1
0
-1
-2
-3
no 8
Central Government DebtPer cent of GDP
The Swedish National Audit Office
20502045204020352030202520202015201020052000
60
50
40
30
20
10
60
50
40
30
20
10
no 9
Auditing Public Finances
• Program started early 2006
• New area of performance auditing at SNAO
• 6-7 persons involved
• Focus on the Government's presentation in
the Budget Bills
• 9 reports published
The Swedish National Audit Office
no 10
The Audit Question:
Has the Government presented transparent information about the assumptions on which its analysis of long term sustainability of public finances is based?
The Swedish National Audit Office
no 11
SNAO conclusions
• The Government's presentation and analysis of fiscal sustainability has serious shortcomings
• The sustainability indicator is inaccurate
• The link between the sustainability analysis and short term fiscal policy is weak The Swedish National Audit
Office
no 12
Labour SupplyMillions of hours worked
The Swedish National Audit Office
205020452040203520302025202020152010200520001995
7800
7600
7400
7200
7000
6800
6600
6400
7800
7600
7400
7200
7000
6800
6600
6400
Budget for 2007 Budget for 2008
no 13
SNAO Recommendations
The Government should:
Improve the presentation of the
sustainability
of fiscal policy and develop the analysis
Review the sustainability indicator
Strengthen the role of the long term
estimates
in the design of short term fiscal policyThe Swedish National Audit Office