The Budget Bill contains the Government's proposals for the central government budget for the following year. The Government submits the Budget Bill to the Riksdag in the autumn. The Riksdag determines the budget in two stages; first as a whole and second in detail. Unless it is an election year, the Government presents its Budget Bill to the Riksdag by no later than 20 September. This is a few days after the start of the new parliamentary year. In an election year, the Riksdag convenes somewhat later. If the election leads to a change of government, the new government may need more time to prepare its proposals for the central government budget. The Government can therefore wait until 15 November in an election year to submit the Budget Bill. Minister for Finance Magdalena Andersson (Social Democratic Party) walking to the Riksdag with the Government's Budget Bill. Photo: Melker Dahlstrand. Contains the entire central government budget The Government's budget proposals must cover all areas of the central government budget, and the Government is not permitted to present any further proposals regarding expenditure or revenue later in the autumn. The central government budget contains all government expenditure that affects how much money the Government has to borrow. The cost of the old-age pension system is the only area of expenditure that falls outside the central government budget. 500 different appropriations The central government budget contains over 500 appropriations for different expenditures. An appropriation is a sum of money and can concern maximum charges for child daycare or road maintenance. By allocating different sums of money to different areas of expenditure, the Government proposes how central government activities are to be organised in society. The appropriations apply for one year. The 500 appropriations in the central government budget are grouped into 27 different areas known as expenditure areas. The Riksdag and the Government use goals for the various expenditure areas to steer central government activities. Central government revenue The Government's Budget Bill does not only contain proposals for expenditure, it also contains an estimate of central government revenue. Determining revenue is not as easy as determining expenditure. The Government's main source of revenue is different forms of tax. The size of the tax revenues depends on the way in which the economy develops, and this can be difficult to predict in detail. Government revenue from taxes also depends on the rules that apply to taxes and charges. These rules are not revised every year, but the Budget Bill often contains proposals to change taxes and charges of different kinds. Expenditure ceilings The Riksdag's work with the central government budget means that a limit is set for central government expenditure for the next three years by an expenditure ceiling. The expenditure ceiling is a limit on the amount of money the government is allowed to spend in a year. The expenditure ceiling is given in Swedish crowns (SEK) and is not raised, even if the crown decreases in value owing to inflation. Each year in the Budget Bill, the Government proposes a new ceiling for the last year of the three-year budget cycle on a rolling basis. The Riksdag determines an expenditure ceiling for the coming three years, at the same time as it decides the limit for total central government expenditure for the next budget year. The expenditure ceiling gives the Riksdag and the Government better control over how expenditure changes and means that they have to take into consideration how different decisions will affect expenditure in the future. The expenditure ceiling applies to all expenditure in the central government budget, with the exception of interest on the national debt. Interest on the national debt differs from other expenditure since the Government has no influence over it. The expenditure ceiling also applies to the retirement pension system, which is not included in the central government budget. It is difficult to know exactly how central government expenditure will change over the three years to come. For this reason, the total expenditure ceiling is somewhat higher than the sum of all expenditure. This provides a margin for unforeseen expenditure and is known as the budgeting margin. If the Riksdag uses the budgeting margin, however, it means that government expenditure will also increase. The expenditure ceiling can be exceeded The Riksdag's decision regarding the expenditure ceiling is what is known as a guiding decision. This means that the Riksdag is not bound by any law that says that the central government budget may not be exceeded. The Riksdag can revise an expenditure ceiling at any time. The need may, for example, arise in connection with a change of government after an election. The new government may present a proposal for a new expenditure ceiling for a decision by the Riksdag. Even though an expenditure ceiling can be changed, it does represent a strong commitment from the government in office. The government promises to pursue policies that ensure that central government expenditure does not exceed the set limit. Alternative budget proposals from the opposition The opposition parties submit their counter-proposals to the proposals contained in the Government's Budget Bill in what are known as private members' motions. They normally submit an overall presentation of their alternative budget proposals in special economic policy motions. The opposition parties present their proposals for maximum expenditure ceilings and for the allocation of expenditure between different expenditure areas. These proposals are known as shadow budgets. They also present an overview of the changes in taxes and charges they wish to implement and how proposals for different reforms should be financed. The more detailed budget proposals are contained in the parties' tax and appropriations motions. Proposals regarding expenditure in the central government budget are normally presented in the form of one motion per expenditure area. The Riksdag and the central government budget The Government has presented the Budget Bill to the Riksdag. The political parties and members of the Riksdag have presented their counter-proposals during the general private members' motions period. Now it is time for the parliamentary committees to consider the proposals before the Chamber takes a final decision on the central government budget. This is done in two stages: first it takes a decision on the total budget, and next it determines the details of the budget. The Riksdag uses a special decision-making procedure known as the framework model when considering the Budget Bill and counter-proposals. This means that the Riksdag first takes a decision on the overall size of the budget and how much to allocate to each of the 27 expenditure areas. By means of this decision, expenditure is fixed for the entire budget and for each expenditure area. The expenditure level for the expenditure areas thereafter functions as a limit which may not be exceeded in the autumn when the Riksdag decides how the money is to be allocated within each expenditure area. Taxes and charges At the same time as it determines the framework for expenditure, the Riksdag also decides the taxes and charges that are to be implemented. This enables the level of central government revenue for the following budget year to be estimated. Once the levels of revenue and expenditure have been determined, the level of borrowing requirements can also be calculated. The exact level of revenues from tax is difficult to determine since these are linked to the development of the economy, which is not always easy to predict. For this reason, the Riksdag approves an estimate in the case of central government revenue, rather than determining a framework. Counter-proposals from the opposition All expenditure limits and tax changes are treated as a single "package". The parties in the Riksdag that do not support the Government's proposal must present their counter-proposals in a similar way. This means that the opposition parties cannot form a majority on a single issue in the budget and use this to reject a proposal, they must agree on a whole package of proposals. The various packages are weighed up against each other when the Riksdag makes a decision. Stage 1: Proposals for expenditure ceilings All proposals to the Riksdag must be considered by one of the 15 parliamentary committees before the members of the Riksdag take a decision in the Chamber. When the committees prepare the decision concerning ceilings for the 27 expenditure areas, the Committee on Finance plays a central role. The other parliamentary committees are responsible for specific expenditure areas. They then submit their views on the Government's and opposition parties' proposed ceilings to the Committee on Finance. These views are known as statements of opinion. The committees can also propose that an expenditure area receive more or less money or that money be distributed differently between the different expenditure areas. The committees' proposals can also affect the size of central government revenue. The Committees The Committee on Finance's proposed expenditure ceilings Once all the committees have submitted their proposals, the Committee on Finance examines these proposals and uses them as a basis for submitting an overall proposal on ceilings for the central government budget and the expenditure areas. This proposal is presented in the form of a committee report. The members of the Riksdag debate and take a decision on this proposal around 20 November. With its decision, the Riksdag determines: the expenditure ceiling for each of the next three years; total expenditure for the next budget year; how much money each expenditure area will receive in the next budget year; changes in taxes and charges in the next budget year; an estimate of central government revenue for the next budget year. There then remains the task of determining the allocation of expenditure within each expenditure area. This is dealt with in the second stage of the budget process. Stage II: Proposals for activities and appropriations In the second stage of the budget process, the various parliamentary committees consider the Government's and opposition parties' proposals as to how the money is to be allocated within each expenditure area. A separate report is compiled for each expenditure area. This is because the Riksdag decides on the size of the appropriations and how the money is to be divided between appropriations in each expenditure area by means of a single decision. An expenditure area cannot, in other words, be split up between a number of committees or be the subject of different decisions. Committees can redistribute money The committees can set different priorities to those presented by the Government and can redistribute money between different appropriations in an expenditure area, but they cannot present any proposals that would lead to ceilings determined in stage I of the budget process being exceeded. If a committee wishes to take an initiative of its own, or act on a private member's motion, the financial effects must be taken into account. Any increases must be financed by an equivalent reduction elsewhere. Members of a committee whose opinion differs from that of the majority cannot submit counter-proposals involving an increase in the expenditure ceilings already determined by the Riksdag. Ready in December A committee may decide that more money is needed in a particular expenditure area, and that the ceiling needs to be increased. The situation may, for example, have changed since the expenditure ceiling was determined. In a situation such as this, the expenditure ceiling can only be increased following a decision by the Riksdag after a proposal from the Committee on Finance. The Committee on Finance can then examine whether an expenditure ceiling should be reduced within another expenditure area. The Committee on Finance and the Riksdag always have to decide how proposed increases in expenditure are to be financed. The parliamentary committees complete their proposals regarding the allocation of money between appropriations in the 27 expenditure areas at the beginning of December. The Chamber of the Riksdag then debates and decides on the proposals during December. Once all the decisions have been taken, the Riksdag compiles the finalised central government budget for the coming year and hands it over to the Government a few days before Christmas.