June 15, 2017 / 9:42 AM / in 2 years

Swedish opposition seek to block tax hikes as election nears

STOCKHOLM (Reuters) - Sweden’s centre-right opposition parties will try to block tax increases planned by the minority coalition government, flexing their muscles ahead of what is expected to be a tight election next year.

The Moderate, Centre, Liberal and Christian Democrat parties have agreed to demand the government drop plans for an airline tax, changes to tax rules for small companies and a measure to increase the number of people paying state income tax.

If the government does not withdraw the proposal, the Alliance would probably table a vote of no-confidence in Finance Minister Magdalena Andersson later this year.

“We have run out of patience,” the economic spokesman for the Moderates Ulf Kristersson said. “This is a minority government and it is parliament that decides.”

While they were in government between 2006 and 2014, the four centre-right parties slashed taxes by around 140 billion Swedish crowns.

The current centre-left coalition of Social Democrats and Greens, which is supported by the Left Party in parliament, has switched tack to boost welfare and bring state finances back into balance and has said it plans fresh tax hikes from 2018.

Finance Minister Magdalena Andersson said the opposition risked creating “budget chaos” but would not say whether the government would back down.

One complication is that the opposition parties can only block the tax rises with help from the anti-immigration Sweden Democrats but risk alienating some of their own voters by accepting support from the party which has far-right roots.

“It is a bit like a complex chicken race,” said Oscar Sjostedt, a senior Sweden Democrat politician. “It is unclear what the result will be. It depends on how far the Alliance is willing to go.”

Sweden’s stable political landscape has been turned upside down by surging support for the Sweden Democrats, which is now placed second in opinion polls behind the Social Democrats and without which the Alliance has little chance of governing.

The Alliance, which needs to show it could be a viable government after next year’s polls, has been split over what to do, with the Moderates and Christian Democrats more open to cooperation and the Liberals and Centre dead against.

The Alliance and Sweden Democrats voted down the centre-left’s government first budget after elections in 2014 but the Alliance agreed not to use the tactic again, leaving it facing accusations of having abandoned its role as an opposition.

Reporting by Johan Sennero; writing by Simon Johnson; Editing by Niklas Pollard/Keith Weir

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