Sweden’s transition budget ends diesel tax cut and boosts prison funding

Sweden’s transition budget for 2027 will not extend a tax reduction on agricultural diesel, while increasing funding for prisons, SVT reports. Finance Minister Elisabeth Svantesson presented the proposal to parliament on Thursday as government formation continues.

The budget follows a principle that 2026 funding levels should remain in place for 2027. As a result, planned increases by the Tidö parties for several policy areas will not go ahead. The Swedish Police Authority, for example, will not receive the additional 2.9 billion kronor promised last year.

The current reduction in tax on agricultural diesel to the EU minimum will also end. But some programmes that the Tidö parties had planned to cut, including the Climate Leap programme and the return migration grant, will keep their funding.

The Swedish Prison and Probation Service will receive more funding in 2027 because legislative changes made by parliament in 2026 require more prison places. Funding for total defence and infrastructure will also rise as planned, which the budget says reflects broad support among parliamentary parties.

The proposal also allocates four million kronor for Crown Princess Victoria’s 50th birthday celebrations, an exception SVT had previously reported. Svantesson said at the time that many people in Sweden consider the celebration important.

The government’s estimated scope for reforms remains 50 billion kronor over the coming parliamentary term. The transition budget’s spending increases and savings offset each other, leaving that estimate unchanged.

Parties can submit their own budget proposals to parliament until November 27. A newly formed government could present an alternative before then. Parliament is due to vote on the budget on December 9.