Summary - State aid to the industry 2008
This report shows the extent of state aid given to the Swedish industry in 2008. Both the WTO and the EU have special regulations that limit the
scope of national aid and impose demands on openness and on-going reporting of the aid granted. In Sweden state aid is used not only within the industrial policy but also within other policy areas.
The total state aid to the industrial sector was 28.8 billion SEK in 2008 which represented a decrease of 1.4 billion or 4.6 percent. The state aid indeed decreased compared with the year 2007. The greater part of state aid reduction in 2008 is explained by the decrease of aid to the labour market and aid for miscellaneous purposes, which both combined decreased by 29 percent. The aid value for both groups went down from 2.8 billion to 2 billion SEK. Tax exemption for environmental purposes had a value of 19.7 billion in the year of 2007 and in 2008 it decreased to a value of 19.3 billion SEK. In spite of this reduction this aid scheme represented the lion share or 67 percent of the total aid granted to the industrial sector in Sweden. Furthermore, aid to the energy sector rose to a value of 3 billion SEK with an increase of 9.9 percent. The aid increase on energy was due to increases of energy aid in the form of excise duty reduction in favour of carbon dioxide neutral fuels (26 percent), wind power-environmental aid (10.3 percent) as well as aid to R&D in the energy sector (6.6 percent). These results can be interpreted as Sweden to a great extent, has been following the new revised EC-rules for state aid which aims for a better targeted state aid. Among the aid categories other than tax expenditures related to the use of energy, there was a downward trend in aid to R&D with a decrease of 19 percent. Also state aid to SME went down by 56 percent in 2008 compared to the previous year. Aid to other enterprises and sector specific aid went up this year by 5 percent. A large share of this policy measure is carried out via tax reduction. Regional aid decreased by 13 percent. In this category of aid is aid to regional economic development and aid to regional transports important components.
Employment aid had diminished from 825 million to 610 million SEK, equivalent to a decrease by 26 percent in the year 2008. Start-up grants to unemployed amounted to 317 million SEK (456 year 2007). The aid category miscellaneous decreased by 30 percent to a value of 1.1 billion SEK. The latter is partly explained by a decrease of aid for treatment of polluted areas by 51 percent amounting to 237 million SEK. But at the same time, there was an increase in the aid of the National Board of Housing, Building and Planning, for smaller rented dwellings and student accommodation from the amount of 611 to 655 million SEK between 2007 and 2008. However the other aid categories within the group miscellaneous have diminished during this period.
Some selected facts for 2008 compared to revised figures of 2007:
- State aid as a percentage of GDP in current prices has increased considerably between the years 2002 and 2003 going from a level of 0.3 to 1 percent representing a threefold increase in one year. After 2003 state aid as a percentage of GDP became more stable. This year state aid as share of GDP was lower than 1 percent and in correspondence with the EC normal rules of state aid.
- The largest aid program apart from the tax expenditures related to the use of energy, was energy aid with an increase reaching a value of 2.99 billion SEK in 2008 (2.72 billion the previous year).
- Energy aid in the form of excise duty reduction in favour of carbon dioxide neutral fuels amounted to a large part or 2,04 billion SEK (1,62 billion year 2007). This aid policy supports producers and importers of bio fuels (bio ethanol and bio gas).
- Individual Recruitment Incentive, which is under the administration of the National Labour Market Board, amounted to 610 million SEK, a reduction with 26 percent compared to the year 2007 (825 million).
- Start-up grants to unemployed amounted to 317 million SEK (456 million year 2007). This aid is also administered by the National Labour Market Board. Start-up aid grants during 2007 were almost reduced by half compared to 2006 and the year 2008 start-up aid diminished by 30 percent compared to the year 2007.
- Regional transport aid, within the regional aid policy amounted to 565 million SEK in 2008 (312 million SEK in the year 2007). 2 This was a substantial increase of this state aid programme compared with the previous year (81 percent).