The government want to abolish the idea of lowering pay-roll taxes for people below 26 years of age. This will result in big economic problems for both Nations and Student Unions.
Ever since 2007, it has been possible to hire people younger than 26 years of age with a reduced pay-roll tax, with the goal to decrease youth unemployment. But the new Swedish government do not think that the reduced tax has had any effect. Therefore, in the red-green budget proposal, there is a suggestion of abolishing the advantage for young people, meaning that the pay-roll tax will double, from 15,46 to 31,42 percent of the salary.
This is a suggestion that would bring about many challenges for student organisations throughout the country, where most full-time workers are younger than 26 years of age.
The Swedish National Union of Students keeps their eyes peeled
“Of course, there will be consequences for the Student Unions of the country,” vice-chairman of the Swedish National Union of Students, SFS, Johan Alvfors says.
To get a clearer picture of what the situation is in relation to the member Unions, SFS will, as part of a bigger investigation, bring up the question of what economic consequences such a suggestion would bring in its wake.
“We plan to send our preliminary enquiry to Sweden’s Ministry of Education and Research, to get them to appoint a governmental inquiry about the situation of the Student Unions. We tried to do so with the former government as well, but it was declined,” Johan Alvfors says.
Photo: Jens Hunt.
A hard blow against the Nations in Lund
Sebastian Andersson, curator at Wermlands Nation, says that the Nation is in the progress of investigating what an increase in the pay-roll tax could mean. The curator of Lunds Nation, Ida Moen Larsson says the Nation bide its time for now, but that the question will be discussed in Studentlund and that a common discussion will be held about how the Nations will cope with a possible raise of the tax.
“Studentlund will also get in touch with the Swedish National Union of Students and ask what they could possibly do,” Ida Moen Larsson says.
At Kristianstads Nation (Krischan), Madeleine Forsberg, the curator, says that the Nation has already started preparing for a probable tax-increase.
“We have calculated how much our fees will increase. The suggestion is, of course, very unfortunate for every Nation,” she says.
Earlier this semester, Kristianstads Nation had already taken a decision to decrease the number of full-time salaried curators from three to two. The decision will be implemented at the start of next semester.
At Helsingkrona Nation, curator Niklas Lundberg is worried because the tax-raise would result in that money that would have been used for other things will have to be used for payment of salaries. At the same time, he says that the Nation has the prerequisites to cope with a tax-increase.
“If there will be an increase in the tax, we will certainly adjust our budget accordingly, but if we maintain the good economy we have today, we will, most likely, be able to cope with the increase.”
The Student Unions are critical
Today, the Student Union at LTH has ten full-time salaried officials, all younger than 26 years of age. The Union calculate that the increase in pay-roll tax would imply an increase in expenses of 260,000 SEK per year.
“Of course, this means that we will have to review our organisation. But if we re-prioritise the enterprise, it will still be possible to retain all full-time positions,” Sara Gunnarsson, the chairperson of the Union says.
The chairperson of the Social Sciences Student Union, Linnea Jacobsson, says that they have yet to discuss the increase in a tangible way, but that it, in principal, will result in a retrogression to the conditions that were valid until the decrease in pay-roll tax in 2007.
“But when we prepare our budget, we still have always planned to be able to have full-time employees who all are over 26 years of age,” she says.
At LundaEkonomerna, they are worried about the challenges that would follow if the tax were to be increased.
“Hopefully, the decision-makers understand what kind of big economic consequences the decision would have when it comes to student organisations,” the chairperson, Lisa Fjellström says.
LundaEkonomerna will retain their five full-time employees during the coming year as well. If the government’s proposal becomes reality in 2016, they will have to sit down and do the math.
“It will, of course, be problematic,” Lisa Fjellström says.
Text: Axel Vikström
Translation: Richard Helander
