Sven Pot

[The Brain]

I mentioned this in the North Korea thread but I think it deserves a thread of its own. Sweden has a new Socialist/Green government (which relies on the Communist party), and in its wisdom it has decided to ban profit in large sectors of the economy. We are talking adults who actually think that profit is bad. Good night Sweden! This fucking country is going to hell. All over again. Kids today don't remember the straight-jacket that was Sweden in the 80s. Enjoy your pain, retards.

http://www.reuters.com/article/2014/10/06/us-sweden-politcs-welfare-idUSKCN0HV11V20141006

Swedish government strikes deal with Left to limit welfare profits


By Johan Sennero and Niklas Pollard

STOCKHOLM  Mon Oct 6, 2014 11:10am EDT

(Reuters) - Sweden's government will limit the profits of private companies providing social services, it said on Monday, after striking a deal with a left-wing party to secure support for its forthcoming budget.

The minority centre-left coalition of Social Democrats and Greens agreed to demands by the Left Party to restrict the profit private firms can make in welfare and education - a key condition to get the non-government party to support the budget bill, which it will present in the coming weeks.

Decades of deregulation have opened up Sweden's healthcare, schools and nursing homes to for-profit private companies, some of them owned by private equity firms. Private industry, which accounts for around 15 percent of the sector, immediately criticised the profit cap plan, saying services would suffer.

Concerns over private involvement in traditionally public sector fields have increased in recent years. The bankruptcy of the largest chain of private schools, private equity-owned JB, led the Social Democrats to pledge to "do away with the gold rush".

"We need to put our welfare sector in order and that is what we aim to make sure happens," Social Democrat Prime Minister Stefan Lofven told a news conference.

Left Party economic spokeswoman Ulla Andersson said the new rules would mean most surpluses generated by private players in welfare would have to be reinvested in the business and profits from sales of such businesses would also be curtailed.

"Some private equity companies will probably get a hiccups today, and so they should. It will no longer be possible to enrich yourself on the Swedish welfare," she said.

Investor AB, the investment arm of Sweden's powerful Wallenberg family and owner of school firm Kunskapsskolan and care provider Aleris, defended the role of private players.


GREAT UNCERTAINTY

"The immediate impact of this is that hundreds of thousands of patients, students, parents, family members and employees now have to live in great uncertainty about what will happen to their school, health clinic or nursing home," Investor CEO Borje Ekholm told Reuters.

"A better solution would be to put quality in focus. The private players often perform better in terms of quality than the alternatives."

The new rules have yet to be defined and will not be in place until 2016 at the earliest, giving private firms more than a year's grace period.

The details to be hammered out include how to ensure adequate staffing levels as well as possible suitability tests for private welfare players.

Of the roughly 600 billion crowns ($84 billion) Sweden spent in 2012 on welfare services, around 15 percent went to private sector providers, according to official figures.

Sweden's Association of Private Care Providers said the decision on profit curbs was founded on "myths and anecdotes" and would have a direct impact on 10,000 small businesses.

"Private care givers will not dare develop their business, and employees with ideas about how to improve the operations will not dare to start their own business," Hakan Tenelius, head of business policy at the association, said in a statement.

Once the proposal is finalised, the government will present a bill to parliament but it will require support from at least one of the centre-right opposition parties to pass, leaving its future far from assured.

Anna Kinberg Batra, economic spokesperson at the Moderate Party which has long championed private players in areas such as welfare, said Lofven's bargain with the Left created "years of uncertainty" for private companies and people relying on them.

[Valmy]

Sounds like they need the right parties to vote for it in order for it to pass

I thought in a Parliamentary system the opposition basically just sits there impotently.

[Liep]

When you say 'large sectors of the economy' you mean the 15% of the welfare budget? And when you say ban profits you mean that the Swedish government would rather that the tax payer money be spent on welfare rather than to make private welfare providers richer?

Or am I missing something?

[Barrister]

Sounds like they need the right parties to vote for it in order for it to pass

I thought in a Parliamentary system the opposition basically just sits there impotently.

Depends if it's a majority or minority government.

I'm with The Brain on this one - look if they want to go after companies for not providing good enough services, or enough value for the money being spent, that's one thing.   But how the hell can you legislate against profit?

[The Brain]

Sounds like they need the right parties to vote for it in order for it to pass

I thought in a Parliamentary system the opposition basically just sits there impotently.

It's a weak government. But they don't need the right parties, they can get the non-aligned Sweden Democrats.

[Liep]

But how the hell can you legislate against profit?

They do it on gambling, too. In that a certain amount has to be paid back to the players and thus effectively limit profits. Here it's just a certain amount of the money has to be used on actual welfare.

[Admiral Yi]

The bankruptcy of the largest chain of private schools, private equity-owned JB, led the Social Democrats to pledge to "do away with the gold rush".

[The Brain]

When you say 'large sectors of the economy' you mean the 15% of the welfare budget? And when you say ban profits you mean that the Swedish government would rather that the tax payer money be spent on welfare rather than to make private welfare providers richer?

Or am I missing something?

It's 600 billion crowns ($84 billion), which is quite a lot in a country like Sweden. I don't really follow the rest you say, do you think that the state shouldn't use private sector suppliers?

[Liep]

It's 600 billion crowns ($84 billion*.15=12.6), which is quite a lot in a country like Sweden. I don't really follow the rest you say, do you think that the state shouldn't use private sector suppliers?

I'm saying that when it does it seems prudent to demand that the money be used on welfare service rather than to aim for more profit.

[Admiral Yi]

I'm saying that when it does it seems prudent to demand that the money be used on welfare service rather than to aim for more profit.

As Beeb pointed out already, shouldn't you care more about the level of services provided for the money spent by the government?

[Liep]

I'm saying that when it does it seems prudent to demand that the money be used on welfare service rather than to aim for more profit.

As Beeb pointed out already, shouldn't you care more about the level of services provided for the money spent by the government?

Sure, and I'm sure they already do. But if a welfare provider lives up to that and still comes out with a profit, isn't it waste of taxpayer money to next year pay the same when it can be done cheaper?

[Admiral Yi]

Sure, and I'm sure they already do. But if a welfare provider lives up to that and still comes out with a profit, isn't it waste of taxpayer money to next year pay the same when it can be done cheaper?

But we can't know it can be done cheaper.  And there are reasons to believe it can't.

[Jacob]

I'm saying that when it does it seems prudent to demand that the money be used on welfare service rather than to aim for more profit.

As Beeb pointed out already, shouldn't you care more about the level of services provided for the money spent by the government?

Yeah... and with the bankruptcies of the private entities, it seems they're convinced that the level of service is going to be higher if the government handles it; in part because lacking a drive for profit leads to more resources going to provide the actual services.

[Barrister]

I'm saying that when it does it seems prudent to demand that the money be used on welfare service rather than to aim for more profit.

As Beeb pointed out already, shouldn't you care more about the level of services provided for the money spent by the government?

Sure, and I'm sure they already do. But if a welfare provider lives up to that and still comes out with a profit, isn't it waste of taxpayer money to next year pay the same when it can be done cheaper?

But apparently it can't be done for cheaper.  Government itself wasn't able to provide that service at that price (or if they could why would they ever have privatized it?).

[Jacob]

But we can't know it can be done cheaper.  And there are reasons to believe it can't.

That's a fairly ideological position, and the Swedish government and its voters takes a different ideological position.