The Socialist People’s Party (SF) is projected to become Denmark’s second-largest party if elections were held today, according to recent polls. This raises concerns about their economic policies, especially with Pia Olsen Dyhr’s ambition to become Minister of Finance.
The primary concern stems from SF’s tendency to advocate for increased public spending without supporting responsible financing decisions. Their recent decision against raising the retirement age to 70 by 2040, despite increasing life expectancy, exemplifies this. Maintaining the retirement age at 69 would create an annual deficit of 50 billion kroner, reversing a projected surplus. This move is viewed as economically irresponsible.
SF’s spending proposals, estimated to total at least 65 billion kroner, further compound these concerns. While some proposals, like increased defense spending, are seen as reasonable, others, such as a sixth year of state education grant, equal pay laws favoring female-dominated professions, “free” psychological help for young people, and increased foreign aid, raise questions about fiscal sustainability. The combination of increased spending and reluctance to support financing reforms paints a concerning picture.
Historically, SF has often voted against initiatives promoting economic growth and labor supply. Since 2001, their involvement in reforms has only contributed to about 30,000 full-time positions, a small fraction of the total effect. This track record suggests a resistance to policies that benefit the broader economy.
Furthermore, SF’s focus on tax increases and new taxes, such as war tax, wealth tax, and financial transaction tax, contradicts the need for productivity-driven growth. These measures, projected to generate 55 billion kroner, would disproportionately affect working-class families and pensioners. These tax hikes would significantly outweigh recent tax cuts and potentially undo them.
Critics argue that SF needs to present a comprehensive economic plan outlining how they intend to finance their ambitious spending proposals without destabilizing public finances. The party’s economic policy requires clarity and accountability to ensure responsible governance.