Thursday, September 01, 2016

Suggested Swedish Profit Cap For Welfare Sector Causes Outrage

Via Business Insider:

The debate about profits in the welfare system, such as in schools and in healthcare, has been a contentious one in Sweden.

Recently, the debate was ignited by a report suggesting a cap limiting the profits of welfare businesses to 8 percent. The report is produced for a study currently conducted by the Swedish government which will be presented November 1. The study is expected to suggest a way in which profits from welfare businesses can be reinvested without affecting the number, and nature, of operators.

After details of the report emerged this Tuesday, businesses engaged in the welfare business fell on the stock exchange in Stockholm.

Ilmar Reepalu, former local government commissioner for the Social Democrats, is leading the study.

Attendo, a company specializing in outsourced health care, has lost around 8 percent of its market value, or approximately 60 million dollars.

According to the study, the profits of Swedish welfare businesses exceeding the proposed cap currently amount to 15 billion SEK, or approximately 1.75 billion dollars.

The Confederation of Swedish Enterprise calls the cap an 'unresonable attack on private companies' and on property rights, according to the Swedish newswire TT.

The suggested law is an assault on property rights and does not address problems in the healthcare sector and in schools, said Carola Lemne, the CEO of the confederation to public service broadcaster SVT.

"Without profits, there is no way to build reserves and keep investments up", she said.

Ilmar Reepalu, a former local government commissioner for the Social Democrats, is leading the study. He recently commented on the matter by telling Swedish daily Svenska Dagbladet that the possibility of making profits that are deemed to be 'too large' will be 'shut down'.

He was, however, reluctant on specifying what is 'too large'.

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