Story highlights

Sweden plans to cut value added tax on repairs from 25% to 12%

Measures could provide labor opportunities for refugees, says minister

CNN  — 

What’s cheaper: repairing your shoes or buying new ones?

With the cost of hand labor versus mass-produced fashion, often it’s the latter.

Sweden is hoping to change this with plans to grant tax breaks for repairs to footwear, clothes, leather goods, household textiles and bicycles – giving people a financial incentive to make do and mend.

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The value added tax (VAT) on getting these items fixed will be slashed from 25% to 12%, according to the plan, which was presented Tuesday to the Parliament in the government’s new budget.

Economic incentive

A second proposal will allow Swedes to claim back from their income tax up to half of the labor costs of fixing home appliances – such as washing machines, fridges and stoves.

It won’t come cheap, with the government estimating the plans will cost them $86.4 million (SEK 740m) in tax revenue.

The minister for financial markets and consumer affairs, Per Bolund, says the measures meet a growing desire in Swedish society to consume more sustainably, as well as a broader government strategy to reduce the carbon emissions from consumerism.

“It’s obvious that consumers want to make a difference,” he told CNN. “Sales of organic food increase around 40% each year, and also of fair trade products. What they say to us is that they find it difficult – they’d like to have an economic incentive.”

Cost of consumption

Sweden is considered a world leader in tackling climate change, with renewable energy policies that have reduced its greenhouse gas emissions by 23% since 1990.

However, when taking into account the consumption of imported goods, the country’s overall carbon footprint is 17% bigger than the government projects, according to the charity WWF.

It’s a problem that Bolund acknowledges. In 2015, the government recovered more than 58,000 tonnes of dumped refrigerators, freezers and electronic appliances – equivalent to about 6 kilograms per inhabitant.

Opposition parties will now present alternative budgets before a vote in December – if successful, the new measures will come into effect on January 1.

Sustainable trends

Bolund, one of six Green party cabinet members in Sweden’s ruling Social Democrat and Green coalition, says the proposals have received widespread support – even within the country’s esteemed fashion industry.

Large Swedish chains are “working hard on decreasing their environmental impact,” with stores such as H&M recycling bags of old clothing and giving customers discounts in return.

He believes the measures are aligned with trends like the so-called maker community – a revival in DIY culture – and the sharing economy – the ability to borrow or rent other people’s assets, facilitated by apps such as Airbnb or Sweden’s Swinga Bazaar.

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“It’s increasing at a tremendous rate in Sweden, both from the public side and the private side,” said Bolund. “It’s also seen as a way to decrease the economic difference between families.”

The government also hopes that by stimulating the repair industry, the new measure could provide a welcome route into the labor market for refugees with this skill set.

“Many people who come to Sweden have had experience or businesses in their home countries repairing white goods or other appliances. The Swedish labor market is quite short of jobs that do not require a high academic education, but these ones could expand quite rapidly,” said Bolund.

‘Harmful’ chemicals taxed

While the tax breaks seem like a win-win solution, a third proposal in the budget is more controversial.

The government wants manufacturers to reduce chemicals in electronics products they say are harmful to humans, such as brominated flame retardants found in the plastic casing of mobile phones.

One variety of the substance, PentaBDE, poses a risk of “serious harm to health in exposure through skin contact and ingestion,” according to Swedish chemicals agency KEMI – but it’s banned over a particular concentration within the EU. Another, vinyl bromide, has been classified as carcinogenic.

If companies don’t decrease the chemicals, a fee of $2.34 (20 SEK) will be applied to smaller items such as mobile phones and up to $23.36 (200 SEK) for larger objects like televisions.

The plans have been met with strong objections from electronics companies, who believe they are unsafe and will harm the Swedish manufacturing industry.

“The flame retardants are an integral part in the materials they protect,” said industry body Digital Europe in a statement.

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“Neither KEMI nor the investigator has provided any scientific references to support their emission concerns. In fact, exposure to certain flame retardants is extremely low, hardly detectable for new products and according to the studies … does not pose a risk to the user, adults or children.”

Bolund is confident the measures will pass.