Despite massive criticism during the consultation phase of the Reepalu inquiry, the government has decided to adopt it almost exactly as it is. The government is now proposing a profit cap of 7 per cent on working capital aimed at companies within the education, pre-school and elderly care sectors.
The government states that it will be possible to continue running a company within these sectors with “reasonable returns”.
However, the model is far-reaching, as companies within education and social care generally have low operating capital as they rarely own their properties. A report from PWC, commissioned by the Confederation of Swedish Enterprise, shows that as many as a quarter of the companies have negative operating capital.
The slight adjustment to Reepalu’s proposal is that all companies will be permitted to make a profit of around SEK 45,000 per year regardless of operating capital. Anders Morin, responsible for welfare policy at the Confederation says, “a wise business person will refrain from entering this sector”.
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