Although the coalition government has a majority in parliament, it is regular practice for draft budgets, which are presented in August, to be negotiated with opposition parties to gain broader parliamentary backing.
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This year’s budget has been finalised relatively early, with more than one opposition party and longer periods of negotiation often involved in securing an agreement.
An earlier conclusion of the budget process was favoured this year because of upcoming local and regional elections on November 18th.
Elements of the budget agreed with the Conservatives include an increase in the tax deduction for employment (beskæftigelsesfradraget) for working seniors and a postponement of higher car taxes.
“In a time of global uncertainty, we’ve been able to make decisions from different political positions that will benefit Danes in their everyday lives and strengthen their welfare,” Finance Minister Nicolai Wammen told media.
A notable aspect of a deal being struck with the Conservatives is it means the centre-right party has broken from a right wing alliance formed last year with the libertarian Liberal Alliance and far-right Danish People’s Party and Denmark Democrats.
The four parties previously pledged a united front in negotiations with the overarching goal of ousting the centrist coalition government in the next election. That alliance appears to have been weakened by the Conservative decision to go into the budget deal alone.
The government and the Conservative Party have agreed to raise the tax deduction for employment (beskæftigelsesfradraget) for working seniors, with the aim of encouraging older people to stay in the workforce longer.
The tax credit applies two years before the state pension age under current rules. This will be moved forward to five years by the agreement.
The parties have also agreed to postpone the planned introduction of taxes on electric cars, which were due to take effect in 2026. The delay of one year will cost the state 1.3 billion kroner.
Conservative Party leader Mona Juul said she was “very pleased” with those elements of the deal as well as a pledge to spend a billion kroner on climate protection, in comments to media on Thursday.
“It shows we’re a conservative voice that delivers results. Keeping electric cars affordable is crucial if we want people to continue supporting the green transition,” Juul said.
The deal has already drawn criticism from the left-wing opposition, with the centre-left party SF saying it was “a shame” that the government had chosen the Conservatives as sole partners in the budget.
“It’s a shame that the government once again appears to have chosen unequal tax cuts when it could instead have secured better welfare by working with us,” SF political spokesperson Signe Munk told Ritzau in a written comment.
The budget agreement last year was made between the government and SF along with fellow centre-left party the Social Liberals, with right-wing parties absent amid their pledge to only agree to it as a bloc. In 2023, all 11 parties in parliament at the time backed the final budget.
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