The Danish government has now presented its full proposal for the 2027 budget.
The proposal was unveiled at a press conference on Friday morning, with all four governing parties represented.
The Social Democrats (Socialdemokratiet) were represented by Minister of Finance Peter Hummelgaard. The Green Left (Socialistisk Folkeparti) was represented by its leader, the Minister for Economic Affairs and the Interior.
The Moderates (Moderaterne) were represented by Minister for Taxation and Growth Jakob Engel-Schmidt, and the Social Liberals (Radikale Venstre) by party leader and Minister for Business and Competitiveness Martin Lidegaard.
Some elements of the budget had already been announced by the government last week. Others were leaked to DR on Thursday evening.
This article runs through the main points.
What we already knew
Last week, the government said it planned to lower the registration-tax threshold for electric vehicles to 366,000 kroner, down from 419,000.
It also said it would cap the tax deduction for mortgage interest at 150,000 kroner.
In addition, it announced an extra 22 billion kroner for defence in 2027, rising to 40 billion kroner by 2030.
Most controversially, it said it would abolish student grants (SU) for students living at home whose parents earn 710,000 kroner or more.
More on the student grants
On Thursday evening, DR reported that the government had not been fully open about the scale of the SU cuts.
It will also reduce SU for students living at home whose parents earn more than 420,000 kroner a year.
SU for students living at home will therefore become a tiered system, with different rates depending on parental income.
Pension increases
One of the larger items in the proposal is higher pension payments under several schemes.
The 150,000 state pensioners on the lowest incomes will receive an extra 1,600 kroner a month.
Recipients of the Arne pension (the early-retirement scheme introduced in 2022) will get an increase of 3,095 kroner a month.
The criteria for the senior pension (for people with reduced working capacity) will be tightened. Those who can retrain for less demanding work will be expected to do so rather than qualify for the scheme.
Tax changes
The budget also includes broader changes to the tax system, for both companies and individuals.
Corporation tax will be cut by three percentage points from 2030, lowering the rate from 22% to 19%.
The income-tax system will be substantially reformed. There are currently four rates: bottom, middle, top, and top-top. These will be reduced to two: a bottom rate and a top rate.
The middle rate and the top-top rate will therefore be abolished. The threshold between the two remaining rates is set to be 777,900 kroner.
The ‘aktiesparrekonto’ (the stock sharing account) sees the deposit ceiling raised from 174,200 kroner to 500,000 kroner. This being an account with a low return tax rate.
Other spending
The proposal also contains a number of smaller spending measures.
These include an extra one billion kroner for “societal resilience and emergency preparedness,” and more than 750 million kroner a year to strengthen the police and the Security and Intelligence Service.
The government has also proposed 1.2 billion kroner for a scheme, much discussed since it took office, to improve the 100 worst-performing schools in the country.
It is setting aside 800 million kroner to begin work on free public transport for under-22s, one of the main promises of the current government.
Finally, 118 million kroner will go to an emergency plan for animal welfare, aimed at tighter oversight and regulation in the sector, particularly the pork industry.
Nothing is settled
The government is a minority coalition and will need support from other parties to pass the budget in the Folketing.
It is customary for a new minority government to secure a majority for its first budget with its confidence-and-supply partners: in this case the Red-Green Alliance (Enhedslisten) and the Alternative (Alternativet).
Both parties have been strongly critical of the SU cuts.
Although it would be unconventional, and could look poorly for a new government, it could also seek support to its right, from parties such as Venstre and the Conservative People’s Party (Det Konservative Folkeparti).
As formal negotiations begin, it is entirely possible that some of the proposals above will be amended or dropped.