Flak over Swedish tax reform may down Falldin coalition government

Sweden's three-party non-Socialist coalition government is on the brink of collapse. Frantic efforts are being made to patch up differences, but there seemed little hope of averting a crisis expected to come to a head April 28.

The split in Prime Minister Thorbjorn Falldin's government, which has a majority of one seat in the parliament (Riksdag), came during negotiations on income-tax reform with the opposition Social Democrats, headed by Olof Palme.

Mr. Falldin's Center Party and the Liberals agreed to Mr. Palme's proposals for tax reform in 1983 but these were rejected by the Conservatives -- third partners in the coalition.

Conservative leader Gosta Bohman wants immediate tax reforms and is against a plan to finance income-tax reductions by a taxes on production and employers.

Mr. Bohman said the agreement reached with the Social Democrats was unacceptable and unless he changes his mind before April 28 it is expected that he will lead the Conservatives out of the coalition.

This would mean a collapse of the government in its present form.

If this were to happen, a new election could be held this summer or early autumn. However, a more likely solution would be for a Center-Liberal minority government to carry on with Falldin as premier until a general election already scheduled for 1982.

Falldin's popularity is at an all-time low. A recent public opinion poll showed that only 8 percent of the electorate had confidence in him as leader.

And during a press conference after the tax negotiations, reporters burst into spontaneous laughter at one of the slow-talking sheep farmer's evasive replies to questions about the possibility of a split in the coalition. This went out on a prime time TV newscast so the rest of the nation could get the joke.

The latest opinion poll on the state of the parties puts the opposition Social Democrats a long way ahead with 52.5 percent.

Former Premier Olof Palme left for Geneva to chair a meeting of the United Nations Disarmament Commission after the negotiations and refused speculation on the possibility of a new election.

A cartoon by Poul Stroyer in the leading Stockholm daily newspaper, Dagens Nyheter, sums up the way most Swedes see Palme's role in the crisis. He is shown as the puppeteer pulling the strings to motivate Falldin and Liberal leader Ola Ullsten.

These two leaders have always been eager to reach agreement with the Social Democrats before going ahead with tax reform.

Conservative leader Bohman, on the other hand, has pursued a much more independent line -- closer to the wishes of Swedish industrialists -- in demanding immediate tax reductions.

The Conservatives say that present high taxes take away the incentive to work. Taxation is graded according to salary but reaches a ceiling of 85 percent on any income in excess of Skr. 200,000 ($47,600).

Liberal Leader Ullsten said April 25 that Sweden could not afford a government crisis and described what he called "The Conservative performance" as "illogical and unwise."