The caretaker government presented a transition budget, put together in consultation with the opposition Alliance and the Left Party. This was done in order to keep the proposal as politically neutral as possible, because caretaker governments are not meant to make partisan decisions.

But opposition parties are still allowed to put forward their own budget proposals, and it was the suggestion of Alliance parties Moderates and the Christian Democrats that won the most votes.

This was possible after the Sweden Democrats, a far-right party and the third largest group in parliament, voted for the opposition budget.

The other two parties of the Alliance group, the Centre Party and Liberals, each put forward their own budgets and did not vote for any of the other suggestions. The defeat came as a blow for centre-left Social Democrat leader Stefan Löfven, who faces — and is expected to lose — a parliamentary vote on Friday as to whether he will be accepted as Sweden's next prime minister.

The Moderate-Christian Democrat budget includes changes to income tax, such as raising the rate for one tax threshold from a monthly salary of 40,000 kronor to 42,000.

A tax on flights, introduced by the previous centre-left government for environmental reasons last year, would also be abolished in the new budget.

Sweden does not yet have a government, two months after the election, so whatever shape the next government takes, this is the budget they will have to work with.

Some changes can be made in the spring budget, and in certain special circumstances it's possible to ask parliament for adjustments as early as January, but there are several areas including income tax rates where changes can't be made more than once a year.

TIMELINE: Everything that's happened in Swedish politics since the elections