High expectations for the budget that will take Norway out of the crisis

The Norwegian government has promised a return to everyday life next year. On Wednesday, the budget that is supposed to show how will be presented.

In May, Minister of Finance Jan Tore Sanner (H) presented a historic crisis budget with a revised national budget.

This week, the government will present the budget that will hopefully take the country out of the crisis – the proposed state budget for next year.

“In the period we are now entering, the government’s goal is for us to return to everyday life. The government will take new initiatives to bring Norway safely out of the crisis,” the government announced on Friday.

25 billion for corona measures

So far, the government has released leaks from the budget of more than NOK 63 billion kroner.

Among other things, the government will spend NOK 25 billion on various corona measures next year.

However, the government has emphasized that the amount will be adjusted if necessary.

So far this year, the government has spent NOK 126.3 billion on corona measures.

Among the other largest budget leaks, there are NOK 32.1 billion for railways and NOK 2 billion for the government’s prestige-project for carbon capture and storage at Norcem in Breivik.

More permanent positions in the police, cheaper after school programs (SFO) for low-income families and more for leisure cards (fritidskort) for children are also among the initiatives.

Expect tax cuts

One of the tensions in the budget proposal is the wealth tax.

At Høyre’s national convention earlier this autumn, it was decided to remove the wealth tax completely.

However, Prime Minister Erna Solberg (H) moved quickly and said that it would not happen until there are methods to avoid creating new zero taxpayers.

At the Confederation of Norwegian Enterprise (NHO), expectations are high that there will be a significant cut in the wealth tax on the so-called working capital in the state budget.

“If companies are to get through the crisis, they need the money in the companies,” NHO manager Ole Erik Almlid told news bureau NTB.

Decisive year

The Labor Party’s (AP) deputy leader Hadia Tajik points out that the right-wing government has cut a total of NOK 27 billion in taxes during its seven years in power.

“This has not created more jobs,” she said to NTB.

“Now it’s about spending the money right. We will monitor to ensure that the money is spent on jobs and ordinary people, not increased wealth and rich people, when the right-wing government presents its budget,” Tajik said.

Progress Party twists the knife

With the Progress Party (FRP) on the outside, this year the government will have a far tougher job of getting the budget through the Norwegian parliament (Storting) than before.

Several of the demands the party has set to support the budget twist the knife where it hurts the most for the Christian Democrats (KRF) and the Liberals (V), such as cuts in the development assistance budget and setting the number of quota refugees that will be taken in to a minimum.

In addition, FRP has announced its opposition to the government’s most important climate project, the Norcem project for carbon capture and storage, because they believe taxpayers pay too much of the bill.

Both NHO and The Norwegian Confederation of Trade Unions (LO) have reacted strongly to the fact that FRP would not support the proposal.

Norwegian industrial jobs are once again a football in a political game in budget negotiations, LO leader Hans-Christian Gabrielsen warned on Monday.

The Socialist Left (SV) has called on the government to take the matter out of the budget negotiations in order to find an alternative majority in the parliament without FRP.

Lubricated with oil

In the crisis budget in May, the government proposed spending a staggering NOK 420 billion from the Oil Fund.

That is NOK 176 billion more than in the original state budget for 2020 and NOK 174.4 billion more than last year.

Minister of Finance Jan Tore Sanner (H) has signaled that he will use what is necessary next year as well but has emphasized that the use of oil money will be scaled down as growth picks up.

There is tension related to the government’s updated estimates for value creation, unemployment, price, and wage growth for next year, which will be presented at the same time as the budget.

The use of oil money will be closely linked to these forecasts.

© NTB Scanpix / #Norway Today