Budget cuts may not be so big
March 18, 2010
The government ministers’ dreaded annual budget conference doesn’t appear to have been as bad as expected. Coaxed and cheered by a singing, poetry-reading Finance Minister Sigbjørn Johnsen, and by numbers showing higher employment and tax revenues, the ministers reportedly can avoid drastic cuts in their next state budget proposal.
Newspaper Dagens Næringsliv (DN) reported that Johnsen, casually dressed in blue jeans and a ski sweater, resorted to songs and poetry to calm the nerves of government ministers assembled for this year’s budget battle at the Thorbjørnrud Hotel in Jevnaker. He recited a poem about the Norwegian moose by Hans Børli, and then sang a folksong by Vidar Sandbeck, about how much easier it is to simply stay in bed than work.
“We thought this budget conference would be pure hell,” one unnamed participant told DN. “Instead there was a lot of laughter.”
Government ministers also remembered to celebrate Prime Minister Jens Stoltenberg’s 51st birthday on Tuesday (“He got candy and a birthday song,” said Education Minister Kristin Halvorsen) and Johnsen said his poetry and singing were meant to lighten up an otherwise serious meeting that’s anything but fun.
“I use poetry in various situations,” Johnsen told DN. “It helps create a good mood, and provoke thought.”
Johnsen’s hard, cold numbers helped as well. After months of warnings that the next state budget would need to be cut instead of expanded, the finance minister could report that economic indicators were more positive than expected. Employment is rising and that’s providing more tax revenues for state coffers. Returns form the state’s gigantic oil fund are also up, as are returns from state investments in companies like Yara, DnB NOR and Telenor.
Expenses, meanwhile, may not be as high as feared. There’s been a clear effort to reduce sick leave costs, while the stream of asylum seekers into Norway has dropped considerably, meaning those costs won’t be as high as expected.
The state can thus reduce its use of oil revenues without having to make major cuts in popular areas, a scenario that has cost Stoltenberg’s Labour Party lots of support recently. Newspaper Aftenposten reported that some areas will get less money but others more, so that all told, the budget will mostly reflect the status quo.
There may even be be more money made available for the schools, a priority area. No major cuts are expected in the health care sector, but there’s likely to be cuts in foreign aid and transport. The government’s next state budget won’t be revealed in detail until October.