Government’s budget battle begins
March 7, 2011
Prime Minister Jens Stoltenberg gathered his cabinet ministers on Sunday at a traditional hotel in Jevnaker for the annual conference that kicks off budget negotiations among the various ministries. They all try to put on a happy face, but the budget conference is known as being a tough few days that’s reduced some top politicians to tears.
This year the message is clear: The relatively lavish spending allowed when the global finance crisis began in 2008 will be cut back. “It’s important that we restrain spending to reduce pressure on interest rates and secure jobs in companies vulnerable to tough competition,” Stoltenberg said as the talks began on Sunday.
He claimed once again that Norway came through the finance crisis well. Employment is rising and the jobless rate is low. “At the same time, the government will form a responsible economic policy while we also develop the welfare state further,” Stoltenberg claimed. He cited nursing homes, schools and transportation as the three main areas most likely to get increased resources.
Neither Stoltenberg nor Finance Minister Sigbjørn Johnsen would say where the cuts will need to be made, in order to cut back on state spending.
“We held back on spending during the good times and could therefore increase the use of oil revenues to fight the ill-effects of the finance crisis,” Stoltenberg said. “Now we have growth again … and we must hold back again.”
Stoltenberg’s Labour Party is perhaps most keen on more health care reforms and increased spending on nursing homes. The Center Party and Socialist Left party (SV), which are Labour’s two partners in the government coalition, are stressing transport and education respectively.
Labour wants to hand over more money to the local kommunal governments, which are responsible for providing nursing home care. Labour has promised a nursing home room or assisted living arrangement to all who apply by 2015.
The rural-oriented Center Party is setting the National Transport Plan as its biggest priority, reports newspaper Dagsavisen. It wants more and better roads and railroad service, while SV prefers spending taxpayer money on public transport, so that indicates that tough budget negotiations loom.
Johnsen, the finance minister, warned the total budget will be stramt (tight). He said the state will be prepared, though, for “responsible” pay raises for public sector workers and that there will be room for projects with high priority (like nursing homes, transport and schools).