Highlights of the proposed state budget

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Norway’s state budget is considered the country’s most important document in terms of steering Norwegian politics and the country’s economy. Its formal presentation by the government in power, just after the ceremonial opening of Parliament, stirs enormous interest and media hype every year, and means a lot for everyone living and working in Norway. This year’s overall budget of NOK 1,275 billion is up 3.8 percent from last year.

Here follow some of the highlights of the budget proposed for 2017 by the current minority conservative government coalition, after weeks of budget leaks and before its future is decided later this autumn:

** With a goal of creating more jobs, and the government is proposing spending NOK 4 billion on measures to battle unemployment. They include a long list of public works projects in local communities to improve infrastructure and buildings. NOK 650 million will be allocated to local governments along with NOK 100 million to repair and improve hospital buildings in Southern and Western Norway. The government is also offering some tax relief for businesses and more money for vocational education. Funding has also been earmarked for research, education, and entrepreneurial programs.

** The transport sector was viewed as the big winner, with a total budget increase of 11.8 percent to NOK 66.8 billion. More money was allocated for improving train service, including another NOK 250 million for renewal of Sørlandsbanen and Jærbanen. NOK 200 million was earmarked to buy up buildings between Lysaker and Ramstadsletta in order to expand the E18 highway west of Oslo. Another NOK 100 million was allocated to prod an earlier start to improvements of the E16 highway over Sollihøgda in Akershus and Buskerud. NOK 50 million was earmarked for planning of a new rail system to Fornebu, west of Oslo.

** The police were offered an extra NOK 300 million to use as they see fit, along with additional funding for 350 new police officers and the purchase of two new police helicopters. More money was also allocated for new patrol cars with extra equipment, along with funding aimed at preventing crime among youth.

** The costs of refugees, asylum seekers and immigrants have soared, with immigration agency UDI offered another NOK 177 million to improve case handling. An extra NOK 105 million was earmarked to fund returns of those not granted asylum in Norway. NOK 485 million was offered to improve funding of integration programs.

** Defense spending was boosted by NOK 1.9 billion, including planning for the largest NATO exercise ever to be held i Norway, called Trident Junction, with 50,000 people due to take part in 2018. The government has already expressed intentions to boost defense spending to NOK 180 billion over the next 20 years.

** Foreign aid funding was due for a boost that will bring it up to 1 percent of gross national product. That’s money especially aimed at satisfying the government’s two support parties, the Christian Democrats and Liberals.

** In other more “pocketbook-related” issues, the government is proposing various income tax adjustments aimed at lowering them. The standard deduction for all income tax payers will rise from NOK 91,450 to NOK 94,750. There will be no increase in the annual “license” tax paid for NRK but taxes on alcoholic beverages and tobacco will rise by around 2 percent. The annual registration fee paid on cars (årsavgiften) will decline, from NOK 3,135 to NOK 2,820, while gasoline tax will rise by NOK 0.15 and NOK 0.35 for diesel. The new airline seat tax will rise from NOK 80 to NOK 82. There will be no major changes in fees for subsidized day care for children. In order to try to limit real estate speculation, property owners will only be able write off 20 percent of the interest they pay on loans for a secondary residence, down from 25 percent. Fortune tax will be frozen, marking the first time since the conservative coalition won government power in 2013 that it has not proposed another reduction. VAT rates will remain the same, at 25 percent for most goods and services and 15 percent for food.

For the government’s own explanation of the budget, in English, click here (external link to the government website).

newsinenglish.no/Nina Berglund