Norway’s left-center coalition proposed a revised state budget on Tuesday that cuts use of oil revenues by around NOK 17 billion. Some areas, though, will still get extra funding, like the long-neglected railroad system.
Finance Minister Sigbjørn Johnsen of the Labour Party said that Norway’s economy was expected to grow by about 2 percent in 2010, while the situation was “dramatic” elsewhere in Europe. That can have a negative effect on Norway, since Europe is Norway’s major market for most goods and services.
The recent turmoil in Greece, Johnsen noted, shows “how important it is to maintain order in state finances.” His government thus is proposing spending plans that only moderately exceed the limits normally put on use of Norway’s oil revenues.
When the global finance crisis hit at the end of 2008, the government decided to spend more of Norway’s oil money than normally allowed, in the form of stimulus packages. Now Johnsen says the government expects to spend NOK 131.5 billion of its oil money in 2010, about NOK 26 billion more than the spending rules (handlingsregelen) allow.
The government has cut its funding for a carbon recapture plant at Statoil’s Mongstad facility by NOK 122 million, because of delays. Other spending cuts were proposed for vaccines that are no longer needed, and a long list of “adjustments” to programs from foreign aid to day care centers and pensions.
The government is still willing to boost spending for maintenance of the railroad (by NOK 274 million) and roads (by NOK 259 million) and is allocating millions to aid troubled shipyards and job creation.
For the government’s own revised budget report, click here. (external link)