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Sunday, July 14, 2024

Breakthrough as budget talks end

Norway’s new conservative government won the budget backing it needed on Friday from its two centrist “support parties” in Parliament. After a week of negotiations, the Liberal and Christian Democrats’ parties promised to vote for the government’s proposed state budget in return for winning changes including more money for trains and foreign aid.

The Norwegian Parliament (Stortinget) was under heavy armed Wednesday morning, with all surrounding streets cordoned off, after a man threatened to blow up the building. PHOTO:
Members of the Norwegian Parliament (Stortinget) will vote on the state budget after more debate, but the compromise worked out Friday means the new conservative government’s proposals are likely to go through. PHOTO:

The breakthrough means that a modified version of the budget proposed by the Conservative-Progress Party coalition last Friday now looks likely to clear the Parliament.  The government parties don’t have a majority of seats, so need support from other parties in opposition.

In this case, they got it by agreeing to shift around NOK 2.2 billion, a relatively tiny percentage of the nearly NOK 1,100 billion budget as a whole. The government won’t be using any more money, even though they could have found more in the country’s fund where its oil revenues are stored. Instead, the four parties agreed to use they funds they’d already allocated in a different way.

Trains ‘the big winner’
Among the biggest changes was an extra NOK 650 million for the state railroad, with much of it aimed to address huge maintenance and expansion needs in the Oslo area. Some called the train system “the big winner,” after the Liberal Party (Venstre) succeeded in extracting more funding to keep it on a roll.

The additional funds for state railroad Jernbaneverket and state railway NSB come at the expense, though, of such projects like tunnel maintenance in Norway, which will get NOK 250 million less), and higher fees on electricity (NOK 275 million).

Foreign aid cuts restored
The Christian Democrats and the Liberals pushed through an additional NOK 281 million in funding for foreign aid, to bring it up to 1 percent of the entire state budget. The Christian Democrats also won an increase in what’s called kontantstøtte, literally the cash support that parents who don’t send their children to state-subsidized day care centers get if one of them stays home to care for them. It will now rise from NOK 5,000 to NOK 6,000 a month, at a total estimated taxpayer expense of NOK 199 million. The government figures the state will save money through less need for day care funding in return.

The budget compromise also led the government to retain the state’s so-called Skatteklasse 2, which gives a tax break for married couples when only one spouse is out in the workforce. The former left-center government eliminated it in its own state budget, to encourage greater participation in the workforce, and the Conservative-Progress coalition had let that stand, only to bring it back in its budget compromise.

Inherited framework
State budget details were still emerging on Friday, with other cuts being made in personnel costs at the ministries and the parliament, and more money expected from dividends in state holdings of stocklisted companies. Debate over the budget will now return to the parliament before it’s voted on later this fall.

The framework of this year’s budget was largely inherited from the former left-center government that lost the September election. Next year’s budget proposal for 2015 is expected to show more signs of policy changes under the new conservative coalition government. Berglund



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