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Thursday, February 22, 2024

Shopping bag tax sets off new row

NEWS ANALYSIS: A new tax on shopping bags in Norway suddenly crept into last week’s difficult state budget negotiations, and it has since kicked up nearly as much of a fuss as the budget itself. None of the politicians involved will accept blame or credit for the tax, which takes effect next spring.

Coop was cooking up something extra indeed this week, with Rema 1000. PHOTO: Coop Norge
Grocery store chains like Coop have charged for their plastic bags for years. It remains unclear how they’ll handle the new tax they’ve also been ordered to collect. PHOTO: Coop Norge

The debate was turning comical this week, with local media poking fun and puns at the politicians as they drew parallels to a classic Norwegian film comedy from 1940 called Tante Pose. “Pose” is the Norwegian word for a bag and “tante” is an aunt, with “Tante Pose” playing a cranky old aunt who arrives for an unwelcome visit and disrupts a family’s Christmas holidays.

In the debate over the new shopping bag tax, which will force all retailers to charge NOK 1.50 on top of what retailers may already charge for a bag, neither Finance Minister Siv Jensen of the Progress Party nor the leader of the Liberal Party, Trine Skei Grande, will take on the role of “Tante Pose.” They’re accusing each other of suddenly bringing up the tax last week as a means of unsnarling badly tangled budget negotiations.

Newspaper Aftenposten and several online news services started calling the tax Jensen-posen as soon as the budget was finally in the bag, so to speak. Other media outlets also implied that it was Jensen who proposed the bag tax to compensate for her refusal to approve the higher fuel taxes that Grande’s Liberal Party wanted for environmental reasons. The bag tax, especially aimed at plastic bags, is viewed as a means of reducing their consumption and use, also something that’s supposed to be good for the environment.

Jensen immediately objected to the Jensen-posen label, however, saying the tax already was called Trine-posen, and stoutly denying the tax was her idea. Jensen’s party has a long history of despising and fighting any new forms of taxes, or tax hikes, while the Liberals had themselves proposed implemention of a tax on plastic bags in their own state budget proposal.

Trine Skei Grande, leader of the Liberal Party (Venstre) denies she proposed the new tax on plastic bags during budget negotiations, claiming it was Finance Minister Siv Jensen's idea. PHOTO: Venstre
Trine Skei Grande, leader of the Liberal Party (Venstre) denies she proposed the new tax on plastic bags during budget negotiations, claiming it was Finance Minister Siv Jensen’s idea. PHOTO: Venstre

Grande herself insisted on NRK’s nightly national newscast Dagsrevyen that Jensen proposed the tax during the final rounds of budget negotiations, prompting Jensen’s outspoken party colleague Per Sandberg to brand Grande’s claim as “a lie.” Both the Liberals and the Christian Democrats, the two so-called government support parties that negotiated the budget with the two government coalition parties, maintained that they never demanded a tax on shopping bags during the negotiations. They had simply proposed such a tax in their own alternative state budget proposals.

In the end, the tax went through and is due to take effect on March 15. Many questions remain, however, over how it will be implemented, especially in Oslo, where the city government currently gives away green and blue plastic bags for free to encourage residents to sort their garbage (green for food remains and blue for discarded plastic item).

Not true, retorted both Per Sandberg and Siv Jensen of the Progress Party. PHOTO: Fremskrittspartiet
Not true, retorted both Per Sandberg and Siv Jensen of the Progress Party. PHOTO: Fremskrittspartiet

Most grocery stores already charge around NOK 1 for plastic bags, and they’ve earned well on them over the years. Now, however, when ordered to charge another NOK 1.50 in tax, it’s unclear whether they’ll simply start charging a total of NOK 2.50 per bag when the tax takes effect. That’s because consumers may actually resist paying so much, cutting into the retailers’ lucrative bag business. In Oslo, creative consumers could simply start using their free green and blue garbage bags as shopping bags.

Aftenposten reported on Tuesday that plastic bags only cost retailers around NOK 0.25 (25 øre) and also provide them with lots of free marketing and promotion, since the bags are emblazoned with their stores’ names and logos. Consumers effectively have been paying for years to be walking advertisements for the stores that charge for them, and may finally object if the price goes up. The retailers may end up lowering their own bag fees to relieve the sting for consumers, and simply try to make up for it by raising other prices.

It’s also unclear what retailers who have never charged for shopping bags will do now. Clothing stores, pharmacies and a host of other retailers don’t charge but now will need to at least pay a tax on them to the state. Retailers’ association Virke, which opposes the tax, is demanding more details from the finance ministry, calling the entire issue “very complicated.”

One thing is clear: No matter which politician put the tax on the table during last week’s budget negotiations, all four parties involved (the Progress Party, the Conservative Party, the Liberals and the Christian Democrats) agreed to it. Jensen stands to face the most complaints from her own voters just for going along with it. But as commentator Kjetil B Alstadheim in newspaper Dagens Næringsliv (DN) noted on Tuesday, perhaps it’s a good sign that the loudest debate after Norway’s state budget finally was settled erupted over something like plastic bags. Norway doesn’t seem to have any bigger problems. Berglund



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