Norway’s two government coalition parties and their two support parties are huddling once again in an effort to agree on a new state budget for next year, but fees and especially proposed taxes on fuel and financial services are gumming up the works. They’re also arguing over how “green” the budget needs to be.
Budget negotiations were also officially beginning in the Parliament on Wednesday. Both of the government’s small support parties, the Liberals and the Christian Democrats, presented their alternative state budget proposals this week. Neither is willing to go along with the government’s plan for just a slight increase in fuel taxes or to impose a tax on financial services, which currently are exempt from Norway’s 25 percent VAT.
The government has proposed slapping employers in the finance sector with an extra payroll tax of 5 percent. The government also wants to maintain finance firms’ corporate tax at 25 percent, instead of reducing it to 24 percent.
The Liberals and the Christian Democrats agree that the finance sector should be taxed more heavily than it is now, but want to scrap the proposed 5 percent payroll tax and increase the corporate tax by 3.5 percentage points. They’re responding to complaints from banks and other financial services firms in outlying areas that think the government’s extra 5 percent tax on payroll will disproportionately hurt them and boost outsourcing of jobs.
Mood was ‘good’
Negotiations among the four parties that can assure a majority in Parliament otherwise resumed last week, even before the two support parties laid out their alternatives, and all four claimed the mood was good around the table. They agreed to disagree over the government’s budget proposal but Prime Minister Erna Solberg of the Conservatives was characteristically optimistic. “We have quite a few things to work out, but I think the mood was good,” Solberg told news bureau NTB after the parties had met for scheduled talks. Those “few things” also include everything from how many more refugees Norway should take in, how child care, road improvements and the military should be financed, for starters.
Finance Minister Siv Jensen of the Progress Party was also optimistic, though: “We have drafted the time we have ahead of us (to negotiate a budget), but we have not drafted individual elements in the state budget,” Jensen told NTB. Liberals leader Trine Skei Grande has already claimed that the budget negotiations will test whether the four-party government cooperation can continue.
She’s been the most outspoken about demanding a much “greener” and climate-friendly budget than the government presented. The Christian Democrats also intend to fight hard for some of their pet projects, and surprisingly called for raising the amount of money parents receive for staying home with their children instead of putting them in day care centers (kontantstøtte) by 50 percent.
Likely to stick together
There also are clashes over the defense budget but commentators expect they’ll come to terms so the government won’t fall just a year ahead of national elections next September. Trine Eilertsen, political editor at newspaper Aftenposten, wrote on Tuesday that no one wants to topple the government now. Neither of the two support parties are scaring Solberg, and the Liberals generally stick with a non-socialist government.
Not even Labour Party leader Jonas Gahr Støre seems keen to take over as prime minister now, without a clear majority in Parliament. Both Aftenposten and Dagsavisen reported that Labour Party strategists think it would even be “destructive” for Labour to assume government power, and prefer to hope that voters will usher in a more Labour-friendly Members of Parliament next fall.