Solberg warns of tighter budgets

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Prime Minister Erna Solberg was meeting with her ministers behind closed doors on Wednesday and Thursday, to put the final touches on their state budget for next year. Each minister will have less oil money to work with next year, since the days of expansive budgets are over.

at the budget conference at Hurdal

Prime Minister Erna Solberg launched state budget talks last winter and needs to conclude them this week. She’s shown here with the coalition government’s two other party leaders Siv Jensen of the Progress Party (left) and Trine Skei Grande of the Liberal Party. Jensen who serves as finance minister, will present the state budget a week after Parliament reconvenes in early October. PHOTO: Forsvaret/Torbjørn Kjosvold

Solberg claimed this week that when the economy is doing well, the public sector must rein in spending. That means strict budget discipline, even though 2019 will be an election year at the local government level, with politicians keen to have more funding to offer voters.

“The Norwegian economy won’t tolerate an expansive budget at the moment,” Solberg told news bureau NTB. “We have had them when there was low growth in the private sector, but now there’s high growth. Then it’s necessary to have less growth in the public budgets.”

Solberg called in her ministers for the last budget conference of the year, with will determine the outcome of the state budget itself that will be presented in Parliament by Finance Minister Siv Jensen in October. Each minister traditionally arrives with long lists of arguably worthy projects, but Solberg said they need to be prepared for disappointment.

She said she expected a good deal of rivalry among the ministers, with each wanting the most money for their own areas, but Solberg claimed her Conservative Party along with Jensen’s Progress Party and Trine Skei Grande’s Liberal Party agreed on main overall goals.

“We have a shared perspective about retaining well-paying jobs and developing the Norwegian economy,” Solberg told NTB. “We have a common understanding that the time is not right to use as much money as we have before.”

NTB also reported that the period of tax cuts is also over, both during the next Parliamentary period and probably until Solberg’s government is up for re-election in 2021. Since 2013 her government has abolished inheritance tax, cut the annual tax on individual and business’ net worth, and lower tax on companies.

As Norway’s economy continues to recover from the oil price collapse of 2014, and the country’s important oil industry revives as well, Solberg said the biggest threat now comes from abroad. Both her government and the opposition in Parliament are worried about looming trade wars set off by US President Donald Trump and his lack of respect for international trade deals and organizations.

The government’s budget conference runs through Thursday, but Solberg and her ministers took time out Wednesday afternoon to attend a special service at the Oslo Cathedral to celebrate the 50th wedding anniversary of King Harald and Queen Sonja, who married in the cathedral on August 29, 1968.

newsinenglish.no/Nina Berglund