Prime Minister Erna Solberg has moved closer to her dream of leading a majority non-socialist government, after representatives from all four political parties involved agreed on a new state budget proposal Tuesday night. There’s already lots of complaining, though, especially from Solberg’s government partner, the Progress Party.
The budget breakthrough remains significant as Solberg’s Conservatives, Progress, the Liberal Party and now the Christian Democrats settle on funding compromises for the year ahead. Tougher negotiations loom to actually form a four-party conservative coalition government. They’re not off to a good start.
“Folks are sour, too sour, really,” worried one member of the Progress Party whose parliamentary delegation was so unhappy over the proposed budget pact that they delayed approving it Tuesday night. A press conference had been scheduled for 9pm to announce the budget agreement. It was delayed until after 10pm because Progress MPs took lots of time to argue about it and narrowly avoided rejecting it. State broadcaster NRK reported that only 12 voted in favour of it while nine voted against and wanted to negotiate better terms.
They were particularly annoyed after opposition parties in Parliament earlier in the day had appeased the Christian Democrats by suddenly voting to overturn changes that the Conservatives and Progress had earlier made in tax-free quotas. From January 2020, Norwegians returning from abroad will only be able to bring a total of four bottles of wine home tax-free, instead of six if they didn’t also buy any tobacco.
Then the budget negotiations revealed that Progress representatives at the bargaining table had gone along with another demand from the Christian Democrats to remove a NOK 350 tax exemption on goods ordered from abroad. Now all goods ordered online will be subject to both customs duty and Norway’s 25 percent VAT. There also were a few other tax increases, including on income tax for those earning more than NOK 900,000 a year.
“The sum of the tax-free taunt and that tax-free online trade collapsed, plus other tax hikes is very demanding for many of us,” another Progress Party member told NRK.
‘A lot of tension’
“It’s no secret that there’s a lot of tension (between Progress and the Christian Democrats),” said Helge André Njåstad, finance policy spokesman for the Progress Party. “We have agreed on the budget, but in order to agree on a day-to-day obligatory cooperation, we must speak better about each other than we have.” He also indicated that since the small Christian Democrats party prevailed on many budget issues, they will need to lower their ambitions on government platform issues.
It was politically important, however, for the Christian Democrats’ chief negotiator, Kjell Ingolf Ropstad, to launch into any government coalition cooperation with a strong offense. His own party is deeply split, with many advocating cooperation with the left-center parties instead of the conservative government coalition. He needed concrete results from the government budget negotiations, and thinks he got them. He secured the first increase in child welfare payments to families since 1996, for example, plus an increase in pension income for single retirees, an increase in the payments made to families when a child is born and, in total, re-allocation of NOK 4.3 billion in the state budget that will better reflect the Christian Democrats’ policies. He failed to win funding to take in more refugees, but succeeded at securing more funding for foreign aid.
Now the budget proposal will be debated in Parliament, but it seems assured of winning approval. Negotiations will also ensue among Solberg’s government partners and the Christian Democrats over a possible new platform that will include them in her coalition.