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Tuesday, May 21, 2024

More billions behind new crisis package

Prime Minister Erna Solberg and her Conservatives-led government rolled out yet another crisis package Friday, funded with an extra NOK 27 billion from the state’s sovereign wealth fund. It’s targeted at programs to boost labour competence, improve labour integration, extend cash support to businesses and help cover salary costs to reduce layoffs.

Prime Minister Erna Solberg (pink jacket) unveiled her government’s latest crisis package on Friday, with the screen at left claiming it will help “get Norway out of the crisis,” create more wealth and include more people in the workforce. At far left, Finance Minister Jan Tore Sanner and at right, Trade Minister Iselin Nybø. PHOTO: Statsministerens kontor/Arvid Samland

The package also will fund cuts in the tax Norway imposes on individual personal wealth. That was already prompting criticism from the left side of Norwegian politics, which generally oppose all attempts to cut the fortune tax known as formueskatt.

“We need more than this to get Norway out of this crisis,” Labour Party leader Jonas Gahr Støre told state broadcaster NRK after the new crisis package was unveiled. He predictably blasted the proposal to cut the fortune tax, saying it would only benefit the wealthiest people in Norway and wouldn’t help “start the wheels turning” again.

Kari Elisabeth Kaski, a Member of Parliament for the Socialist Left party (SV) called solberg’s package “grey and anti-social,” while the Greens Party complained that it only offered NOK 3.6 billion to “green” programs aimed at making Norway less reliant on the oil industry.

Only the conservative Progress Party, which was a member of Solberg’s government until five months ago, supported some aspects of the package, especially the fortune tax cut proposal. Progress’ Sylvi Listhaug, however, complained that no money was earmarked for roadbuilding, “and that’s what we’ll demand.”

Prime Minister Erna steadfastly defended her latest attempt to get Norway’s economy out of the rut created by the Corona virus crisis and collapse in oil prices. They have since risen, however, and the economy is showing signs of recovery as Norway gradually reopens after its Corona shutdown. PHOTO: Statsministerens kontor/Arvid Samland

Solberg, however, claimed the new package would relieve Norway’s economic situation “here and now,” and prepare Norway for the future. “It will create a better foundation for value creation in the economy of the future,” Solberg said at yet another government press conference Friday afternoon.

The tax cut on net worth will amount to NOK 1.3 billion. Solberg also wants to spend NOK 600 million on programs to better include and integrate immigrants into the workforce, along with NOK 1 billion to fund programs aimed at enhancing competence. All of that will have to be negotiated with opposition parties in Parliament.

The government hopes to offset earlier criticism that municipal governments haven’t received enough emergency funding, by putting another NOK 5.7 billion on the table in addition to the NOK 10.8 billion earlier earmarked for local governments. They’re responsible for delivery of many of Norway’s social welfare services, and have sent out calls for more state assistance.

Then comes an extra NOK 4.4 billion for programs to stimulate the economy, including several major maintenance projects that would create jobs. Parents will also be able to take off an extra 10 days each from work if they need to stay home with their children, while the government wants to phase out enhanced unemployment benefits from September 1.

The Norwegian economy, meanwhile, is showing signs of improvement as Norway gradually reopens for business, and the krone has strengthened considerably in the past few days. That’s largely tied to higher oil prices, which have been hovering around USD 35 for a barrel of Norway’s North Sea crude oil, up from less than USD 20 at the depth of the Corona crisis. It cost NOK 9.88 to buy one US dollar on Friday afternoon, compared to as high as NOK 11 earlier this spring. Berglund



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