On a brisk Sunday morning, Norway's Finance Minister, Trygve Slagsvold Vedum, announced a landmark budget agreement with the Socialist Left Party (SV). The pact, a culmination of intense negotiations since November 13, introduces significant changes to Norway's financial landscape, and sets the tone for the nation's fiscal policy in the coming year.
A Shift in Priorities
The agreement signifies a tangible shift in Norway's priorities. With an increase in taxes and fees by 1.3 billion kroner, it champions the welfare of its citizens, particularly the younger generation. The budget introduces an annual raise of 2400 kroner in child benefits for children over six years, culminating in a total of 1.9 billion kroner. Additionally, third graders will now be privy to a free half-day spot at the School Age Childcare (SFO), and study support will witness a 10% surge starting from August 1, 2024.
Complementing the focus on education, the budget also earmarks a 200 million kroner recruiting subsidy for Health North. A nod to the pressing demands of climate change, the agreement sets aside approximately 4 billion kroner for green transition initiatives. Voluntary forest conservation receives a boost with an allocation of 449 million kroner, and the Housing Bank will see an increased loan framework of 5 billion kroner.
Revisiting Tax Relief and Revenue Sources
The revised budget agreement trims down the tax relief from 6 billion to around 4.5 billion. The shortfall will be compensated by one-time incomes, a billion extra expected from a surcharge refund on export, and a considerable contribution from Export Financing Norway (Eksfin), which is expected to bring in an additional 9 billion in revenues. Despite the increased spending, the Finance Minister reiterated the government's commitment to avoiding an increase in oil fund spending. He further explained that while the budget's size remains unaltered, funds have been reallocated to meet the nation's changing needs.
Kirsti Bergst, the SV's leader, hailed the budget for its focus on tackling the pressing issues of our time, such as cost of living, economic disparities, and the urgent need for climate and nature conservation.