Norway wakes up to biggest ever budget

Norwegians awoke on Thursday to news of the largest national budget in the century-old state’s history, as early morning budget leaks to the press heralded a 1.006 trillion kroner ($172.04 billion) spending spree for 2012.

Finance Minister Sigbjørn Johnsen’s delivery of the budget endured an hour of intense, nationwide media glare before his long presentation was scheduled to begin.

Some of the leaks shocked observers. There was the three billion kroner demanded by the European Union for the right to trade with the bloc. There was also 675 million in expenses related to the massacre of innocents in July by the bomber-gunman Anders Behring Breivik, leading to shattered government buildings, increased anti-terror salaries, and equipment.

“The budget has become what it is amid disorder and great insecurity,” a serious Johnsen said on national television. He called it a “tight” budget, although he was dispersing an extra 10 billion kroner in money brought in by offshore oil revenues.

Most shocking for most was Johnson’s intetsion of spending less than what was available to him in an attempt not to hurt Norwegian exporters by strengthening the kroner.

Norwegians will see costlier food from January 1st, 2012, as a new value-added tax of 15 percent is levied, up from 14 percent. Broadcaster NRK leaked the news two days before today’s budget delivery.

Newspaper Klassekampen, or Class Struggle, reported that diesel motors on new cars releasing unheralded amounts of nitrogen oxide will be charged a one-time tax in-line with the NOX tax on shipping.

The government had in the weeks leading up to the budget allowed early registry for an emailed version of the budget to be sent to politicians. The Local used a numbers-only Microsoft Excel version of the budget to confirm what was being reported.

The expansive budget crept over a trillion kroner for the first time, as government expenses are expected to rise by 2.1 percent in 2012 on the strength of annual wage hikes. The budget uses a set percentage of government oil revenues which this year swelled by 450 billion kroner to inflate the sovereign “oil fund” to 3.543 trillion kroner.

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Norway announces major spending plan including airline bailout

The Norwegian government plans to spend 16 billion kroner on ‘crisis relief’ packages including funding for students and a recovery plan for struggling airline Norwegian.

Norway announces major spending plan including airline bailout
Norwegian PM Erna Solberg. File photo: AFP

Prime Minister Erna Solberg presented the spending plan, which includes a number of focus areas, on Friday afternoon.

Money will be spent on students in an effort to reduce the number of people who drop out of their studies or delay them, broadcaster NRK reports.

Additionally, the government wants to provide an emergency loan of 1.5 billion kroner to airline Norwegian. Oslo recently altered its course on bailing out the company after it presented a new recovery plan.

READ ALSO: Norway’s government offers hope to ailing airline Norwegian

Additionally, compensation schemes for companies and employees affected by the lockdown would be extended until June, and 500 million kroner would be put aside to assist municipalities which have incurred large costs due to the Covid-19 pandemic.

Money has also been budgeted for support for major public events likely to be affected by coronavirus restrictions through to the end of June.

Funding is also provided for the continued operation of quarantine hotels until the end of June.

READ ALSO: What you need to know about Norway’s new border restrictions

The package, which is funded largely by Norway’s sovereign wealth fund from the country’s oil riches, requires a parliamentary majority to be rubber-stamped and must therefore be approved by other parties.

Several other parties – who can form a parliamentary majority – have presented an alternative relief spending plan, however. That potentially gives them the power to decide the shape of the final spending plan.

The proposal is scheduled to be taken up in parliament on February 19th.