Minister of Finance Siv Jensen arrives to announce at Parliament the national budget for 2015. Photo: Lise Åserud / NTB scanpix
Norway is set to use more of its oil money to 'lubricate' the economy, Finance Minister Siv Jensen announced in Parliament on Wednesday.
Budget 2015 in brief
- King and Queen of Norway will get 10.5 million kroner next year to spend, while the Crown Prince couple will get 8.7 million kroner. An increase of respectively 500,000 kroner and 400,000 kroner.
- Extra 100 million kroner allocated to shortening waiting lists for places in Norwegian kindergartens.
- 55 billion kroner will be spent on infrastructure, an increase of 5 billion kroner.
- Aid to third world countries to increase by 1 billion kroner - Still less than target of 1% of the gross national income.
- Local governments will receive 6.2 billion kroner in 2015.
- Norwegian armed forces will have their budget increased by 3.4 percent next year.
- 1.4 billion kroner boost to the public sector to ensure greater efficiency.
- 183 million kroner on immigration - focus on more deportations of illegal residents and making them faster.
- Child Protection Services will receive 150 million kroner more next year.
- Norwegian healthcare will receive 2 billion kroner more for patient treatment.
- PST will receive 68 million kroner more next year.
- Norway’s support to Ukraine will increase from 40 million kroner to 200 million kroner to help ease Russian pressure on the country.
The Norwegian government will set aside 164 billion kroner ($25 billion) from its oil fund next year towards its national budget.
Minister of Finance Siv Jensen proposed during her budget announcement using 3 percent of Norway's oil fund’s value next year, compared to 2.8 percent this year.
This will give the Norwegian government 17.3 billion kroner ($2.7 billion) additional to spend on 2015's budget.
Jensen said during her speech in Parliament in Oslo on Wednesday: “The strong growth in the value of the oil fund gives Norway opportunities that many other countries don't have.”
Around each ninth krone that is spent on public budgets in 2015 will be taken from the oil fund.
The spending of oil income is estimated to be, for 2015, 58 billion kroner ($9 billion) less than the Budgetary Rule allows, which is up to 4 percent of the value of the oil fund.
Norway's oil fund is expected to be more than 6,000 billion kroner ($925 billion) at the end of this year.
The current government aims at spending more of the oil money on investments and on tax reliefs, something that they believe will stimulate the growth of Norwegian businesses.
The increase in spending more oil money is justified by the current government with an expected low growth of the Norwegian economy over the years ahead.
In the national budget for next year, investments in education and city infrastructure are priorities. The budget frame for the Norwegian Ministry of Transportation and Communications will be raised by 5 billion kroner next year.
Both the Labour Party and the Socialist Party (SV) criticised strongly the government’s national budget for 2015.
Marianne Martinsen, Labour MP, said to NTB: “The tax reliefs follow a well known recipe: They will give far too much to far too few. Most people will fall short of a few kroner a day, while the few who are the richest, will get tens of thousands of kroner more every day. The government itself reports that the tax reliefs won't have any dynamic effect upon the economy.”
The Labour Party also attacked the government for not following “the big words of the speech from the throne
on proposing a green change”.
Martinsen stated: “Instead, the government will stimulate car traffic. This is bringing Norway in the wrong direction in an era when the world needs to gather together on measures to save the climate.”
SV MP Snorre Valen added to the debate: “The national budget is a targeted attack on the poorest children and a grand subsidiary of a big party for the richest. It will give tax reliefs to those who have the most. Regular people get tax reliefs that don't even stand equal to the increase of kindergarten fees.”