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EXPLAINED: What the revised national budget in Norway means for foreigners 

The Norwegian government has presented its revised budget for 2022. Here's The Local's roundup of some of the key proposals and what they mean for your wallet.

Pictured are coins.
Owning an electric car, higher loan and mortgage repayments are among the things becoming more expensive in the revised budget. Pictured is a a stack of coins. Photo by Pixabay: https://www.pexels.com/photo/selective-focus-photo-of-stacked-coins-128867/

Electric cars to become more expensive

The government will replace the VAT exemption for electric cars with a subsidy scheme. This means that electric cars that cost over 500,000 kroner will be subject to VAT, while EVs that cost less will be exempt from VAT. 

The government has said the cost of buying an EV with a sticker price of 600,000 would become 25,000 kroner more expensive. 

An EV costing more than a million kroner will become 125,000 kroner pricier, according to the government’s proposals. 

“If you can afford to buy a car for 1.7 million, it is only fair and reasonable that you also pay VAT,” Finance Minister Trygve Slagsvold Vedum said of the announcement

The scheme will come into effect next year. 

Free ferry tickets

All ferry journeys on routes with less than 100,00 passengers will be free from July 1st. This is likely to make around 30 of Norway’s 130 connections completely free of charge. 

The free trips will apply to local residents, tourists and other travellers. 

READ MORE: Why some ferry routes in Norway will be completely free this summer

It’ll become easier to get a better deal on energy prices 

The government will offer five million kroner in funding to help improve the Consumer Council’s electricity price comparison site strømpris.no.

The funding will make the comparison site better so that both spot price and fixed price customers can get the best energy deal available and save money. 

The government expects high electricity prices to continue

The government has written in its revised national budget that it expects high energy prices to continue. 

Tax revenues from the power companies will be used to cover the expenses of the electricity subsidy scheme, which sees the government pick up 80 percent of energy bills when the spot prices rise above a certain amount. 

Experts: Loan and mortgage repayments to increase faster

Loan and mortgage repayments could go up more quickly than anticipated due to increased oil spending, business and financial site E24 reports. 

In the revised budget, the government has said that it plans on spending 30 billion more of revenue from the oil fund than previously expected. 

“I think this is a somewhat more expansive use of money than Norges Bank (Norway’s central bank) had envisioned, and in that sense, I think that in isolation, it could contribute to a higher interest rate path, not strongly, but somewhat higher,” Kjersti Haugland, chief economist at DNB, told E24. 

If Norges Bank raises the key policy rate, lenders will follow suit meaning the loan or mortgage becomes more expensive to repay. 

Counties will be split up to improve local services

Viken will be divided into Akerhus, Buskerud and Østfold. Vestfold og Telemark will be split into two, as will Troms og Finnamrk. 

If parliament can make a final decision before the summer, the division will take place from January 1st 2024. 

The government wants to split the counties to improve the availability of local services in these areas, according to a press release from the Ministry of Local Government

Air passenger tax scrapped for the rest of the year

The air passenger tax, which was shelved for the last few years, will also be frozen until the end of the year. 

Cut in support for public transport

The government will be cutting its support scheme for public transport firms hit by a loss of income related to the pandemic from July 1st. 

For consumers, this means that some firms will cut the routes they offer due to the funding ending. 

Ruter has said that it is already cutting the number of routes from July 4th as passenger numbers are not back to pre-pandemic levels.Routes could also be cut in Oslo and Viken

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POLITICS

Norway and UK sign joint declaration on cooperation 

Norwegian PM Jonas Gahr Støre met his UK counterpart Boris Johnson in London on Friday, where the pair signed a joint declaration on strategic cooperation between the two countries. 

Norway and UK sign joint declaration on cooperation 

Norwegian Prime Minister Jonas Gahr Støre visited Downing Street on Friday and met UK Prime Minister Boris Johnson, where the pair signed a declaration of cooperation between the two countries. 

“Britain is a good neighbour and close ally. We have a long tradition of close cooperation. The British are now outside the EU, and bilateral cooperation is becoming even more important than before,” Støre said in a statement on the government’s website

The joint declaration on bilateral strategic cooperation outlines defence and security, the climate and environment, research and innovation and education and culture as issues the two countries wish to cooperate on in the future. 

Støre’s visit was the first bilateral meeting of the countries’ PMs since Brexit. The pair also discussed the green shift, the war in Ukraine and defence. 

Støre also arranged a round table conference on energy, the climate and business with the UK Minister of Trade, Kwasi Kwarteng, and a number of representatives from Norwegian and British firms. 

“The green transition is important for our two countries. I spoke about our great ambitions for offshore wind, and this is one of many areas where Norway and the United Kingdom can cooperate more,” Støre said. 

Earlier this week, the Norwegian government announced that it would build 1,500 offshore wind turbines by 2040

Last year, the UK and Norway signed a post-Brexit trade deal, which the Norwegian government said was the largest free trade agreement the country had entered into outside of its arrangement with the European Economic Area. 

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