'We govern in a special time': What to expect from Norway's revised budget
Norway's Finance Minister, Trygve Slagsvold Vedum, is scheduled to unveil the updated national budget on Thursday. Here's what we currently know about it.
On Thursday, the Norwegian government will present its revised state budget proposals.
Based on the information already shared by various government officials, the plan is to spend more "oil" money to provide additional funding to, among other sectors, hospitals and police.
"There are large allocations that are moved in the revised national budget. Larger than we are used to seeing in the Norwegian context. We govern in a special time," Finance Minister Vedum told the Norwegian news agency NTB on Wednesday.
According to the minister, three expenditure items need to be adjusted upward: direct and indirect costs of the war in Ukraine, pensions and benefits, and compensation to the public sector for extraordinary price increases.
"We are not going to increase any taxes and duties, but there will be a slightly higher use of 'oil money'," Vedum said.
Increased public sector funding
Last year's estimate of how much prices would increase in 2023 was notably lower than actual inflation. Therefore, the Norwegian government has already announced that the public sector would get more funding to cover increased costs.
"The specific amounts will be announced on Thursday. But the price compensation will make sure hospitals function, the police show up (when needed) as before, and the Norwegian Road Administration can maintain the roads as they have planned," Vedum said on Wednesday.
The main goal for the government is for the public sector to maintain the same activity as planned before Christmas.
"And then we have put particular focus on hospitals and the police in the budget because these are basic services that are important for safety. The hospitals have also had some aftershocks after the coronavirus crisis, which has presented them with some unique challenges in the past year," the finance minister said.
A budget aimed at hospitals, working people, and pensioners
The government has already announced that the health sector is set to receive an extra 6.2 billion kroner in the revised budget. The allocation is intended to cover the hospitals' price compensation and finance increased construction costs on new projects.
"It is a solid plan for both the hospitals and the police... There will, of course, be local issues and local adaptations, but basically, it should be possible to continue the activity they had before Christmas," Vedum said, adding that the government also wants to set aside more funds for social security and pensions due to the extraordinary rise in prices and wages.
"We're… very concerned about how the budget looks for families with children, the retired couple, and working people - those who feel (the effects of) the increased prices," he said.
Earlier in the week, Health and Care Minister Ingvild Kjerkol said 200 million kroner would be earmarked for new round-the-clock care places in the revised budget.
"Specifically, we're proposing 200 million kroner for new investment grants so that planned projects can be carried out. It will provide the opportunity for more round-the-clock care places, which are important for those who cannot live at home in age-friendly homes," Minister Kjerkol told TV 2 on Tuesday.
This allocation should fund around 1,000 care places.
Energy efficiency measures
For his part, Energy Minister Terje Aasland has announced that there will be more money for energy efficiency in the revised budget.
According to media reports, tens of millions of kroner should be made available to Norwegian municipalities in the form of ENØK funds for better energy utilisation by end users, which municipalities could apply for to, for example, reduce energy consumption in municipal rental housing or retirement homes.
"We are very concerned about energy efficiency, and we want to help people with low incomes in a situation where there is a need to save electricity and where electricity prices are very high," Minister Aasland told Dagsavisen last week.
Cautious optimism
Despite the challenges posed by the cost of living crisis, Minister Vedum is expected to strike an optimistic tone during his Thursday budget presentation.
"The bright spot in Norway is that unemployment remains low. Things have gone better than what was feared last summer when it comes to unemployment," he said, noting that inflation is still high but lower than in many other countries.
"It will also be visible in the budget; our forecasts indicate that we will end the year with lower price growth than we entered it with."
The finance minister believes Norway will endure this challenging period without unemployment becoming too high.
"Our boat is more stable on the water now than a year ago. Although unrest surrounds us, we are on the right track."
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On Thursday, the Norwegian government will present its revised state budget proposals.
Based on the information already shared by various government officials, the plan is to spend more "oil" money to provide additional funding to, among other sectors, hospitals and police.
"There are large allocations that are moved in the revised national budget. Larger than we are used to seeing in the Norwegian context. We govern in a special time," Finance Minister Vedum told the Norwegian news agency NTB on Wednesday.
According to the minister, three expenditure items need to be adjusted upward: direct and indirect costs of the war in Ukraine, pensions and benefits, and compensation to the public sector for extraordinary price increases.
"We are not going to increase any taxes and duties, but there will be a slightly higher use of 'oil money'," Vedum said.
Increased public sector funding
Last year's estimate of how much prices would increase in 2023 was notably lower than actual inflation. Therefore, the Norwegian government has already announced that the public sector would get more funding to cover increased costs.
"The specific amounts will be announced on Thursday. But the price compensation will make sure hospitals function, the police show up (when needed) as before, and the Norwegian Road Administration can maintain the roads as they have planned," Vedum said on Wednesday.
The main goal for the government is for the public sector to maintain the same activity as planned before Christmas.
"And then we have put particular focus on hospitals and the police in the budget because these are basic services that are important for safety. The hospitals have also had some aftershocks after the coronavirus crisis, which has presented them with some unique challenges in the past year," the finance minister said.
A budget aimed at hospitals, working people, and pensioners
The government has already announced that the health sector is set to receive an extra 6.2 billion kroner in the revised budget. The allocation is intended to cover the hospitals' price compensation and finance increased construction costs on new projects.
"It is a solid plan for both the hospitals and the police... There will, of course, be local issues and local adaptations, but basically, it should be possible to continue the activity they had before Christmas," Vedum said, adding that the government also wants to set aside more funds for social security and pensions due to the extraordinary rise in prices and wages.
"We're… very concerned about how the budget looks for families with children, the retired couple, and working people - those who feel (the effects of) the increased prices," he said.
Earlier in the week, Health and Care Minister Ingvild Kjerkol said 200 million kroner would be earmarked for new round-the-clock care places in the revised budget.
"Specifically, we're proposing 200 million kroner for new investment grants so that planned projects can be carried out. It will provide the opportunity for more round-the-clock care places, which are important for those who cannot live at home in age-friendly homes," Minister Kjerkol told TV 2 on Tuesday.
This allocation should fund around 1,000 care places.
Energy efficiency measures
For his part, Energy Minister Terje Aasland has announced that there will be more money for energy efficiency in the revised budget.
According to media reports, tens of millions of kroner should be made available to Norwegian municipalities in the form of ENØK funds for better energy utilisation by end users, which municipalities could apply for to, for example, reduce energy consumption in municipal rental housing or retirement homes.
"We are very concerned about energy efficiency, and we want to help people with low incomes in a situation where there is a need to save electricity and where electricity prices are very high," Minister Aasland told Dagsavisen last week.
Cautious optimism
Despite the challenges posed by the cost of living crisis, Minister Vedum is expected to strike an optimistic tone during his Thursday budget presentation.
"The bright spot in Norway is that unemployment remains low. Things have gone better than what was feared last summer when it comes to unemployment," he said, noting that inflation is still high but lower than in many other countries.
"It will also be visible in the budget; our forecasts indicate that we will end the year with lower price growth than we entered it with."
The finance minister believes Norway will endure this challenging period without unemployment becoming too high.
"Our boat is more stable on the water now than a year ago. Although unrest surrounds us, we are on the right track."
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