Finance Minister Trygve Slagsvold Vedum (Sp) has done a good job of softening expectations for next year’s state budget, which was presented on Thursday. Maybe a good job a bit.
Times are getting tight. We are in the middle of a complex crisis, but the cure this time is to spend less oil money, not more.
Channel Two commentator, Aslak M. Eriksrud Photo: Tommy Storhaug / TV 2
Faydam delivered the goods. One can of course debate whether it has performed well enough, and whether there should be further reductions in the use of oil money.
But the use of oil money has fallen by more than NOK 18 billion in a year when government spending has increased by NOK 100 billion.
Yes, income also increased, but not in return.
I found room for investments
Despite this, the government has found room for new initiatives, such as lower prices for nurseries, greater investment in mental health among young people, cheaper ferry rates, and more funds for the GP scheme.
The reason for the higher account is a historical tax increase of 46 billion NOK.
If you had told Vedum and Støre on the campaign trail that they were going to increase taxes by more than NOK 50 billion in your first two years in government, they would have kicked you out of being a great comedian, shaking their heads.
Björnard Moxness and Rudt were not in favor of such large tax increases. But then came the electricity price shock, the war in Ukraine, food price increases, the energy crisis, international turmoil, inflation, and rising interest rates.
Crisis after crisis
The new government had to deal with crisis after crisis, and this time the answer from the state could not be more oil money.
So did Erna Solberg (H) and Jens Stoltenberg (AP), as they dealt with the financial crisis, the oil crisis, and the pandemic.
This would make matters worse, contribute to an increase in prices and wages, not least an increase in interest. No government can ignore such warnings from heavy professional circles, not least from the Norges Bank rate-setters.
There is every reason to expect that the SV will not adjust this tax increase in the upcoming negotiations.
Thus, Labor and the Center Party will raise taxes in two years more than what the Red Party proposed last year throughout the entire parliamentary session. (There is somewhat of a difference in the picture, as large shares of these tax increases are placed on an energy industry that suffers from staggering incomes from very high electricity prices.)
tough times
As expected, criticism from all sides was directed against the budget proposal. But I haven’t heard anyone call for more oil money to be used next year.
Hence it is heading towards more difficult times, not only for ordinary people and companies, but also for politicians. They are now forced to prioritize more.
Do you want to spend billions on new social reforms, or on tax cuts for payrollers and businesses, you say? Yes, then you also have to find coverage for it elsewhere in the budget.
If you want to avoid increasing taxes and fees, you have to find other places to reduce them. There is plenty of room for that in the state budget of over 1,700 billion NOK. Aid, cultural initiatives, transportation projects, the sick pay system, or other Social Security benefits may be cut off. to mention something.
New political controversy
What most cuts have in common is that they don’t come without a cost to those affected. And one, not quite small, Politician The cost of the parties carrying it out. It’s much easier to do what governments have been doing over the past few decades, just blow on the billions pouring in from the North Sea.
But this does give hope for a more exciting and clear political debate in the future. The ideological differences between the two sides will become clearer. It becomes more difficult to hide the reverse side of the medal.
Politics can actually have a renaissance.
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