Norwegian Budget

Compared to the mess of last year’s budget, the government has actually managed to do relatively ok-ish this time around. Granted, it would be hard to do worse than the budget last year, which managed to estrange the two parties propping the government up, and has made this past year a bumpy ride for Messrs Conservatives and Populists. As soon as last year’s budget had been presented it was denounced by the Liberals as lacking any green credentials and the Christians howled indignantly at the reductions in foreign aid.

This time however, the government has decided not to aggravate the two parties precariously and half-heartedly offering them support. Instead the finance minister took her check-book out and went on a huge spending spree. More for education, more for infrastructure, more for research. More on pretty much anything. In fact, so much more that the finance minister couldn’t think of a single place she’d cut when questioned after the budget was announced. She later confirmed that her office would be spending less on staplers in the coming financial year.

Rather than tempering increased spending with increased taxes, she decided to make history as the first finance minister to take more money out of the oil fund than she put money back into it. She also decreased taxes for good measure. It’s hard to see the economic soundness of spending more, while reducing tax-income and raiding the rainy-day kitty. But then again, Norway is in a luxurious position compared to most other countries and the oil-fund is there to be spent at some point, I suppose (just rather a pity it has to start so soon).

It might all be an ingenious trick on the part of the government, as it’s difficult to criticise more spending and less taxes without sounding like a wet-blanket (albeit an economically sound wet-blanket). But the government is probably calculating that this will put the heirs apparent in an awkward position; will Labour fight to increase taxes again or will they decide to leave them as they are in the 2017 election campaign?

An interesting tension to keep an eye on is the need for more money to pay for the integration of 8000 Syrian refugees arriving in Norway over the next three years. The finance minister’s party opposes compassion on principled grounds, yet still needs to find the extra money because parliament has voted for taking in more refugees. It’s good fun listening to the finance minister trying to keep the swivel eyed loons in her party satisfied, while being in charge finding cash for the policy. This will certainly be one to watch, and your sloth on the ground will keep you updated.

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