Government cuts 17 billion in revised national budget / News / The Foreigner

Government cuts 17 billion in revised national budget. Economic performance better than expected, but savings must be made. Labour (Ap) Finance Minister Sigbjørn Johnsen presented the government’s revised national budget today. There were more losers than winners.Employment at a cost Norway has been relatively unaffected by the financial crisis and global recession in comparison to most other industrial countries.

sigbjoern, johnsen, revised, national, budget, oil, fund, savings, cuts, grants, financial, package



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Government cuts 17 billion in revised national budget

Published on Tuesday, 11th May, 2010 at 15:55 under the news category, by Michael Sandelson   .
Last Updated on 11th May 2010 at 17:39.

Economic performance better than expected, but savings must be made.

Handful of kroner
Handful of kroner
Photo: aslakr/Flickr


Labour (Ap) Finance Minister Sigbjørn Johnsen presented the government’s revised national budget today. There were more losers than winners.

Employment at a cost

Norway has been relatively unaffected by the financial crisis and global recession in comparison to most other industrial countries.

But the European economic outlook is still uncertain.The principle aim of the government’s 2009-10 economic policy has been to keep unemployment low and this has worked, the government claims.

On average, the unemployment rate is now lower than it has been for the past 20 years, and is estimated to be at 3½ percent.

The government has achieved this through its financial rescue package. But the use of Oil Fund (the Government Pension Fund Global/GPFG) return-based revenue has far exceeded the fiscal rule of four percent as a result.

Johnsen has already warned he wants a return to this, possibly leading to tougher times ahead. 17 billion kroner has to be saved.

Below is a summary of the main points of today’s revised national budget presentation.

Cuts

  • 1,085 million in reduced climate quota purchases. Prices have been lower so far this year than originally thought.
  • 533 million in reduced subsidies to the State Pension Fund.
  • 323 million less for asylum reception centres. The government expects far fewer asylum seekers this year. The result is a saving of 551 million in allocations to the ministries of Education and Research, and Children, Equality, and Social Inclusion.
  • Reducing expenditure on nursing home places by 183 million. This includes sheltered housing.
  • 122 million less on CO2 capture. Part of the Mongstad gas power plant affair. Grants for planning a full-scale facility, together with transport and carbon storage will be reduced by 510 million. The test centre is to get an extra 388 million, however.
  • 116 million cut in kindergarten grants.

Taxes

The government says changes to these will be minimal. However, it plans to press ahead with introducing a CO2 tax on natural gas from 01 July. This will hit the pockets of house-owners who use gas for heating and/or cooking.

Oil companies will have to report sales of gas extracted from the Norwegian Continental Shelf to the taxman.

The winners

  • 274 million to the railways for maintenance and upgrade work. Labour’s Prime Minister, Jens Stoltenberg, has mentioned this previously.
  • 259 million in increased grants to the national road system.
  • 247 million extra to be spent on labour initiative. This will give state-sponsored jobs to an average of 75,000 people in 2010.
  • 200 million extra for shipyards. This is to be divided amongst shipyards, offshore works, and equipment suppliers. The package is meant to help save Norwegian jobs in the wake of the current Euro crisis.

“The crisis in Greece and high government debt in other European countries may interfere with a continued gradual recovery in Europe, and also shows how important it is that keeps track of state finances,” says Sigbjørn Johnsen in a press release.




Published on Tuesday, 11th May, 2010 at 15:55 under the news category, by Michael Sandelson   .
Last updated on 11th May 2010 at 17:39.

This post has the following tags: sigbjoern, johnsen, revised, national, budget, oil, fund, savings, cuts, grants, financial, package.





  
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