There are four main reasons why expenses will skyrocket by an estimated NOK 100 billion next year: The electricity subsidy for households accounts for the largest increase when it enters the ordinary budget. (More than NOK 40 billion will be paid out this year in electricity subsidies.) Expenditures for pensions and various benefits in the national insurance account for around a third of the increased expenditure in 2023. The cost associated with receiving Ukrainian refugees will also increase by many billions. The same applies to expenses related to public construction projects. – Just the four cost areas mean that we have to spend approximately NOK 100 billion more next year than what we decided last autumn, says Finance Minister Trygve Slagsvold Vedum, referring to the adopted 2022 budget. – It happens at the same time that incomes do not increase as much, he states. “Budget hole” Vedum has invited news to his office to explain why this year’s budget process is completely unlike any other he has been involved in throughout his long career in national politics. The conversation is about “tough priorities”, “safe management” and “tight reins”. Income to the treasury is also growing strongly. This is because more people are in work, which results in increased tax revenues from people and businesses. And that the state makes a lot of money from high electricity prices. But income is not growing as strongly as expenses, according to Vedum and his experts. The Minister of Finance does not want to give the exact figure, but confirms the following: – We will be missing a couple of tens of billions before we start, he says of the budget. – You usually have a few tens of billions extra due to growth in the economy. Now we have a few tens of billions less. In Vedum’s budget, the task is therefore to close this “hole”, rather than to initiate new, expensive initiatives. Prices on the roof The backdrop for this year’s state budget is familiar to all Norwegians. Food has become more expensive, so has petrol and diesel and, not least, electricity. Prices are now 6–7 per cent higher than a year ago. The salary does not grow at the same rate. Vedum announces a budget aimed at curbing price growth and preventing it from getting out of control. Norges Bank is doing its part by sharply raising interest rates. Now the finance minister will also use fiscal policy to tighten spending. – The easiest thing is just to spend more oil money. We could do that. But the problem then is that we make it more difficult for people. If we spend more oil money, it will affect companies and people with ordinary and medium incomes, says Vedum. – Therefore, when we are going to lay down the state budget, we must cut the use of oil money. In a year where we see expenses increasing much more than income, we still have to tighten up on spending. The leader of the Center Party has himself been involved in budget work since 2005. He believes that the current situation is not similar to anything he has encountered before. – We cannot allow ourselves to just spend more oil money, because then we create new problems. LECTURE: Finance Minister Vedum must deal with sharp price increases. Photo: Beate Oma Dahle / NTB “There will be trouble” The government has already promised a “tight and fair” budget several times. Prime Minister Jonas Gahr Støre (Ap) did not hide from his own party colleagues this week that the autumn budget will be demanding. – My message to you today is: Folks, it’s going to be a tough autumn and a tough winter. BRÅK: Prime Minister Jonas Gahr Støre (Ap) spoke to party members this week. Photo: Gorm Kallestad / NTB – We have to stand together, even if there is a row, when there is a row. Because there will be noise, said the party leader. The Ap/Sp government’s proposal for the state budget for 2023 will be presented on 6 October. The government must then negotiate with SV in the Storting to get a majority for the budget. SV has already mentioned raising minimum pensions and child benefits as priority areas. It is not yet known which specific investments are included in the budget. But the government has been open about the fact that large, new public projects in construction can be put on hold. Promises from the Hurdal platform will also be pushed back in time, the prime minister has announced, without being specific about exactly what that means. At the same time, the government has laws to protect welfare. There will also be tax cuts for people who earn less than NOK 750,000. Those who earn more must count on increased taxes.
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100 billion in increased expenses in 2023 – news Norway – Overview of news from different parts of the country
