In this interview with news, the Center Party leader makes five budget promises. He also explains why the current situation is different from previous crises – and makes a realization about Norwegians’ private finances. But first a very concrete power promise: – We will have a security scheme next year as well, and longer than until March 2023. It has not been finally adopted, but it will be the government’s recommendation to the Storting, says Vedum. From 1 September, the state covers 90 per cent of the bill when the electricity price exceeds 70 øre per kilowatt hour (kWh). Recently, the Ministry of Finance estimated that the state will spend NOK 40.7 billion on electricity subsidies for households this year. – When we adopted the hedging scheme last autumn, the analyzes indicated that prices could normalize this summer. There is nothing to indicate that this will happen. Therefore, people can feel secure that we will have an insurance scheme as long as we have these extraordinary times that we now have. Despite an electricity subsidy of almost NOK 10,000 in the first half of the year, the electricity bill for an ordinary family in Eastern Norway increased by NOK 3,900 in the first half of the year, according to a recent estimate from NVE that E24 has mentioned. Vedum will not say exactly how the scheme will be continued after March next year, but refers to the state budget. BUDGET INPUT: Trygve Slagsvold Vedum will meet the rest of the government at the budget conference next week. Photo: Kristian Skårdalsmo Five budget promises The government gathers on Wednesday and Thursday for a budget conference at the Prime Minister’s office to put the finishing touches on the 2023 budget. The government’s proposal for the state budget for next year will be presented on 6 October. The Labor Party and the Center Party will then negotiate with SV in the Storting in order to obtain a majority for the budget. But the finance minister is already making five budget promises: The use of oil money will be tightened People with “low and medium incomes” will get tax cuts New large and expensive public projects will be put on hold The budget will contribute to reduced differences in Norway Defense and preparedness will be a main priority The curtain for budget work, a Europe is at war. Russia’s invasion of Ukraine has not only brought great suffering – it has also led to a shortage of energy in Europe and sharply rising prices for electricity, fuel and food, also in Norway. BUDGET: This week the Støre government gathers to finalize the 2023 budget. Photo: Håkon Mosvold Lar The rise in prices, which is also driven by a strong economic recovery in Norway, has become a major concern for Vedum. – This means that we have to spend less oil money. It is more demanding for a finance minister than spending more. Then you have to prioritize something lower. Then we have to make sure that what we prioritize is preparedness and security. This year, the government estimates that it will spend around NOK 350 billion from the oil fund. – Which election promises do you have to put on hold when you have to tighten up? – My main promise was that we should pursue a policy of smaller differences, both geographically by developing the whole of Norway, but also between people. And the SP leader makes the following tax promise: – People with incomes below NOK 750,000 will receive slightly less tax with this government, while people with incomes above NOK 750,000 will receive slightly more tax. That is the clear course. New crisis, different medicine While the financial crisis in 2008, the oil crisis in 2014 and the corona crisis in 2020 were about spending more money, it is now the opposite, warns Vedum. – You have one measure if there is a fire and another measure if there is a flood, he captions the picture, and explains: – In the previous crises, there was a need for more activity and more money and then it was “easy” to be a politician, because then you could only spend as much money as you wanted. But if we had done it now, we would respond with the same medicine to a completely different crisis. RATE JUMP: Central Bank Governor Ida Wolden Bache. Photo: Ole Berg-Rusten / NTB Increased spending now will only drive prices even higher and in the next phase create increased insecurity, argues the Sp leader. – High prices hit everyone, but even harder those with low and normal incomes. High price growth is also a problem for many small businesses. Last week, Norges Bank raised the key interest rate by 0.5 percentage points, for the second time in a short time. In its economic forecasts just before the weekend, DNB Markets estimated another interest rate jump of 0.5 percentage points in September, and then two further interest rate increases of 0.25 percentage points in 2022. – This brings the key interest rate up to 2.75 percent at the end of the year, writes the brokerage house. Vedum therefore strongly warns against spending more money now, as several opposition parties advocate. – It is a recipe for putting even more pressure on prices. If there is one thing we do not want, it is to put further pressure on prices. Even higher price growth will also put pressure on interest rates. – Became more demanding The Minister of Finance received a lot of attention when he presented a calculation in the spring to convey the message that a so-called ordinary Norwegian family would actually be better off this year than last year. But sharply rising prices for electricity, fuel and food have worsened Norwegians’ finances. – This year it has become more demanding for many. There is no doubt about that, says Vedum now. – Prices have increased more than was thought in the salary settlement this spring. There is no doubt that many single families are now feeling uneasy. CALCULATION: Finance Minister Trygve Slagsvold Vedum with Fredrik Solvang in news’s Debate this spring. Photo: The debate The salary settlement in the governing so-called front profession ended at 3.7 per cent this spring. But this summer, price growth on an annual basis has reached over 6 per cent. – Were you too eager to say that people will be better off with a new government? – In the spring wage settlement, when NHO, LO and Statistics Norway made joint figures, it was not thought that there would be such a high price increase. A government must at all times use estimates and the figures it has. Vedum acknowledges that Norwegians, with what we know today, will get worse advice this year. – The price increase we have seen in recent months has been much higher than what the parties thought this spring. He will not give any estimates for next year and refers to the budget. – With as much unrest as there is now, the forecasts going forward will probably have a greater degree of uncertainty than we have been used to. Many Norwegians, including central people in Vedum’s own party, have also become fed up with sky-high petrol and diesel prices. In July this year, petrol was 47 per cent more expensive than at the same time last year. – What is your message to all those who expect duty cuts on petrol and diesel? – What has been my main job in the budget is to ensure security and create a tax and levy system that, in sum, presents fewer challenges for people with normal incomes. That is the task, to manage to reduce the differences. Then we get to take the final tax and levy measures when the budget is finally laid down.
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Vedum promises electricity support throughout 2023 – news Norway – Overview of news from various parts of the country
