The government can thank itself for having used the weeks well to leak the goodies in its own budget. When the moment of truth is here, the criticism naturally comes too. This is the day to take a closer look at the reverse side of the medal. One of these is the government’s announced tax reductions, which can at best be called overselling. The government still keeps many of its words. The districts are well looked after, now also with write-downs of student loans for large parts of the country. “Everyone should join” in the form of cheaper daycare and free after-school care. Behind the new favorite word security lies a historic commitment to defence, and a more moderate increase to the police. Without the fact that it seems to have led to very many unpopular cuts elsewhere in the budget. With some important exceptions. It is difficult to understand that Ap and Sp have allowed a municipal rebellion to develop, which we almost have to go back to “Jern-Erna’s” time to see the extent of. More on that later for the municipalities’ situation should serve as a shock and a warning. Best on the stock exchange The reason why Finance Minister Trygve Slagsvold Vedum can be so generous and generous is that the oil fund just keeps getting bigger and bigger. This is not only due to high oil and gas prices, but also to the oil fund’s winning streak on the world’s stock exchanges. And right here we are benefiting from the weak krona. But the oil money party comes with an aftertaste. Or hangovers that many of us may be familiar with. It gives the politicians a lot of money to spend, but is also very vulnerable. The share of the state budget that is financed by oil money is increasing to a level that does not make the shame of the characteristic uncomfortable. Only since 2008 has the share of oil money in the state budget increased from 7 per cent to now approaching 25 per cent. The luxury trap obviously does not apply to everyone. Ordinary people would sleep badly at night if such a large part of their daily expenses were financed by funds they knew would decrease and eventually end. You don’t need to have visited the Business School to know that if you don’t do something about either consumption or income, the road to the Luxury Trap is short. Moreover, there is a risk when such a large part of the national wealth is stock values, not oil on the seabed. Stock markets, as you know, go up and down, and we are less equipped for unrest and massive stock market falls. The government fulfills many short-term promises and expectations, but responds to a small extent to what they themselves believe are the biggest challenges in our country. Because there is one document that should tower over the national budget. The outlook report that was recently presented outlines the long-term challenges for the Norwegian economy. The “forgotten” main challenges Although it is signed by Vedum himself, he can only have used it to a modest extent as a guideline in the budget work. Because there are few signs that the government will do anything about what they themselves state are the country’s biggest challenges: Struggle for labor and getting more people into work. Need for restructuring and solving tasks smarter. Continue good distribution and pursue a responsible economic policy that provides fair distribution over time. The long-announced wave of elderly people has started to become noticeable. Fewer children are born, while we live longer. This means that fewer people are in work – both to finance the welfare state, but also to carry out the absolutely necessary jobs. This has already had drastic consequences in many municipalities, especially on the outskirts. Hospitals and nursing homes are struggling to find health workers, and the millions are flying fast in overtime and the hunt for substitutes. It is difficult to find powerful answers to how the politicians will meet this. There are no proposals for structural changes or road maps to make the jobs more efficient. On the other hand, they make many moves that contribute to a greater struggle for the workforce. Cheaper daycare and free core time in SFO are well received, but will obviously contribute to more people using the services. A natural consequence should be more employees in kindergartens and after-school education in the municipalities, and as you know, they don’t grow on trees. On the state budget, the record high sickness absence contributes to extra expenses in the billions range. Politicians are concerned, but to a limited extent translate their concern into action. Quite simply, efforts are being increased for labor market initiatives, which they have previously cut. They are increasing the tax-free card limit and cutting student loans in many district municipalities. It is nevertheless difficult to see that this is in any way in line with the formidable challenges of manning Norway. It will not be made easier by the fact that the government consistently refuses to touch sick pay. The Finance Minister’s dope You can’t see from the budget either that a plan has been drawn up to cure the dependence on oil money. To use the government’s own words: The long-term picture is that expenditure on the welfare state increases more than the total income. The imbalance can be covered through lower growth in public expenditure or higher growth in income. Hopefully, increased income will reveal itself, but there is nothing here that steers towards lower growth in expenses. On the contrary, a number of welfare services will be cheaper or free, whether it is kindergarten, after-school care, ferries or flights. These are expenses that will roll and go forward, and which will certainly please many. The problem is that it is difficult to see what is prioritized away or down. What should we spend less money on in the future? Or to quote the government itself again: Declining oil activity reinforces the need to use resources well and correctly. When Norway agreed on a large aid package for Ukraine, it was sold as a major priority that would put us to the test. Perhaps people were prepared that it would cost us something as a society. The bottom line so far is that we’ve got it in spades. Municipal finances are a source of horror and warning But the municipalities are experiencing precisely these days that nothing grows into eternity. Because the sudden crisis in the municipal economy should not come as a surprise. Because now there are many things hitting at the same time. “Waves” of both elderly and younger people in need of help and refugees from Ukraine put increased pressure on the services, and hiring warm hands costs many municipalities dearly. At the same time, most goods, interest and purchases have become more expensive. For many years, the municipalities have been saved by the fact that the tax income has been greater than expected, not unlike the oil fund which is constantly saving us. This has meant that many municipalities have pushed problems and necessary restructuring ahead of them. Many have also had funds and money on the books to eat away at. Now the good times are over, and all this is hitting the municipalities hard. And the citizens do not understand anything, because there is hardly a politician who has lowered their expectations or prepared them for tighter times. Perhaps the government has a plan to save the municipalities, but can they save themselves? It is in good times that one should prepare for the bad that may come. The government can boast of achieving a lot in this budget, but they are not up to the task. They are politicians after all. Published 07.10.2024, at 18.24
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A budget for the good times – Speech
