A strong dissatisfaction with the current government is spreading in Norwegian business. A recent survey conducted by NHO, Finans Norge, Virke and the Shipping Association among its members is shockingly bad. There are two things that are particularly worth noting: Over 80 per cent of those questioned believe that the government pursues a policy which takes the needs of companies very little or to a small extent into account. Over 70 per cent say they will have a reduced operating result as a result of the proposed state budget. It is a powerful diet. The figures document something we have suspected for some time now: Norwegian companies feel neither heard, seen nor perhaps most importantly: appreciated by the current government. Tax and rhetoric The reasons are complex, but a lot is about tax – while a part is probably about rhetoric. Let’s take the rhetoric first. The autumn has been characterized by a juicy debate related to taxation of “the rich” who must “contribute more to society”. One side of the debate deliberately uses words such as “industrial builder”, while the other side goes for good, old-fashioned “king”, “nobility” or “baron”. Has Kjell Inge Røkke, wealthy and industrial builder, been chased out of the country by people who do not understand what he has actually contributed? Kjell Inge Røkke, wealthy and industrial builder. Photo: Lise Åserud / NTB Or is he an ungrateful miser, blind to the fact that the values he has created would not have been there without our society based on trust, good framework conditions and a highly educated population? Barons and industrial builders Are the salmon suppliers along the coast just billionaires who most resemble barons and nobility? Or are they also industrial builders who contribute both jobs and important income to the local communities? And what about the grocery chains? Are they now really aware that prices are rising, and taking advantage of the situation? Or are they bleeding, because electricity prices are higher, transport is more expensive and manufacturers are raising prices disproportionately? The matter is not improved by the fact that Rema 1000 heir Magnus Reitan transfers most of his assets to two children in Switzerland. Then it’s not too bad for him – is it? Magnus Reitan transfers values to the children in Switzerland. Photo: Lars Erik Skjærseth / news There is no contradiction between being rich and building industry, but the way these people are portrayed – both by politicians and in the media – is probably part of the reason why business is now so disappointed with the government. They feel stepped on, and do not recognize themselves in the descriptions. Powerful tax package Then there is this with taxes. In the state budget, the government came up with a number of proposals that increase taxation on business. Among the most talked about packages is a tax package for natural resources. The government will introduce ground rent tax on aquaculture and wind power. At the same time, they increase the tax rate for hydropower, and introduce an extraordinary tax on hydropower and wind power. In this way, the government will increase the amount in the tax coffers by around NOK 33 billion annually. In addition, there is a proposal for an additional employer’s tax of 5 per cent for wages over NOK 750,000. In real terms, this tax will affect salaries far below 700,000, because pensions and other benefits are also taken into account in the calculation. Then we begin to approach what is an average wage level in Norway. An increase in wealth tax is also proposed, which also contributes to increasing the tax burden on business. Could be even bigger All this increased tax must first go through the Storting, where the governing parties, the Labor Party and the Center Party, are dependent on budget mate SV to get it through. The last word has thus not been said, but there is no reason to believe that there will be less tax pressure when SV gets to participate in the decision. Finance Minister Trygve Slagsvold Vedum and Prime Minister Jonas Gahr Støre. Photo: Terje Bendiksby / NTB That the government needs to get more money from somewhere is not so surprising. We know that expenses for pensions, among other things, will increase sharply in the future. There will be fewer taxpayers behind each pensioner in the coming decades. Nevertheless, it is easy to understand the anger that is now coming from the business world. The tightening has come suddenly, and with great force. It may sound boring, but predictability is and will be the most important framework condition when running a business. Political risk The survey also reveals that “foreign investors now consider Norway to be a more uncertain country to invest in”, and that there is now a political risk associated with investing in Norway. We have heard that argument from the business community many times before, without having seen any particular change in foreigners’ appetite for putting their money in Norway. However, there are many indications that it may be different this time. Unnecessary enemy image Politics can also contribute to creating an unnecessary enemy image between the private and public sectors. Those who give and those who take. The week the national budget was presented, many people shared this tweet from interest rate analyst Pål Ringholm: “What, are taxes going to go up by +40 billion from the business sector? And of course the special Norwegian wealth tax will go up, again. To have! It is probably because we have such a small public sector that it is absolutely impossible to cut back on it. No, wait a bit…” Attached was a picture of a bar chart showing the proportion of workers in various countries who are employed in the public sector. Norway won clearly with over 30 per cent, far above the OECD average of well below 20 per cent. Uncharted waters The Norwegian economy is heading into uncharted waters, with strong price growth and increased interest rates. Perhaps there is an economic setback lurking in the countries we trade with. That the business world is experiencing a particularly great uncertainty now is quite real. So to the main question: Does the government hate business? No, of course not. But they have made many in the business world feel exactly that way, and that is not particularly fortunate. Norway needs business. Then it might be wise for the government to speak up to a greater extent, and not down business. At a time when expenditure on the state budget is only going to increase in the future, little good comes of having a business community that feels hurt – regardless of whether the feelings are justified or not.
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Does the government hate business? – Speech
