Finance minister reaps benefits of windfall income
(Aftenposten)
Extra income has made it easy for
Finance Minister Per-Kristian Foss to make room for additional
expenditures in the Revised National Budget. Mr. Foss has wrapped
up the budget with nearly NOK 7 billion in tax revenues which were
unknown to him just a few months ago. The opposition feels Mr. Foss
has had it easy, but is unlikely to make things any more difficult
for him. Nonetheless, the budget is likely to grow further before
it passes the Storting.
The high price of credit in norway
(Dagsavisen)
Finance Minister Per-Kristian Foss
acknowledges that his budget will certainly not bring interest
rates down. His view of Norwegian interest rates, however, is that
they are just fine where they are. His budget elicited no more than
a shrug of the shoulders from the money market yesterday. Brokerage
houses have already predicted a one-half per cent rise in interest
rates this autumn, and they are not inclined to change this figure.
A few years ago, politicians were overbidding each other in their
efforts to promise the voters interest rate cuts, but interest
rates in Norway are now twice as high as in the euro zone.
Municipal disappointment in finance minister
(Nationen)
There is a deep current of
disappointment running through the reigning coalition’s mayors over
the fact that Minister of Finance Per-Kristian Foss (Cons.) has
left municipal industrial support funding out of the Revised
National Budget. The municipal sector is receiving an additional
NOK 900 million, but the Government’s message is clear: "The
central government will not cover the deficit run up by the
municipalities," says Mr. Foss.
National spending spree in store (Verdens
Gang)
Personal incomes will rise faster
than prices this year. According to the most recent estimates from
the Ministry of Finance, wages will go up five per cent, but prices
only 1.4 per cent. This translates to over 3.5 per cent real gain
in private spending power. Most of us will be better off in the
short term, but the threat of higher interest rates is looming in
the background.
Foss exploring sick pay cuts (Vårt Land)
Sick leave has risen steadily for
many years in Norway. A billion krone rise in sick pay expenditures
has Finance Minister Per-Kristian Foss looking for ways to change
the sick pay scheme. "We may have to do something about this in the
2003 budget," he says. Unions and employers made a deal with the
government last year to bring sick leave down in an effort to save
the benefits scheme from cuts.
Labour blocks day-care ceiling (Aftenposten)
The Socialist Left and the Progress
Party joined forces on a proposed NOK 1500 cap on day-care fees,
but it is now clear that the bill doesn’t stand a chance without
the support of the Labour Party. Labour puts full day-care coverage
ahead of lower costs to parents. "We cannot support a move that
will provide cheaper day care for a few," says Hill-Marta Solberg
(Labour), whose parliamentary group had agreed to negotiate the
issue with Progress and the Socialist Left.
SMS market hits nok 1.5 billion (Aftenposten)
The market for messaging, ringing
tones and logos has exploded. Norwegian cell-phone customers paid
NOK 1.5 billion for these services last year, and it’s likely to
get worse – or better, according to one’s viewpoint – say industry
analysts, who estimate that the market for SMS services will reach
NOK 3 billion in 2005.
Worth noting
- Finance Minister Per-Kristian Foss (Cons.) has dished out
nearly NOK 6 billion to good causes in the Revised National Budget.
This has Labour worrying about rising interest rates, while the
Progress Party is calling for more.
(Dagsavisen)
- The Revised National Budget has little to offer the average
citizen. Nonetheless, 2002 will be a good year for most of us,
financially speaking.
(Dagbladet)
- The Gender Equality Ombud urges young women to lie if they are
ever questioned about family planning in job interviews. Honesty
could cost them the job even if their chances otherwise are good.
(Aftenposten)
- The Progress Party wants a full account of travel, car, office,
entertainment and other expenses covered by Norwegian contributions
to the Peres Centre for Peace. In a draft letter reeking of
distrust of Terje Rød-Larsen and his wife, Mona Juul, Carl I. Hagen
is asking the Storting’s Standing Committee on Scrutiny and
Constitutional Affairs to take up the matter with the Ministry of
Foreign Affairs.
(Aftenposten)
- NOK 170 million in funding granted by Norway to the Palestinian
Authority has contributed to the financing of terrorism, according
to Israeli allegations.
(Aftenposten)
- It will be cheaper to have a company car if the Government
accepts Progress Party support in its efforts to get the Revised
National Budget through the Storting. Removing last year’s tax
increase on the use of a company car is high on the Progress
Party’s list of priorities.
(Dagens Næringsliv)
- Since going public, Statoil has paid nearly NOK 24 billion in
taxes. The company’s tax rate in the first quarter this year was 72
per cent.
(Aftenposten)
- Spanish shipyard Izar has fulfilled 33 per cent of its
countertrade obligations to Norwegian industry under its frigate
contract with the Norwegian navy. Norwegian subcontractors have
supplied NOK 10 billion worth of technology to the project so far.
(Dagens Næringsliv)
- Four Norwegian F-16 jet-fighters have been modified to attack
ground targets, at an expense of NOK 564 million. Norway will send
these planes to Kyrgystan.
(Klassekampen)
- Another four hotels in Trondheim have been taken out on strike,
and another two will be taken out on Sunday. This will leave few
rooms available to guests coming to the city for the upcoming
wedding of Princess Märtha Louise and Mr. Ari Behn. Workers at 16
new establishments walked off the job today. 3,480 workers at 100
establishments are now on active strike.
(Aftenposten)
Today's comment from Vårt Land
The government’s well-filled money
bin has given politicians the means to meet many challenges and
grant tax relief as well, though never as much as they would like
to. But it’s about time they admitted that as long as they are
spending Norway’s oil revenues liberally, the low interest rates
hoped for by most people will be out of reach. We reckon that the
Government has the economy so well under control that the budget
bill is not likely to induce the central bank to raise key rates.
But neither is there anything in the bill to nudge interest rates
down. Given the fact that the entire Storting also agrees that more
oil revenues should be spent every year, the outlook for lower
interest rates in the near future is dim indeed. As matters now
stand, today’s young families with heavy new mortgages cannot count
on any drop in interest rates until the baby-boomers have spent the
Petroleum Fund financing their pensions.
