Press release | No: 24/2020 | Date: 03/04/2020
The Government today proposed additional financial measures to soften the impacts of the coronavirus outbreak in Norway. The newly submitted measures are directed at industries, companies and certain groups that have been particularly hard hit during the pandemic and are inadequately covered by the measures previously adopted.
The Government is taking a three-phase approach to financial measures related to the coronavirus outbreak. In the first phase, the Government and the Storting introduced targeted measures to quickly meet acute financial challenges: securing income for workers and liquidity for companies to avoid mass dismissals and bankruptcies.
We are now in phase two. In this phase, the Government has proposed specific measures aimed at industries, companies and certain groups that have been particularly hard hit by the virus and the associated COVID-19 disease. Such measures include, among many others, a compensation scheme for companies severely affected by the outbreak and an extension of the guarantee scheme for loans to small and medium-sized businesses.
‘The powerful package of measures we are presenting today will help those who so far have not been well enough compensated. The measures are aimed at the many companies that have suddenly lost a large part of their income, apprentices who are temporarily laid off or lose their jobs, students who lose part-time jobs and people who need to build up their skills for when the crisis is over,’ said Minister of Finance Jan Tore Sanner (Conservative Party).
‘The measures we have adopted and proposed will ensure a greater degree of compensation for persons temporarily laid-off or unemployed as well as students, apprentices and self-employed persons. We are also ensuring liquidity for start-ups and for small, medium-sized and large companies. In addition, the enterprises most affected will receive compensation for a proportion of their fixed costs,’ said Mr Sanner.
In phase three, the Government will consider broader measures to increase economic activity when the virus outbreak subsides and infection control measures are scaled back.
‘We are continually analysing the situation and closely monitoring the effects of the measures already being implemented. We are studying different scenarios of how the economy is likely to develop going forward and will propose measures as needed in the months ahead,’ the Minister of Finance said.
Key measures in the latest Proposition to the Storting:
- Compensation scheme for enterprises with reduced income due to the coronavirus – NOK 50 billion (announced 27 March, submitted 3 April)
The Government proposes that enterprises with at least a 30 per cent drop in revenue as a result of the virus outbreak should be eligible for government support. The amount of support will depend, among other things, on the amount of lost revenue, the size of the enterprise’s unavoidable fixed costs and whether the enterprise has been ordered by the government to close.
- Help for students who have lost work income – NOK 1 billion (Storting resolution, new proposal)
The deadline to apply for loans and grants from Norway’s State Educational Loan Fund has been extended to 15 April, and the semester’s remaining financial support to students will be paid out in April. In addition, students who have lost income may apply for a supplemental loan of NOK 26 000. The Storting, in connection with its consideration of Prop. 67 S (2019-2020), has allocated NOK 1 billion to convert some of that supplement loan money into a grant. Applicants who confirm that they have lost income and can document their loss at the request of the Loan Fund will be able to convert NOK 8 000 into a grant.
- Temporary benefit for apprentices – NOK 250 million (Storting resolution, new proposal)
The Government is following up the Storting’s petition to introduce a temporary scheme providing apprentices with compensation equivalent to apprentice salary in case of unemployment or temporary layoff. A temporary scheme is therefore being established to give apprentices compensation equivalent to 100 per cent of salary up to 1.5 times the National Insurance Scheme’s basic amount (G), and 62.4 per cent of salary between 1.5 G and 6 G, with ‘salary’ being the apprentice’s salary upon temporary layoff or termination of the apprenticeship. For 3 G of income this will provide a compensation rate of just over 80 per cent. It is assumed that the scheme will cover about 5 000 people who will receive the benefit for an average of three months. The scheme includes both laid-off apprentices and others who lose their jobs. The Government proposes an allocation of NOK 250 million.
- Compensation for reduced parental payment to after-school care (SFO) – NOK 1 billion (new proposal)
Parents will not be paying for day-care or after-school care (SFO) while the programmes are closed as a result of infection control measures. As things now stand, day-care centres and after-school programmes are to be closed from 13 March to 13 April. The Government proposes to compensate day-care centres and after-school programmes for the loss of parental payment. The Government therefore proposes to increase transfers to municipalities by NOK 1 billion. The Government also proposes setting aside NOK 10 million for an application-based after-school care programme at publicly funded schools and NOK 0.5 million for the Longyearbyen Community Council. Compensation for parental payment shortfalls and ordinary support will be reduced if employees are temporarily laid off or if parental payments already received are not refunded.
- Skills development measures – NOK 190 million (Storting resolution, new proposal)
The Storting has allocated NOK 150 million for this purpose. The Government is now proposing how to distribute this allocation and, furthermore, to set aside an additional NOK 40 million for the measures within the applicable allocation. The purpose is to improve the skills of unemployed and laid-off persons. The package includes six new three-part business sector programmes for skills development, upscaling of existing digital services, and rapid admission to existing university and university college programmes. There are additional funds for basic skills training for unskilled persons in hard-hit industries. The Storting has also allocated NOK 250 million to the framework grant for county administrations with a focus on skills-development measures, including internal company training, upper secondary instruction and vocational schools, under county administration auspices.
- NOK 3 million to simplify home-based instruction (new proposal)
In order to support the high level of effort and commitment around Norwegian schooling, the Ministry of Education and Research is establishing a temporary grant scheme to fund initiatives that support home-based learning services in connection with the coronavirus crisis. To qualify, such services must have no commercial purpose. The grant scheme will be searchable and is to be run under the auspices of the Directorate for Education and Training. The Government proposes setting aside NOK 3 million for this scheme within the applicable allocation.
- Coronavirus information for immigrant groups – NOK 6.6 million
The Government is providing NOK 6.6 million in grants for integration efforts directed by voluntary organisations. The money is to be distributed to the Red Cross, Caritas, Norwegian voluntary centres, the Norwegian Women’s Public Health Association, KIT (Kristent Interkulterelt Arbeid) and Norwegian People’s Aid. The Government proposes setting aside NOK 3 million for this purpose within the applicable allocation.
- Temporary purchase of basic rail transport services – NOK 550 million
Due to reduced travel activity, ticket revenues for the railway companies have dropped significantly. The Government proposes NOK 550 million to accommodate the possibility of temporary supplementary agreements between the central government and the railway companies to maintain basic train service for work trips.
- Deferred taxes affecting the brewery industry in particular – NOK 14 million (Storting decision, new proposal)
Payment of the alcoholic beverage tax, non-alcoholic beverage tax and beverage packaging tax will be postponed to 18 June 2020 from 18 April and 18 May, respectively. This measure will improve the liquidity of businesses subject to the taxes.
- Deferred taxes affecting the fuel industry in particular – NOK 18 million (Storting decision, new proposal)
Payment of the CO2 tax, road tax on fuel and basic tax on mineral products will be postponed to 18 June 2020 from 18 April and 18 May, respectively. The proposal will improve the liquidity of businesses subject to the taxes.
- Temporary CO2 tax exemption on natural gas and LPG – NOK 40 million (Storting decision, new proposal)
The CO2 tax on natural gas and LPG delivered for chemical reduction or electrolysis, metallurgical and mineralogical processes is set at NOK 0 with effect from 1 April 2020. The reduced rate applies to both regulated and unregulated activities under the Emissions Trading System (ETS), and will reduce costs for the relevant processing industry enterprises – about 40 of them altogether. The aim, consistent with the Storting resolution, is to gradually raise the tax rates again in advance of 2024.
- The horse racing tax (totalisatoravgift) is suspended for 2020 – NOK 100 million (new proposal)
As a consequence of the coronavirus situation, horse racing events in Norway have not been allowed since 12 March. This has led to a decline in Norwegian Rikstoto’s revenue, which in turn could lead to reduced support to the Norwegian horse industry. In order to keep the horse racing tax from limiting Norsk Rikstoto’s ability to distribute support in 2020, suspension of the tax is proposed for 2020 with effect from 1 January 2020.
- Expansion of the loan guarantee scheme for small and medium-sized enterprises (adopted April 2)
Under the guarantee scheme for loans to small and medium-sized businesses, which was opened for use last Friday, the central government guarantees 90 percent of each bank loan. The Ministry of Finance yesterday adopted regulations that also allow larger companies to use the scheme, including companies with more than 250 employees.
- Temporarily laid-off employees with private occupational pension schemes (new proposal)
The Government proposes temporary legislative amendments enabling employers to decide that employees being temporarily laid off can continue as members of the pension scheme. The amendments would apply to private sector employers whose employees are currently removed from the company’s pension scheme if they are temporarily laid off as a result of operating cutbacks, etc. The employer may choose whether laid-off employees are to retain the pension scheme’s insurance cover. Temporarily laid-off employees who are not permitted to retain insurance cover will be entitled to take out individual insurance (continuation insurance). The employees will in any case receive the benefit of the employer’s paying for administration and management of the employees’ pension funds as long as they are members of the scheme.
- NOK 20 million for the reindeer industry grazing crisis
The crisis is due to deep snow and ice covering grazing lands and preventing the reindeer from obtaining sufficient food by natural grazing. During negotiations on the reindeer herding agreement for 2020/2021, the industry’s emergency contingency fund was increased by NOK 10 million as a result of the serious situation. The crisis has persisted, and applications submitted to the emergency contingency fund have exceeded the fund’s balance. If no action is taken, a large number of animals may die of starvation. The funds will be used to pay for crisis measures such as procurement and transport of supplemental feed.