Finance Minister Sigbjørn Johnsen said holding back on oil spending safeguards the jobs in competitive businesses and strengthening government welfare provides value creation and growth for future.
While growth in Norway’s trading partners are modest and uncertainty is large, the Norwegian economy continues to grow appreciably. The economy going into 2013 with less spare capacity than it looked for a half year ago. The increase is supported by high oil prices and low interest rates. Employment has grown faster than expected and unemployment is low. The combination of large budget deficits, high unemployment and low economic growth makes the situation difficult in many countries.
Johnsen also noted that government follows the guidelines for a gradual phasing in of oil revenues in the Norwegian economy. It contributes to the predictability and gives leeway to respond to unexpected events in the future.
On this basis, the Government adopts a nearly neutral budget for 2013, which means that the use of oil revenues grow roughly in line with the value in the mainland economy. The government’s proposed budget provides a use of oil revenues of over 125 billion next year. There is 26 billion under 4 per cent path and represents 3.3 percent of projected capital in the fund.
In the budget for 2013, one of the top prioritises is communications, research, public safety and emergency preparedness. – We improve the quality of community solutions by strengthening local economy and the health care sector, says finance minister.
Government plans a real growth in local government revenues of 6.8 billion NOK. This corresponds to 1.8 percent. Of the total increase is 5 billion NOK increase in taxable income. The allocations for road, rail and coastal purposes under the National Transport will increase by 3.4 billion in 2013. Government overfulfil plan framework for 2010-2013 by 1.5 billion.
The Government proposes that hospitals will actually get 1.95 billion NOK more for the operation. That means about 2 percent fully funded growth to patient care. The Government proposes to increase day care for dementia patients with 100 million NOK, and 88 million NOK to 1750 hour care places.
Government proposes 1.4 billion more for research. This gives a projected research of 27 billion NOK and an overall real growth of 32 per cent under this government. Arrangements are made for 3250 new places and construction of 1,000 new housing units. Basic training is strengthened with 483 million.
Government forces community safety and preparedness significant. The Government will ensure that the new rescue helicopters to be delivered in the period 2016-2020 and aimed at signing the contract in 2013. The government will increase funding for the current rescue helicopters so that emergency preparedness can be maintained until the new rescue helicopters are in place. It also proposes to increase funding for ICT within the police and to the employment of newly qualified police officers. Directorate for Civil Justice and the Ministry of Emergency strengthened.
Improved tax and fees reduced
The government keeps the tax pledge, so that the tax level remains at the 2004 level. It is not up to larger changes in the present tax system, but the government proposes significant improvements in some areas. Among other things, government reduces incentives to invest money in real estate by increasing the assessed values of commercial and secondary housing from 40 to 50 percent of the estimated market value.
At the same time the government proposes to increase the minimum allowance in property tax from 750 000 to 870 000. Thus, 50 000 fewer pay wealth tax in 2013 and the proportion of taxpayers who pay property taxes be reduced to 16 percent.