The FRP and the Center Party wanted even more favorable tax measures than the final oil tax package allowed. The Liberal Party’s Ola Elvestuen describes “a violent drive” to drag the scheme as far as possible.
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VG could Thursday tell how Kjell Inge Røkke warned Jonas Gahr Støre that it could lead to the closure of Aker Verdal, if there were no temporary changes in the oil tax.
Two months later, the Labor Party, the Conservative Party, the Green Party and the Socialist People’s Party joined forces for a lucrative oil tax offer, which Erna Solberg has subsequently called a “error”.
VG can now tell new details from the negotiations in the Storting.
According to SV’s fiscal policy spokesperson, Kari Elisabeth Kaski, the lucrative solutions were driven by the Social Democrats and the Green Party – and accepted by the Conservatives and the Labor Party.
– There were no boundaries in the negotiating room. It just escalated. There were no good arguments for that either, because the oil price had already started to rise again, says Kaski to VG.
The Liberal Party’s Ola Elvestuen describes it as follows:
– It was a violent drive. Not to find the right level, but to drag it as far as possible. Our job was to hold back, so that it did not become too favorable, says Elvestuen to VG.
The oil tax package, which was later adopted, has been criticized by, among others, SV, MDG and the environmental movement because they believe it facilitates more oil extraction at a time when Norway has committed itself to cutting climate emissions.
Several developments are already underway, which means that oil and gas production in Norway will increase in the coming years.
–Outbid each other
It happened so fast.
This is what politicians from several parties say about the negotiations in the Storting. All parties except Red and MDG participated.
It was when the negotiation revolved around changes in the tax-free income, that it really took off, according to SV’s Kaski.
The tax-free income is a compensation the companies receive for the money they invest when they develop new oil discoveries. The higher the tax-free income, the less the companies must expect to earn on the oil in order for it to pay off to develop a new field.
The government wanted to tighten free income and halve it from 20.8 to 10 percent.
–The industry would largely continue as before, with 20.8 percent. The parties in the Storting ended up with increase the tax-free income to 24 percent. They provided real tax breaks, and more than the industry had asked for in tax-free income.
How could that happen?
– There was no doubt that there was a strong dynamic in the negotiations, driven by the Center Party and Frp. The tax-free income that was on the table only increased and increased. It was not stopped, says Kaski.
She and SV withdrew when it became clear that the parties agreed to go past 20 percent. That limit was reached on June 2.
– One had gone from sense and collection and completely lost control. I was very surprised that especially the Labor Party and the Conservative Party did not oppose, as two responsible parties, says Kaski.
This is what the parties wanted
The negotiations are basically closed. VG has seen documents from several parties in the negotiations, which show what the various parties demanded.
The documents show that the parties sat in the negotiating room and studied what free income was needed, so that two oil projects in particular would be profitable enough for the companies to expand:
One was Wisting, which is owned by Equinor. The second was NOAKA, a cluster with several oil discoveries for which Aker is responsible.
- At one point in the negotiations, the FRP proposed a tax-free income of 26.8 per cent, that was what was required to make Wisting and NOAKA profitable. At this time, the government had put on the table a proposal of 15.5 percent.
- The Center Party was willing to go all the way to 30 percenton a par with the tax-free income in 2012.
- The government also moved from its original proposal, to 18 percent.
E24 also reported when it was stated that Frp and Sp asked for more.
On June 8, the conclusion was clear: The result was a tax-free income of 24.8 percent.
–The tax-free income was one part of the model that was discussed. VG’s sources emphasize that the parties’ positions are snapshots.
The Center Party and the Green Party initially wanted other solutions, such as giving free income on corporation tax and how long the scheme should last. The Conservatives and the government warned against this.
It was the Conservatives who insisted on the model that was adopted, writes FRP leader Sylvi Listhaug in an e-mail to VG.
The Conservatives protected the corporation tax because they feared that other industries would demand the same.
–– Relief
Listhaug does not directly answer whether they adjusted the tax-free income to make Wisting and NOAKA profitable. She says that they still supported the model because it could save jobs.
She says that there would be no tax breaks for the oil industry if FRP’s solution was chosen.
Listhaug responds to Kaski’s criticism as follows:
– For Frp, it was a great relief when SV disappeared from the negotiations. A party that wants to close down the Norwegian oil and gas industry basically had nothing to do in those negotiations, Listhaug writes to VG.
SP leader and Minister of Finance Trygve Slagsvold Vedum says that it was a goal to save the shipyards and the oil service industry.
He does not want to comment on Sp’s negotiating position.
– I think we came together to a good result, he says.
–Defends the oil tax package
Prime Minister Jonas Gahr Støre says that he had regular contact with Aker, also in the final phase of the negotiations.
He says that it was important to check how the package would turn out for the companies.
– When the pandemic hit, there was a great danger of job losses and skills in the industry. At that time, no one knew that the oil price would rise as fast as it has done, but the package the governing parties Conservatives and Liberals, as well as the Labor Party, the Socialist People’s Party and the Green Party agreed on, helped keep activity up and saved many jobs, Støre writes in an e mail to VG.
– When the crisis package had begun to work, it was important that an industry that employs a large number of people in Norway and that had been through large fluctuations, could relate to a predictable framework.
–– Less extensive
The then Prime Minister Erna Solberg says that there was a need for improvements in the oil tax.
To NRK she said on Monday that the scheme was too generous.
– The government and the Conservatives thought there was a need to make improvements in the oil tax to prevent activity from stopping, but we promoted less extensive changes than what was finally adopted, Solberg writes in an e-mail to VG and adds:
– The negotiations between the parties on the oil package took place in the Storting, and I did not participate directly in them. I also did not talk to the companies during the negotiations.
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