On Tuesday this week, Erna’s latest state budget will be presented. The experts are clear on one thing – it is not adopted.
– The special thing this year is that we can be absolutely sure that the budget will be changed twice more before it is adopted. We therefore have an exciting autumn in the meeting, with as many as three episodes of the state budget, says Silje Sandmæl, consumer economist at DNB, to TV 2.
– EXCITING AUTUMN: Sandmæl does not expect the big tax cuts in the budget that will be presented on Tuesday. She also announces a bitter budget negotiation this autumn. Photo: Heiko Junge / NTB
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At the beginning of November, the new Labor and Social Democrat government will present its supplementary bill to Tuesday’s state budget for 2022.
Get leaks
– There they will change the Solberg government’s budget, re-prioritize and find space for their political issues. Then they will negotiate an agreement with SV towards the beginning of December. SV has signaled that the negotiations will be tough, says Sandmæl.
– The incoming Prime Minister Støre has said that he will not increase the tax level and not increase the tax for income below 700,000 kroner, she adds.
She points out that this year there have been some leaks ahead of the budget presentation, but not as many as usual.
These are some of the leaks:
Co2 tax and commuter deduction:
The Conservatives have leaked that the commuter deduction will increase for those who have a long journey to work to compensate for the increased CO2 tax that affects the price of petrol. It should happen in two ways:
- Undo the halving of the current rate from 50,000 kilometers. This means that the same rate applies regardless of travel length.
- Lower the deductible from the current level of NOK 23,900 to NOK 14,000 for people living in the 300 least central municipalities.
In isolation, the reduction in deductible means a tax relief of approximately NOK 2,200.
The Minister of Finance has confirmed that the Co2 tax will be increased (increased to at least NOK 1,000 / tonne is likely when you first do something with the travel deduction to compensate) Here you can speculate on how much the Co2 tax increases with effect on fuel price and whether a new government will keep increased commuter deductions, but reduce the fee.
Employment tax deduction for young people
The proposal was sent for consultation in June, and will include young people from 17-29 years. The deduction is a percentage deduction with a maximum ceiling (such as the minimum deduction) and is limited to earned income. Amount limits come in the 2022 budget.
In the example presented in the consultation memorandum, the deduction is set at NOK 23,500 with a reduction to an income of NOK 535,000. It gives NOK 5,170 lower tax if you can make full use of the deduction.
Housing benefit is increased by 71 million:
The government has announced a strengthening of housing benefits. Lower deductible and higher income limit for households with more than one person.
A couple with three children in Oslo who have a total annual income of 405,000 kroner, currently have a total housing allowance per month of 1,464. They will receive 2,956 per month next year.
The development assistance budget is increased by NOK 3.8 billion.
In addition, NOK 2 billion is set aside for a climate fund that will support conversion to renewable energy in developing countries.
Sources: NTB / Silje Sandmæl
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– Against all financial councils
Social economist and professor at NHH, Ola Grytten, calls this year’s budget presentation “surprisingly waterproof”.
– But what we do know is that the Prime Minister has said that it must be tightened. It will be the basis of the final state budget, no matter what. But then the new government must show that they do not want to tighten as much. They will do this against all financial advice.
Grytten points out that the government has been very generous in spending money during the corona pandemic. Interest rates have been low and the Norwegian economy has gone so that Norway lacks labor.
– To start in full swing, when we almost lack production capacity, it will be wrong.
– AWAY WITH THE SPANDER TROUSERS: Ola Grytten believes that next year’s state budget must be tightened considerably after a period of high public spending Photo: Marit Hommedal / NTB
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Yesterday could VG write that the Labor Party and the Socialist People’s Party have agreed to extend the corona crisis schemes until the New Year. Grytten is critical and believes it is really time to tighten the crisis packages.
– There are very few economists who support that decision. The corona crisis in the Norwegian economy is over. It is not good economic policy – to support companies for downsizing while spitting out money.
– Over log and stone
Grytten believes that districts and agriculture in particular will be big winners when the final budget is set. The tax policy will naturally also change.
– Otherwise, there is little you can do in such a short time. 98 percent of the budget is set. We they move on 30 billion, so it’s surprising. It is mostly about bringing in symbolic politics where possible.
Grytten says it will be interesting to see how the Labor Party and the Center Party proceed in the negotiations in the Storting, how willing the SP is to negotiate with SV and how they will balance the budgets with the tax policy into three blocks.
– The negotiations will be very tough. But one of the positive things about politics is that the parties are breaking their election promises. Had they not done so, the spending of money would have gone over stick and stone. So we can really hope they break many promises, says Grytten.
– Does not save the large sums
Elleville electricity prices have perhaps been the biggest concern for Norwegian wallets this autumn. Sources in the government apparatus have confirmed to DN that the electricity tax will be cut by 1.5 øre, due to the recent high electricity prices.
Cecilie Tvetenstrand, consumer economist at Storebrand, says there is little reason to rejoice over cuts in the electricity tax.
– EXCITED: Tvetenstrand is excited about what the incoming government will do with the BSU scheme, IPS (individual pension savings) and share savings account. Photo: Frode Sunde / TV 2
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– It is such a small tax cut that it does not save the large sums. With today’s electricity prices, it is likely to save 300-400 kroner a year. Consumers here must rather look for suppliers who can provide the cheaper electricity agreements, in addition to cutting electricity consumption where possible.
The Labor Party’s energy policy spokesperson, Espen Barth Eide, has stated to TV 2 that they “will look at whether the electricity tax can be limited at price peaks, but have not yet concluded that”.
Sp leader Trygve Slagsvold Vedum has mentioned high electricity prices to one of the main issues in the process around the state budget for 2022.
– Here I think that the new government has promised more than they can keep. They will probably say that they start small and that they must return to measures that will reduce electricity prices, says Grytten, and asks Norwegian consumers to be patient.
Good news for families
At the same time, Tvetenstrand announces good news for families with young children.
– The Labor Party and the Socialist People’s Party have announced that they want an upgrade in the SFO scheme with free offers for all 1st graders. Here, there can be several thousand to save a month for this group.
In addition, the Labor Party and the Socialist People’s Party will stop the anti-social cuts that the bourgeoisie has implemented in recent years.
– It says a lot about how unsustainable it is to live with this
– This includes possible reintroduction of holiday pay on unemployment benefits, support for orthodontics, spectacle support and support for people with gluten allergy.
Tvetenstrand mentions several austerity schemes to which the incoming government has not given a clear answer.
– Government raised in the state budget for 2021 possible annual savings in BSU to 27,500 kroner. The Labor Party will lower back to 25,000 kroner, while the Socialist Party wants to strengthen the scheme. There is good reason to believe that the current scheme will stand.
– At the same time, it is very exciting to see what happens with IPS and share savings account. These are savings schemes that many people today use, so it is important to continue saving if these are changed.
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