– When we sat here last year, we thought we were heading into rough seas with lots of waves and expected that 2023 would be a rough year. There are still big waves, but our assessment is that it will be calmer next Christmas than it is now. It will be more comfortable for people, says Trygve Slagsvold Vedum (Sp) to NTB.
– We believe that next year will be a better year than this year, he adds.
Norway has been through a year that has been demanding for people’s private finances. During 2023, Norges Bank has set the key interest rate by 1.75 percentage points to 4.5 per cent, which is the highest since autumn 2008.
Gjeng’s mortgage interest rate is now below 6 per cent – and then the last two interest rate increases have not yet seriously affected households’ everyday finances. The banks have a six-week notice period. The last interest rate increase earlier in December will not be felt by everyone until February.
And price inflation has remained high throughout the year – so high that even a wage settlement of more than 5 per cent was not enough to ensure people’s increased purchasing power.
– 2023 is a year we will read about in the history books, states the Minister of Finance.
People can afford less
A few hours before Vedum sat down with NTB, fresh figures came from Statistics Norway showing that Norwegian households had a decline in real income of 1.4 per cent last year. At the same time, the number of people with a low income increased by 18,600 from the previous year.
This has happened on Vedum’s watch. And as we approach the end of 2023, we can assume that the trends from the previous year will apply this year as well.
– This is demanding for many, especially for families with children who have many expenses and a number of elderly people who have low incomes. That is why we have prioritized those groups in particular. But the most important thing is to bring down price inflation, keep people in work and ensure that it is possible for companies to provide wage growth that makes people feel that they once again have a little more financial breathing room, says Vedum.
He and the prime minister have been talking on and off throughout the autumn and winter about the measures being put in place to make the animal life a little less burdensome for ordinary people: Cheaper daycare, better child benefit, expanded SF0 offer and increased rates on a number of allowances and support schemes .
The pensioners have received a historically good settlement, and the farmers have received an agricultural settlement that has been unmatched in recent years.
– What we have done in terms of tax has disappeared a bit, but eight out of ten have received lower or equal tax with us. The 5–10 per cent who have received the biggest tax increase may have felt the most, but the broad group has received less tax, says Vedum.
Would have had better power support
But the electricity subsidy scheme for most people only became good enough in the autumn. In retrospect, Vedum admits that he would have liked to have had the current arrangement right from the start.
In the first scheme that was adopted in 2021, the state took 55 per cent of the bill for prices that on a monthly basis exceeded 70 øre per kilowatt hour on average. Today, the scheme is hourly and covers 90 per cent of electricity prices above 70 øre per kilowatt hour.
– When we introduced a reinforced system during the Ukraine war, we thought that this would be a short-term fluctuation. The model we have made now is much more powerful than the one last winter. But it was completely new. You had never made anything like this before. The hourly model we have now is better and makes it more predictable for people, says Vedum.
He himself grew up in the late 1980s and early 1990s, which was a period of both high price growth and high interest rates. Then unemployment was also very high, which “created a lot of problems”. Now Vedum insists that he works every day to make everyday life easier for people.
– The economic policy is only about getting through this period as safely and quickly as possible, so that people’s everyday finances can improve, he says.
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Demanding political year
The year has also been demanding politically for Vedum. Two years after the party entered government, support has halved and in the municipal elections this autumn, the party was severely punished by voters in areas that were affected by locally unpopular decisions – such as the electrification of Melkøya with electricity from land and the introduction of ground rent tax for the aquaculture industry.
– My main job is to create security in Norway, and we have made some choices that may not currently be profitable. But I believe that what we do in terms of national control, making sure to strengthen defenses and making sure that we equip Norway to withstand slightly rougher waters around us is important, says the finance minister.
Despite prolonged and loud protests from very strong forces in what is one of the pillars of Norwegian business, the governing parties obtained sufficient support for the scheme to be adopted in early summer.
– I knew there would be noise, because we were challenging quite capital-strong forces, but when it is completed it will be a treasure that will stand there for a generation. And next year, people will feel the upside of that, including lower nursery prices, says Vedum.
A few days before Christmas, the Center Party leader went home to Hedmarken for the Christmas holidays. During some much-needed days off, Vedum will eat ribs, fire in the fireplace and enjoy the latest additions to the family for the time being: four six- to seven-week-old puppies.
– Mixed breed. Lots of poodle in them. It’s a nice group, smiles Vedum.
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2023-12-26 08:47:38
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