NORWAY - The Norwegian government plans a net transfer of NOK308bn (€36.5bn) to the Government Pension Fund - Global in 2007, according to the budget announced today.

The Ministry of Finance estimates that the fund - the former Petroleum Fund - and its domestic counterpart will grow to a combined NOK2.2trn (€271.5bn) by the end of next year.

The government would also "closely" assess recommendations to increase the global fund's 40% allocation to equities.

The ministry said it has received recommendations from Norges Bank and the Ministry's Advisory Council on Investment Strategy to increase equities to 50% or 60%.

There is a tender on the ministry's web site seeking a specialist to advise on real estate investing for the global fund.

"The Ministry of Finance of the Norwegian government wishes to enter into an agreement with a specialist in real estate fiancé on the preparation of a report on special issues related to investments in real estate by the Government Pension Fund - Global," it states, adding delivery would take place in November 2006-January 2007.

The budget also revealed the government plans to "curtail" tax-friendly pension savings schemes in a bid to raise almost NOK500bn.

"As announced in the Revised National Budget 2006, the wealth tax exemption for individual annuities will be abolished, whilst the favorable tax treatment of new premiums paid on group annuities will be abolished with effect from January 1 2007," the budget states.

"The right to deduct new premium payments under individual pension savings schemes (IPAs) is abolished with effect from May 12 2006.

"The overall increase in tax revenue from these changes is estimated at NOK480bn accrued in 2007."