Norway’s new centre-left government set out its 2022 budget proposals this morning, revealing a plan which sticks with the same level of spending from the country’s sovereign wealth fund as the the previous leaders, despite its promises of lower taxes for “ordinary” people.

Minister of Finance Trygve Slagsvold Vedum, of Norway’s Centre Party – which is in a minority coalition with the leftwing Labour Party – set out the 2022 fiscal plans as an amendment to the 2022 fiscal budget proposal announced last month by the outgoing government of Conservative Party Prime Minister Erna Solberg.

Labour Party Prime Minister Jonas Gahr Støre took office on 14 October following election success in September.

Vedum, who leads the Centre Party, said today: “With this budget ordinary people will notice that we set at new course for Norway. Taxes will be reduced, and we take measures to improve everyday life for low and middle-income groups throughout the country.

“We are pointing out a new and fairer course for the whole country,” he said.

The Labour/Centre government said its revised budget “maintains the same structural non-oil deficit as presented in the National Budget 2022 on 12 October”.

The structural non-oil fiscal deficit – the amount of the Government Pension Fund Global (GPFG) that the government intends to use to finance the budget – remains at NOK322.4bn (€32.7bn) in 2022, down from NOK406.8bn in 2021.

The planned 2022 spending from the GPFG is down nearly a fifth from the previous year – when spending was high due to COVID-19 economic policy measures – but it is still the third largest annual withdrawal in the SWF’s history.

Trygve Slagsvold Vedum - Norway minister of finance

Trygve Slagsvold Vedum

The Finance Minister announced today that the new budget proposal marked a new course for tax policy.

“Those with high incomes and high net wealth will contribute more, while take-home pay will increase for those with annual earnings below NOK750,000. The government proposes to reduce indirect taxes by NOK2.3bn compared with the Solberg government,” he said.

According to the announcement, the price of car fuel is to come down in Norway, but the government also said it was strengthening incentives to use biofuels and favoured gradual escalation of taxes on CO2 emissions that were not part of the European Union Emissions Trading System.

Vedum said the new government was relying on income from taxes to provide people with high quality services throughout the country, but that the wealthy should take more responsibility, while life should be made easier for ordinary people.

”The tax levied on electric power supply will be reduced, deductions for commuters will be increased, ferry prices will be lowered as will the maximum price for child care programmes,” he said.

Meanwhile, the revised budget also included a rise in the wealth tax, the tax on dividends and the bracket tax for the highest earners, he said.

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