NORWAY – The Norwegian government has floated a re-design of the tax and pension systems in the face of an ageing society that will see a surge in pension expenditures as a share of GDP.
“The design of the tax and pension systems are central to increase the economic rewards from working,” the finance ministry said in a statement.
The ministry has released a white paper on the challenges and options for the Norwegian Economy.
“Over the coming decades, ageing will lead to a strong increase in public expenditures, including pensions," the ministry said. "Based on Statistics Norway’s demographic projections, old-age pension expenditures are calculated to reach 16% of mainland GDP in 2060 if the present system is maintained, compared to six percent today."
“To sustain today’s public services and meet future pension obligations, the public sector must deal with a gradually increasing financing gap.
“Compared to 2003, the financing gap is estimated to increase to around eight percent of Norway’s mainland GDP in 2060.”
“The coming ageing of the population requires comprehensive efforts to ensure growth and welfare in Norway,” said finance minister Per-Kristian Foss.
“Our initial position for handling these challenges is favourable compared to many other countries. Nevertheless, measures to deal with increasing expenditures, including a pension reform, are necessary.”