10 April 2003

Tax cuts to rescue industry (Dagsavisen)

10,000 more industrial jobs could be lost if all the additional state revenues generated by the oil industry are spent in the public sector. Finance Minister Per-Kristian Foss (Con) would prefer to use the money for tax cuts. “Reduced public sector growth in itself helps to strengthen Norway’s competitiveness. The Government therefore emphasizes the need to keep down the growth in public spending at the same time as we have allocated a significant proportion of our tax cuts to the business sector. Combined with a tight national budget, this will result in increased competitiveness,” said Mr Foss.

The SAS Group is the worst run of all Europe’s leading airlines. The evidence for this is revealed by the company’s own calculations. The SAS Group is in deep trouble. Compared with its main European competitors, SAS is in last place when it comes to cost control. British Airways, KLM and Lufthansa are all way ahead of SAS when it comes to the cost/revenue ratio. In a global perspective, only the major US airlines have less control of their costs than SAS.

A week ago, the Norwegian national soccer team beat EU member state Luxembourg by two goals to nil. But it is quite a different matter to stand up against the entire EU in a fight to conclude a new EEA Agreement. That battle ended two goals to nil in the EU’s favour. The new, expanded EEA Agreement will probably be finalized today. When the 10 new EU member states, together with the EU’s existing 15 members, meet the three EFTA countries, the handshakes will be numerous and the relief palpable. The whole deal comes with a NOK 1.8 billion price tag, of which Norway will almost certainly have to stump up NOK 1.7 billion. This is ten times more than today’s EEA membership fee. It is also fairly certain that Norway and EFTA have gained acceptance for their demand that this money should not disappear into the EU’s many funds, but should be earmarked for social and economic equalization in the ‘poor cousins’ who will join the EU next year. It also seems certain that EFTA and the EU have reached agreement on a duty-free quota on fish, including herring and mackerel, as compensation for the termination of the free-trade agreements the EFTA countries currently have with the 10 new EU member states.

The danger of a political crisis arising over the issue of pre-school day-care would be reduced if the Storting toned down the tax exemption for nursery places paid for by employers. The tax exemption has emerged as the biggest stumbling block for Prime Minister Kjell Magne Bondevik and Children and Family Affairs Minister Laila Dåvøy when the pre-school day-care issue comes up in the Storting. The Conservative Party does not agree, and points to the price cap. The PM has said he hopes the parliamentary majority will “take another look at tax exemption in particular”. According to Mr Bondevik, tax exemption conflicts with everything else Labour leader Jens Stoltenberg says about redistribution of wealth.

According to Finn Bergesen, chief executive of the Confederation of Norwegian Business and Industry (NHO), today’s local authority borders were appropriate in the age of the horse and cart. Now he wants to axe at last half of the country’s 434 local authorities. “Public expenses are growing out of all proportion. It just cannot go on like this. We have to cut costs, and to do that we can either look at the way local authorities are structured or cut welfare provisions to our citizens. I feel we should have much larger units than today,” he said. The NHO has been very cautious about taking a standpoint on controversial issues such as the Iraq war and the relocation of central government agencies out of the capital. But Mr Bergesen was not as cautious when discussing two of the country’s three levels of government. “Some people think that local and county council boundaries are sacred, but that is obviously silly. Local and county council boundaries are theoretical structures from a bygone age,” said Mr Bergesen.

Together, the eight largest parties will spend almost NOK 30 million on their election campaigns this year. The Labour Party accounts for a third of that amount. With an expansive NOK 10 million in campaign funds, Labour is the political party that will be throwing most money at the voters this autumn. The Conservatives are in a good second place with a campaign budget of NOK 8 million. And trailing down at the bottom of the list are the Liberal Party (NOK 500,000-600,000) and the Centre Party (NOK 850,000), whose share of the vote is also very small.
(Dagsavisen)




SAS pilots reached agreement with management yesterday afternoon on new terms and conditions of employment. The most important point in the new agreement is for longer working hours. The pilots have agreed to a maximum working day of 14 hours compared with today’s 10.5-hour maximum.
(Dagens Næringsliv)




While the Government wants to reduce the pressure on children and young people from advertising, Education Minister Kristin Clemet is thinking of allowing adverts in school textbooks. “Talk about a paradox,” commented Bjørn Hauge, chief executive of the Norwegian Advertisers’ Association (ANFO). “If they want to improve education, as they have said, they must also put money into school text books. It seems odd to talk about adverts in textbooks at the same time as they want to introduce legislation banning certain types of advertising,” he said. He is calling on the Government to make up its mind.
(Vårt Land)




A patient suffering from respiratory problems has been placed in strict isolation at a hospital in Bodø, because medical staff feared he was infected with SARS. However, the National Institute of Public Health says it was a false alarm.
(Dagsavisen)

This spring Norway’s political landscape could be the scene of a battle over pre-school day-care. This is something of a paradox, since all sides are agreed that more nursery places need to be built and that the fees paid by parents need to be reduced. Last year the opposition parties in the Storting decided to use pre-school day-care as a weapon with which to inflict a political defeat on the Government. A strange alliance between the Socialist Left Party and the Progress Party dragged the Labour Party with it into forcing the Government to implement a number of measures, without doing anything to investigate whether these measures would have the desired effect. The Government was therefore forced to pursue a policy whose consequences were unknown.

It therefore comes as no surprise that the Government has chosen this issue to show that there is a limit to how much the Storting can kick it around. And the Government has found a weak point in the opposition parties’ scheme, a point on which the opposition parties disagree. Tax exemption for nursery places paid for by a parent’s employer is patently inequitable, it is the kind of tax relief for the rich that the Labour Party and the Socialist Left Party feel very uncomfortable with. The reports produced by the Government reveal the opposition’s pre-school day-care reform to be a scheme involving significant advantages and financial transfers to those who are given a nursery place for their children, while the situation for everyone else gets worse. There is also a danger that the quality of the pre-school day-care provided will be weakened, and that there will be less money available for schools and nursing homes.

The opposition claims that the Government is exaggerating the dangers. Be that as it may, it should still be in everyone’s interest to create a policy on pre-school day-care that does not lead to this situation. There is still hope that political prestige can be set aside, so that the entire issue can be debated anew – based on a shared view of what the objective is.