Negotiations over Norway's next state budget began Friday morning at 10, with five parties on the red-green side meeting at the Storting to hammer out a deal. The talks are led by Tuva Moflag of the Labour Party (Arbeiderpartiet). According to Nettavisen, the outcome is likely to mean more public spending and higher taxes, and the paper doubts Labour will hold firm against the demands now on the table.
Why it matters
The negotiations decide how much of Norway's oil wealth the state will spend next year. The government has laid out plans to use 608 billion kroner from the state budget, and the so-called fiscal rule — the spending guideline Jens Stoltenberg himself helped introduce in 2001 — no longer appears to restrain that figure, according to Nettavisen. With the Oil Fund now so large, the paper argues the rule has stopped functioning as a limit. How the parties settle the tax and spending questions will shape household finances and business conditions well beyond 2026.
A bloc pulling in different directions
Nettavisen describes the red-green camp as divided on nearly every point, with the one apparent common ground being a shared appetite for high spending and high taxes.
The Socialist Left Party (SV) has entered the talks with a demand for 25 billion kroner in tax increases. As usual, the money is to be taken from "the rich" — a group that in practice, according to Nettavisen, includes a great many ordinary people with normal incomes and assets. The paper argues that for SV, taxation is purely a question of distribution, and that the party shows no recognition that tax levels also affect how much value is created in the first place and can therefore be shared out.
SV's financial policy spokesperson, Marthe Hammer, told Dagens Næringsliv that the tax system is decisive for ensuring fair distribution. She said inequality is now at its highest level in 100 years, and that a small number of people own more than half of Norway's population. Nettavisen contends that if SV gets its way, more wealth creators will leave the country.
The Centre Party (Senterpartiet) is focused on its own priorities, this time fuel duties, where Nettavisen says the party now appears to be setting an ultimatum. The paper concedes the party is right that high fuel prices hit both households and businesses. The difficulty is that cutting fuel taxes is hard for the Green Party (MDG) to accept, and difficult for SV as well.
Nettavisen expects Labour to take the easy route: give in, and let those parties also have their expensive wishes granted. Extra billions for public transport, climate measures and other favourite causes are described as likely ingredients of any agreement. Rødt has also put in costly demands.
The arithmetic of the talks
The political reality, as Nettavisen lays it out, is that none of MDG, SV or Rødt is going to bring down the government under almost any circumstances. Senterpartiet, formerly a centre-right party, might conceivably switch sides, but the paper considers that unlikely too.
That leaves Labour in a position to take a hard line if it chooses. Moflag, according to Nettavisen, does not need to give much away to the other red-green parties. The paper's own prediction is that this will not happen — that spending more money and covering the cost by raising taxes is simply too convenient, and that Labour will not manage to be tough in these talks.
The result, Nettavisen concludes, will unfortunately be a further increase in heavy state spending. On the fiscal rule, the paper notes that Stoltenberg's attitude appears to be that there is no problem: "One thing we will live off is the Oil Fund," he said during a debate on NRK's Politisk Kvarter on 30 October. Nettavisen characterises his position as treating the spending as within the sacred fiscal rule and therefore fine, while dismissing criticism as doom-mongering.
Aftenposten reported that the finance politicians came equipped with sleeping bags, ready for long negotiations, and adressa.no noted one participant had the sleeping bag ready in the office before talks began. Dagbladet published an overview of the demands.
Watch for whether Labour holds its line on the 25 billion kroner tax demand or trades concessions on fuel duties and climate spending to secure a majority.
