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“The money we spend now must be measured against the well-being we can have later,” says the government.
The revised state budget presented by the government on Tuesday is perhaps the most dramatic budget ever presented in Norway.
The state believed that Norway’s surplus in 2020 would be NOK 255 billion, including oil revenue and Oil Fund revenue, when the budget was approved in December. Five months later, Norway is believed to lose 124 billion.
The net oil-adjusted deficit is NOK 480 billion in 2020.
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Announces that many have to settle for future losses
The government is now clearly announcing that the state cannot continue to take into account the losses of private companies for a long time:
– Although the community has generally contributed to compensating the private sector for most of the loss of income caused by the virus outbreak, not all the losses that occur can be compensated. In the dire situation of the Norwegian economy, many must be prepared to bear losses, the government writes.
Send the bill to future generations.
They warn against the enormous expense of money that future generations must bear:
– Community values must be maintained even if there is a crisis. Our financial assets do not make it cheaper to finance financial measures than for other countries with good access to credit. What is financed today will have to be paid by future generations through higher taxes or lower public consumption. When we now take large assets out of the fund, the budget deficits that can be financed with the fund in the future will be smaller, the government writes.
The consequence of this is that in all future years we will have 11 billion less to spend:
– With the degraded estimate in this report of a total surplus of NOK 379 billion in the state budget and the Government Pension Fund from the salty budget, the expected return of the fund, which can be used annually on public budgets, in Isolated, it is reduced by approximately NOK 11 billion in total in future years. At the same time, long-term challenges for fiscal policy are being strengthened. There is a risk that this loss of income will increase before the crisis ends, the government writes.
Today’s youth must pay for:
– If the use of oil revenues becomes too high over time, it will reduce the well-being of future generations, the government says.
Also read: Vedum is in the throat of the budget: – The elderly keep the bill
On the basis of the crisis it becomes short-lived, warns that it may be wrong
The huge government spending as a result of the crown crisis defends him by believing that the crisis could be short-lived. At the same time, they caution that you may be completely wrong.
– Economic policy is based on the fact that the economic crisis is relatively short-lived and that economic crisis measures can be reversed relatively quickly. This was also believed in the 1970s, but it was wrong. Activity growth did not accelerate as imagined. In planning fiscal policy, therefore, we must also bear in mind that recovery after the virus outbreak may take longer and may take time before economic activity returns to normal. The Norwegian economy is also affected by international developments.
They believe that there is a good argument for spending money now. For example, no revisions were proposed in new road developments:
– If the international setback continues, it may delay recovery here at home. This indicates that, in the future, one should be very cautious about further weakening of state finances.
Also read: The OFS offer has been cut. Hanne (40) still has to pay NOK 3,000 a month: – I’m stuck
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