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– We are in the greatest crisis since the 1930s, so it goes without saying that wage growth will not be 3.6%, says municipal minister Nikolai Astrup (H).
Today, when the government presents a revised national budget, it adjusts projections of how much wage growth will be in Norway.
The pay settlement was supposed to have been completed this spring, but, like many other things, it was exposed when the coronavirus turned its head on the country and the economy in March.
In the original 2020 state budget, average salary growth was estimated at 3.6 percent. The municipality has already received money from the state to cover this. In revised budget calculations, average annual salary growth is estimated at just 1.5 percent.
Covers municipal losses
This means that municipal employees will receive less money in the salary deal than expected earlier this year.
But the municipal minister, Nikolai Astrup, believes that it will be favorable for the municipal economy because the municipalities have budgeted with more salary costs than they will be. He emphasizes that municipalities receive the money they have already received.
Astrup told Dagbladet that this will free up more than NOK 9 billion for the municipalities.
The municipal organization KS believes that the crisis has cost the municipal sector between NOK 18 and 27 billion in loss of tax revenue and additional expenses as a result of the pandemic.
“We are facing a fate for the welfare state,” the leader of the left-wing political think tank Manifesto wrote yesterday. He feared that the crown scent of municipalities went beyond services such as kindergartens, nursing homes, and schools.
But Nikolai Astrup rejects this vision of reality.
– From day one, we have been very clear that we must establish ourselves for municipalities and that they can provide good services to citizens both during the crisis and after the crisis, he tells Dagbladet.
– No acute crisis
– Do you expect municipalities to have a somewhat smaller margin of action after all, or are all losses fully compensated?
– There is no acute currency crisis in the municipality of Norway now. There is no need to cut basic services, lay off or fire nurses and teachers. On the contrary, I have told the municipalities that it is now important not to cancel or postpone the tasks that they intended to carry out. It can escalate the crisis in the private sector and contribute to even worse tax collection, Astrup says, continuing:
– At the same time, I think that nobody is completely affected by the crisis. There are some expenses that it is not natural for the state to compensate. An example is for municipalities that have ownership interests in electricity companies. We have very low energy incomes per day, but it is not natural for the state to compensate municipalities for obtaining less income from companies in which they have property interests, he says.
Covers 19.9 billion
Nikolai Astrup notes that the municipal sector has received more than 10 billion additional crown kroner from the state. These have come as financial grants, reduced employer taxes, money for vulnerable children, increased framework grants for GPs, and transfers to county municipalities for lost ticket revenue at public companies.
According to the Minister of Local Government, the additional funds together with the savings in salary payments total NOK 19.9 billion.
– It is within the range that KS has estimated that the municipal sector will suffer losses, Astrup concludes, but emphasizes that these are uncertain figures.
In government calculations, compensation to municipalities and increased room for maneuver as a result of rising wages and prices make the municipal sector a total of about NOK 5.5 billion more than they have lost as a result of the crisis.
– We must continue to closely monitor the situation in the future. If we see new needs emerging, then the state will consider new measures, Astrup says.
More free income next year
In addition to the revised national budget, which deals with the Norwegian economy this year, they also calculate how much municipalities will spend next year to date, in the so-called municipal proposal.
– By 2021, we expect a growth in free income of between NOK 2 and 2, NOK 4 billion, of which 1.6 – 2 will go to municipalities and county municipalities receive NOK 0, 4 billion. It is important in the situation we are in, that the municipalities receive growth in free income, says Astrup.
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