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Border trade is a major issue in the ongoing budget negotiations between the Progress Party and the government, and this week the party’s leader, Siv Jensen, has emphasized that they are the jobs the party is fighting for, while that she has been in and out of the Prime Minister’s office where negotiations have taken place.
On Friday he told the press:
– The point is that if we achieve a significant reduction in taxes on cross-border goods, it will be thousands of jobs.
ONGOING NEGOTIATIONS: Sylvi Listhaug and FRP leader Siv Jensen after budget negotiations with government parties in the Prime Minister’s office. Photo: Terje Bendiksby / NTB
– Must come down to Swedish level
Both she and FRP deputy leader Sylvi Listhaug have stated that FRP will not sign any budget agreement without the tax cuts being “significant.”
And if the cuts are to have a significant effect on employment, prices must “come down to the Swedish level,” says Harald Jachwitz Andersen, director of Virke Handel.
– It applies to beer, wine, mineral water, all the products that attract us to cross the border, says Andersen.
TV 2 has asked what the knowledge base is that Jensen is referring to when he says that the cross-border trade requirement is about securing thousands of jobs.
Frp’s communications advisor, Lars Joakim Hanssen, says that Frp draws on the experience of Denmark, which has cut taxes to stall cross-border trade, and the calculations that the business community itself has made:
- Including this NHO report, where the organization of interest itself has calculated that if taxes on sugar products and non-alcoholic beverages are completely eliminated, and taxes on alcohol and tobacco are reduced by half, 3,000 new employees will be generated in the food industry and 4,800 new in retail.
- And this report has been received by the Virke workers organization of the analysis company Menon Economics, which has analyzed the effect of the brake on cross-border trade during the crown crisis.
– Menon has analyzed what the turnover that has occurred since March has meant for the Norwegian grocery industry and has concluded that it would provide a basis for 8,200 new jobs, says Jachwitz Andersen at Virke.
WANTS CLOSE TO THE SWEDISH TAX LEVEL: Harald Jachwitz Andersen Director of Commerce Photo: Truls Aagedal / TV 2
– Can’t compare
But Menon Economics partner Erland Skogli cautions against drawing a conclusion that tax breaks on goods exposed to border trade will have the same effect on employment in Norway, according to his report.
STOP: Menon Economics partner Erland Skogli emphasizes that what they have discussed is stopping cross-border trade. Photo: Menon
– Our report cannot say anything concrete about whether the tax relief will be able to create jobs, Skogli tells TV 2.
He believes that it is not possible to compare a scenario in which taxes on goods exposed to cross-border trade have been reduced to the Swedish level and the situation that the analysis cabinet has looked at, with borders closed.
– Not comparable because we have not examined measures to stop cross-border trade. We have analyzed a situation where cross-border trade has stopped. So we don’t have the answer as to whether the tax cut will create more jobs in Norway, says Skogli.
– Not many thousands
Norwegian School of Management professor Frode Steen has investigated cross-border trade and thinks the estimate of 8,200 jobs seems too high.
– It’s hard to understand why that number is so high, says Steen and elaborates.
– Especially because even if we set the rates, to make it exactly the same, there will still be many more items in the border store, there will be other items, and I am not unaware that many people think it is good to have another trip. Sweden too.
NOT MANY THOUSAND: Professor of Market Economics at NHH Frode Steen Photo: Ørnulf Riisnæs
Steen emphasizes that he believes more jobs would be created in the grocery industry if taxes on typical lures were lowered.
– The question is how many, and then we are not talking about many thousands, I think.
Together with economist Ivar Pettersen from the Norwegian Bioeconomy Institute (NIBIO), he has published this year the book “Towards better knowledge in the Norwegian food sector”.
Pettersen is skeptical whether the Swedish level of taxation on beer, wine, soft drinks and sweets in Norway would have had the effect on employment that FRP expects.
– I see no reason to be very optimistic based on such general tax cuts, he says.
Approaching the deadline
The economist justifies it with the fact that cross-border trade today is not particularly rational either.
– Considering what it costs to travel there, shopping in Sweden is not particularly profitable, believes Pettersen.
He believes it is an especially effective move that politicians can choose from, if they really want to get rid of cross-border trade.
– What can help is abolish the tax-free scheme, but it is an unpopular measure, says Pettersen.
At the same time, he believes that if one is going to use tax cuts as a tool to stop cross-border trade, then the FRP is right to attack the decoys.
The FRP and the ruling Conservative, Liberal and Christian Democratic parties have been negotiating the state budget for 2021 since November 9.
On Friday the financial recommendation was delivered to the Storting without a budget agreement and on Sunday the negotiations concluded without an agreement. On Monday, the party leaders will meet again.
December 3 is the financial debate, and then the parties can deliver a budget agreement as a supposed loose proposal in the room.
Data on budget negotiations
FRP has started negotiations with the following demands for cross-border trade:
“Taxes on goods exposed to cross-border trade must be lowered so that we can secure more secure jobs in the grocery trade in Norway”
In their alternative budget, they are in favor of:
- Eliminate the tax on chocolate and pastries.
• Eliminate the tax on non-alcoholic beverages.
• Eliminate the basic tax on disposable packaging.
• Reduce the snus tax to the Swedish level.
• Reduce alcohol taxes on beer and wine / strong beer to the Swedish level.
A liter of wine is taxed at NOK 26.58 (Sweden), NOK 16.18 (Denmark), NOK 42.54 (Finland) and NOK 63.48 (Norway).
Source: TV 2, Frp.no
