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We summarize 311 pages with notice of the Norwegian ragnarok.
On Friday, the government issued a single major warning, in a 311-page report outlining all the challenges they see on the horizon for Norway.
The main points are summarized here.
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The wave of aging is beginning now
Politicians have been talking about it for many years, but now the real wave of aging is beginning.
In the coming years, the number of people over 80 will skyrocket. Today, around 1 in 25 people is over 80 years old. As we get closer to 2060, that number will be as high as 1 in 6.
All population growth is assumed in the coming years in the population over 67 years of age, and otherwise there will be a population reduction.
The result: today there are 4 people working per retiree. By 2060, there will only be 2 people per pensioner.
This is not only a problem because there is less to distribute the loads, but the older you get, the more expensive it is for the state. Especially after age 80, expenses per pensioner skyrocket. A 100-year-old person costs the state around NOK 1.2 million a year, while the state only earns NOK 200,000 a year from people in their most productive age.
Income goes down, expenses go up
At the same time that there are many more elderly people to care for, Norway will embark on a historic reorganization of society due to climate change.
This is happening at the same time that Norwegian oil and gas operations are expected to enter a significant period of decline. Production will drop dramatically in the coming decades.
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According to the Outlook Report, the effect of all this is that new government investments will not be possible in the coming years without cuts elsewhere.
Or as the government puts it: the room for maneuver is being eaten up.
Also read: The government believes that oil exploration does not challenge climate goals
Norway’s public sector is huge and must grow
The fact that over time Norway has had the opportunity to inject oil money into the public sector means that the public sector dominates Norway as a whole. Almost 6 out of every 10 crowns spent in Norway are spent by the public sector.
According to the government, at the same time, the wave of aging will cause even more people to have to work in the public sector in the coming years. Today, about 30 percent work in the public sector, and that number will have to increase to 35 percent over the course of 40 years.
To cover the costs, the government estimates that the average tax rate will need to increase from 25 to 40 percent to cover the costs.
There are solutions: Norwegians should be less sick
So how can this problem be solved?
There are opportunities to improve the situation and the Government reports more opportunities to reduce costs.
By far the most effective measures are that they manage to reverse the trend of people towards disability benefits, which has exploded in recent years.
In fact, there are many indications that Norway has the sickest people in the world, with a proportion of disabilities and sickness absences at the top of the world. Norway has by far the largest share of the population in health spending and by far the highest sickness absenteeism.
Disability benefits are the government’s main concern. Almost 1 in 10 people of working age in Norway now receive disability benefits, something that is through the roof more than in our neighboring countries.
There are many indications that these figures are, in fact, hidden unemployment.
Last year, Norway spent NOK 95 billion on disability benefits, which is more than all hospital expenses.
The third problem: women work very little
Another way the government plans to raise revenue is to cut back on the use of part-time work, where municipalities in particular are the worst at offering jobs that are not full.
Almost 3 in 10 women work part time, and this is the main reason why women earn less than men, is that they work less.
– The high proportion of part-time work in Norway must be considered in relation to the fact that the occupational participation of women, who often work part-time, is high. Because many people participate in working life, the number of hours worked per capita remains roughly the average for EU countries. Part-time participation is particularly high in retail and in the health and care sector. These industries employ many and account for half of all part-time employment, the government writes.
The difference in working hours between women and men is significant in all age groups.
Women are 5 times more expensive than men
The challenge for Norway is that everybody Residents get more than you contribute on average.
During his lifetime, a man costs an average of NOK 3.1 million, while a woman costs an average of NOK 15.6 million.
There are two main reasons for this huge difference: women work less and therefore pay less taxes. Additionally, women are living longer, which means that they use health care and nursing homes to a significantly greater extent. As a result, income is lower and expenses higher.
The only exception to this rule appears to be migrant workers from the Nordic countries (country group 1), who arrive in Norway after completing their education.
It’s worth noting that the cost per capita has risen significantly since the previous outlook report. In 2017, the cost for men was estimated at 1.9 million and women at 12.3 million.
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