Defence budget 2008

The Government proposes to allocate NOK 31.5 billion for defence in 2008. This is a continuation in real terms of last years level of defence funding and gives a 98 percent fulfilment of the funding allocation for the current long-term plan. The operating budget is NOK 300 million above the level anticipated in the current long-term plan.

“With this budget we are carrying forward the restructuring of the Armed Forces while at the same time the Government continues to follow up the ambitions set out in the Soria Moria declaration for the northern areas and our obligations to the UN and NATO,” says Defence Minister Anne-Grete Strøm-Erichsen. “At the same time it is important to emphasise that the Armed Forces are facing substantial challenges in areas including operating costs. It is therefore absolutely essential that we should continue the work of modernisation, also through next year’s new long-term plan,” says the Defence Minister.

Salient points of the budget proposal
The Government continues to give priority to the modernisation of the Armed Forces and their operational activities. Improved efficiency and a reduced need for measures to stimulate voluntary retirement allows for an overall net saving of 0.6 percent compared with the consolidated budget for 2007, while the proposed operating budget for 2008 amounts to a total of NOK 22,067 million.

The Government’s increased level of activity in the northern areas over the last two years will be continued in 2008. Priority is also given to international peacebuilding and conflict management within the framework of a United Nations led world order, primarily under UN and NATO auspices. Norway’s considerable presence in Afghanistan will continue in 2008 and Norway, in collaboration with Sweden, has offered an engineer detachment for the UN/African Union operation in the Darfur province in Sudan. The Government will, as it has this year, return to the question of allocations for uncosted international operations including the possible implementation of the contribution to Sudan.

The Army’s budget in 2008 will again be given priority and an increase in real terms compared with 2007 is proposed. Substantially increased funding in real terms is also proposed for support functions such as the Defence Medical Service. The government’s budget proposals for the other armed service branches, including the Coast Guard, and the Home Guard, will also receive increases in real terms as a result of efficiency increases in the Defence Estates Agency and the Defence Logistics Organisation. The Intelligence Service has got a substantial budget increase over the past years, and this level is sustained in the proposed 2008 budget. In addition, the Government is proposing a number of measures for the recruiting, retention and welfare of personnel.

The proposed allocation for investment amounts in total to NOK 9,473 million. Excluding NATO investments, the Government’s proposals will strengthen the overall investment budget by 1.7 percent compared with 2007, with particular priority being given to investment in property, buildings and installations which will, for example, help to ensure continuing progress in the modernisation of the Armed Forces.

High priority defence activities in 2008
The proposed budget allocation for the Army represents an increase in real terms compared with 2007 (3.9 percent) and in total the overall budget increase in real terms for 2007 and 2008 amounts to NOK 455 million. Over two years the Army will have increased its man-years of activity by over 40 percent. In 2008 this level of activity will, as a minimum, be maintained. On average this means a significant increase in man-years of activity in 2008 compared with 2007. In addition to national tasks, the Army will in 2008 have the capacity to support international operations with two major contributions at the same time, deployed in two different geographical areas.

The funding proposals for the Navy remain at the 2007 level with priority given to phasing in new frigates of the Fridtjof Nansen class and Skjold class missile torpedo boats. Systems such as submarines, mine countermeasures vessels and weapons for the Navy’s special forces continue to receive funding at the 2007 levels. The phasing in of new classes of vessels will, however, reduce the Navy’s level of operational activities in 2008 and during the years immediately following until the new classes have been phased in and are fully operational. Priority will be given to operations in the north.

The budget allocation proposed for the Air Force is somewhat below the 2007 level. In real terms, however, the budget level will be sustained at least at 2007 level, as a result of reduced costs on services provided by the Defence Estates Agency and the Defence Logistics Organisation. Maritime surveillance flights, the Search and Rescue Service and combat aircraft activities will be given priority. The maritime patrol aircraft and the Air Force’s current transport aircraft are undergoing comprehensive maintenance/updating, and the available maritime surveillance capacity is being given priority in the north. This activity will be maintained, as a minimum, at the 2007 level.

The proposed allocation for the Home Guard represents a real increase compared with 2007 (0.7 percent). The Home Guard quality reforms will be continued. The organisation is in place  and priority is being given to exercising the reaction forces while at the same time investment in new materiel will continue in 2008 with allocations totalling up to NOK 450 million. It is proposed that the scheme for volunteer Home Guard soldiers to support the regular forces in operations abroad should be extended by establishing a new arrangement based on Home Guard volunteers forming separate units. This will also contribute to a reduction of wear and tear suffered by personnel in the regular service branches.

The Coast Guard has, as a result of the priority given by the Government to the northern areas, received real increases in funding both in 2006 and in 2007 and a continuation of this high level of funding is proposed for 2008. The structure of the Coast Guard is being modernised through the phase-out of older vessels and up to 15 vessels will be operational in 2008. The delayed introduction of the NH-90 helicopter means that Lynx helicopters will have to continue to operate, something that is expected to result in reduced helicopter availability in 2008. Priority will be given to the Coast Guard’s activities in northern waters in 2008.

The Government proposes that the funding allocated to Norwegian forces abroad should be increased somewhat in 2008 (0.9 percent). At the same time the Government attaches great importance to ensuring freedom of action and flexibility in being able to put together relevant force contributions to any new operations. It is proposed that the level of the contributions made to the International Security Assistance Force (ISAF) operation in Afghanistan should be maintained while at the same time Norway, in collaboration with Sweden, has offered to contribute an engineer detachment to the UN/African Union operation in the Darfur province in Sudan. In addition, as during the current year, Norway will provide observers and minor contributions to a whole range of operations under UN, NATO and EU auspices.

The exercises Cold Response and Gemini will not take place in 2008 for reasons which include the priority being given to implementation of the Finance project in the LOS Programme for an integrated administrative system for the management of personnel, materiel and finance. Because of the increasing cost of these exercises, the cycle of major exercises will be reviewed. The Armed Forces will receive increased funding for exercising in order to compensate in part for the absence of these two particular exercises. Host nation support for foreign detachments training in Norway will be provided as planned.

The call-up of conscripts for initial military service will continue at about the same level as in 2007. The number of young women volunteering for assessment sessions is expected to be at least as high as in 2007 and specific accommodation and equipment measures will be taken to allow for more women in the Armed Forces. It is proposed that soldiers who complete twelve months service should receive an increase of almost 9 percent in demobilisation grant which would thus be increased to NOK 25,000 as from 1 January 2008. Since 2005 this grant has risen by 67 percent, from NOK 15,000 to NOK 25,000.

Emphasis is placed on measures to assist recruiting, improve welfare and retain personnel. In addition to measures intend to enhance the status of conscript personnel, and the assessment sessions for young women, measures being introduced include more flexible and focused use of the bonus scheme for Subaltern Officers, permanent commissions for officers who have successfully completed the 3-year basic officer training course, and twice-yearly free single journeys for commissioned and non-commissioned officers and their families.

A range of different measures are being considered in relation to the follow-up and aftercare of veterans who have served in international operations abroad. These measures include giving veterans a legal right to aftercare on completion of their service, increased investment in research, raising further the standards of competence in the civil health service and making it a legal responsibility to award objectively assessed compensation in cases where personnel have been affected by service in international operations. The Ministry of Health and Care Services and the Ministry of Defence have arrived at a mutually agreed model for the follow-up of veterans. In the course of 2008 the necessary funding will be made available to enable the Armed Forces to assume responsibility for their part of the follow-up activities.

Investment activity in 2008 is focusing on investment in the structure set out in the long-term plan for the period 2005-2008. Major ongoing projects in 2008 include new frigates, new missile torpedo boats, new anti-ship missiles, new transport aircraft, new maritime helicopters, new armoured vehicles, the updating of P-3 Orion maritime patrol aircraft and the updating of F-16 combat aircraft. At the same time, allowance is being made for the initiation of a number of new and important projects including the renewal of Army and Home Guard equipment and modernisation of the Armed Forces’ information infrastructure. Substantial construction projects are under way including military training facilities at Haakonsvern, a multi-use hall at Skjold and the training and administration building at Setermoen.

It is proposed that the funding allocated for military music should be increased in 2008 compared with 2007. The Government proposes a budget increase of NOK 2 million over and above the general strengthening of military music by the allocation of NOK 7.5 million in connection with the revised national budget in 2007.