Norway Daily No. 208/99

The Royal Ministry of Foreign Affairs,
Oslo Press Division

Norway Daily No. 208/99

DATE: 28 October 1999

TAX RELIEF FOR LOWER INCOME BRACKETS

(Aftenposten)

Labour has been won its deductions for low wage-earners, which represents NOK 1 billion in tax relief for incomes below NOK 160,000-170,000. This will affect over a half million wage-earners and will be offset by heavier taxation of shipowners and others with high capital incomes. "This is a good beginning to the effort of achieving a more equitable distribution of wealth in society," says Thorbjørn Jagland.

HIGHER TAXES FOR "EVERYONE"

(Dagbladet)

A tax compromise was finally clinched between the Bondevik Government and Labour yesterday. The highlights of the package include a new surtax bracket for incomes above NOK 700,000, a NOK 36,000 deduction for incomes under NOK 160,000, termination of the tax exclusion for unit trust investments and the plugging of loopholes in the shipowner tax and the split income tax assessment scheme.

LABOUR, GOVERNMENT NOW CLOSE ENOUGH FOR DOMESTIC SPAT

(Dagsavisen)

Labour and the coalition parties have already started arguing over who has "won" the budget negotiations. Despite their superficial disagreement, however, Labour and the government coalition are well on their way towards an agreement on next year's fiscal budget.

CURFEW IN OSLO

(Aftenposten)

Employees of a number of businesses in the Oslo city centre will be subject to a curfew of sorts in connection with the Middle East summit which begins on Monday. Precise instructions have been issued: employees may not leave the buildings in which they work between certain hours, no curtains may be drawn, they are not to remain standing at windows for long, and they may not stand on roofs or balconies.

MILITARY DEPLETING EMERGENCY DEPOTS

(NTB)

Norway's armed forces, strapped for cash, are depleting Norway's stores of goods intended for emergency situations. The army has appropriated over NOK 500 million worth of goods from emergency depots to use in its day-to-day operations, and the depots are not being replenished.

100 MANAGERS TO BE SACKED TODAY

(Dagens Næringsliv)

Nearly 100 management personnel in Saga Petroleum and Norsk Hydro's oil division will be given notice today. Hydro President and CEO Egil Myklebust will announce which of the nearly 200 managers in both companies will not be kept on in management positions in the new combined petroleum division.

MYKLEBUST FACES POLITICAL OBSTACLES

(Aftenposten)

Fear of political repercussions may be preventing decision-makers in Norsk Hydro from making fundamental changes they are otherwise convinced are necessary. For example, it is widely believed that Hydro's top executives, as business administrators, feel the company's oil activities should be reorganized in a separate division. But as analysts and industry representatives point out, the government has a 44 per cent stake in Norsk Hydro. Add to this the fact that Hydro is a pillar of the Norwegian oil industry as well as mainland industry regardless of who its owners are, and the result is that executives shy away from unpopular decisions on the basis of short-term political considerations.

AKER MARITIME RECEIVES GREEN LIGHT, RECONSIDERS

(Dagsavisen)

Minister of Petroleum and Energy Marit Arnstad opened the door yesterday for Aker Maritime to actively participate in oil production on the Norwegian continental shelf. Company officials are pleased at the recognition of corporate competency which the Ministry's decision implies, but Aker Maritime will take "a few months" to decide whether it will go through with its plans to start producing oil.

WORTH NOTING

• An extensive patchwork of small-to-medium tax hikes will give Labour the NOK 2 billion in "taxes from the rich" after all. The negotiators concluded their last meeting at 00:25 hours last night. (Verdens Gang)
• The transitional Government of East Timor, based in Dili, will station its first ambassadors to Europe in Oslo, Brussels and Lisbon. (Aftenposten)
• Norsk Hydro is planning to sell a number of divisions, which may affect 3,000 jobs in various parts of Norway. (Aftenposten)
• Shareholders, employees and everyone else dependent to one degree or another on Norsk Hydro's prosperity have good reason to hope for a change in senior corporate management. The best solution would be if the president and CEO himself were replaced. (Dagens Næringsliv)
• According to a recent survey, eight out of ten Norwegians feel non-prescription drugs should continue to be sold only at specialist pharmacies. (Dagsavisen)
• 21 per cent of pastors in the Church of Norway have sought non-clergy jobs in the past five years. ((Vårt Land)
• Norway's maritime museums are reluctant to give the National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim) information on important historical shipwreck sites, despite the fact that the Ministry of Justice has directed the police districts to formulate plans for monitoring such sites. (Nationen)

TODAY'S COMMENT

Labour and the parties of the centrist coalition both make it clear that there is still much left to do before a budget agreement may be signed. They are right, of course, but politically speaking, there is no way back. Both sides have stated all along that the most important and the most difficult issues will involve taxes. Now that they have reached agreement on tax issues, at least in principle, they have no choice but to follow through. The government coalition has made its choice of partner for this year, and probably for the rest of the electoral term. If the Government were to break off negotiations at this point and turn to Progress and the Conservatives, it would be seen as the ultimate in political inconstancy, unprecedented even for a bloc-independent mini-coalition. And after yesterday's breakthrough, Labour, too, could not break off negotiations now without forfeiting every semblance of credibility. Labour's chief aim in negotiating with the Bondevik Government was to exercise influence over financial policy after two years on the sidelines. And it looks as if party leaders may be justified in claiming that they have influenced the issues which have been settled so far. (Aftenposten)