DIVIDENDS TAX FORCED THROUGH BY ORGANIZED LABOUR (Dagens Næringsliv)

Norwegian Confederation of Trade Unions (LO) president Yngve Hågensen has put considerable pressure on the Government to tax dividends. Prime Minister Jens Stoltenberg and Finance Minister Karl Eirik Schjøtt-Pedersen held out for some time due to heavy resistance to the measure in the Ministry of Finance. The Labour Party opposed a similar measure in the Storting in 1998, but Mr. Schjøtt-Pedersen announced yesterday that the Government will seek to implement a 14 per cent tax on dividends.

LEADING TYCOON SUPPORTS DIVIDENDS TAX (Dagsavisen)

Stein Erik Hagen, one of the richest men in Norway, supports the dividends tax. He takes the view that people with high incomes should pay more tax, observing that people of ordinary financial means find it unacceptable that the most affluent segment of our society pays no taxes on the dividends it earns. "It is important to plug tax loopholes so that our system of taxation will be considered as fair as possible," says Prime Minister Jens Stoltenberg.

DIVIDENDS TAX WORST FOR THE LITTLE GUY (Aftenposten)

Major Norwegian investors say they will find other ways to turn a profit. Spokesmen for the small business segment say their group will be hardest hit by the Stoltenberg Government’s double-taxation measure. Sentiment among the legislators is negative, though the Centre Party and the Christian Democrats are prepared to consider a compromise.

PROGRESS UP TEN POINTS (Dagsavisen)

The Progress Party surged forward by over ten percentage points to a 25.1 rating in AC Nielsen’s latest political barometer. In the same poll, Labour slid more than four points to 26.6, while the Christian Democrats are back up to 16.4 percent, their previous record set in March. Kjell Magne Bondevik, the overall favourite for prime minister, is far ahead of his competitors in popularity. 37 per cent consider him the best candidate for prime minister, 26 per cent prefer Jens Stoltenberg, while 18 per cent favour Carl I. Hagen.

PROGRESS GOOD FOR THE POLITICAL CENTRE (Nationen)

Liberal Party chairman Lars Sponheim feels a strong Progress Party coupled with a weak Labour Party will improve the centrist alliance’s chances of forming a government. "The Progress Party’s current high ratings are nothing but a reflection of the extent of Labour’s problems, and as such, they indicate a wider scope of opportunity for the political centre," he says.

POLLSTER PREDICTS PERSISTING LOW FOR LABOUR (NTB)

Elections analyst Henry Valen believes Labour’s ratings will remain in the 20s until next year. "What we are looking at is a protest, an expression of substantial frustration among Labour voters. Direct movement of voters between Labour and the Progress Party has been registered before, but never on this scale," says Mr. Valen.

WHEN THEY GOT THERE, THE WELLHEAD WAS BARE... (Dagens Næringsliv)

The first well drilled in the Barents Sea in the past seven years was a major flop. With a dry well on its hands instead of the large quantities of oil Norsk Hydro was hoping for, there is no outlook for any return on the estimated NOK 200 million cost of the drilling operation. Norsk Hydro has submitted its programme for permanent closure and abandonment of the well to the Petroleum Directorate.

BALANCE OF TRADE RUNNING HIGH (Dagsavisen)

Exports in the first half year exceeded imports by NOK 91 billion, which is more than any foreign trade balance ever logged for an entire year. High oil prices combined with heavy output and a strong dollar are the main factors behind this impressive balance of foreign trade and the outlook for continued growth.

WORTH NOTING

• The outcome of the overall budget proceedings will decide whether dividends will be taxed and how much. "Taxation of dividends must not stifle enterprise, as I am convinced the Government’s proposal would do," says Christian Democratic Party chairman Valgerd Svarstad Haugland. ( NTB)
• Rimi chain owner Stein Erik Hagen asserts that Orkla CEO Jens P. Heyerdahl, Jr. took steps personally to prevent him from becoming Orkla’s biggest shareholder. "Since I am independent and difficult to control, I do not think Mr. Heyerdahl wanted me as a shareholder" says Mr. Hagen. (Aftenposten)
• Men are the single biggest group behind the Progress Party’s phenomenal advance. A whopping 37 per cent of qualified male voters replied that they would vote for Carl I. Hagen’s party. The corresponding figure for women was 18 per cent. (Aftenposten)
• Crown Prince Haakon stated at a press conference in Berlin yesterday that he wants to marry when the time comes. He also admitted that it has been difficult for King Harald to accept his new domestic arrangements. Bishop Gunnar Stålsett will meet with the Crown Prince in the near future. (all papers)

TODAY’S COMMENT from Vårt Land

Labour is struggling to maintain the credibility of its equalization policies. Party leaders have repeatedly proclaimed that the rich will pay more taxes while promising tax relief for ordinary wage-earners. But this is no easy task, however. Most tax measures seem to have their greatest impact on ordinary taxpayers. Their effect on the rich seems to be minimal, and the gap continues to widen. Since this year’s wage negotiations got out of hand, the Government has been searching high and low for ways to demonstrate its refusal to accept the growing disparity in our society. It was leaked to the public last week that the Government was working a dividends tax into next year’s fiscal budget, and the Government made its proposal retroactive yesterday in an effort to prevent businesses from paying out large dividends before the budget goes into effect. We are surprised that the Government again has victimized small investors, including investors in unit trusts (mutual funds). This sort of slip often occurs when events proceed too quickly, but it can, and we expect it to be, rectified in the final budget.

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