Residential property tax in ruins (Dagsavisen)

No one could agree on the issue everyone agrees on. So 1.3 million home-owners still have to suffer a residential property tax that all the political parties believe is unfair. The Labour government’s proposal was smashed to pieces, yet the opposition could not manage to muster a majority for any of their various alternatives. In the Storting yesterday evening every party was battling every other. The election is fast approaching and the parties used yesterday’s debate in the Storting to underscore their individual political agendas.

Disbelief at Finance Minister’s promise of tax relief (Aftenposten)

Finance Minister Karl Eirik Schjøtt-Pedersen promised NOK 1.5 billion in tax relief in an attempt to win majority backing for his proposed new residential property tax rules. But only Mr Schjøtt-Pedersen’s own Labour MPs believed his promise. "Understand that if you can," he said in concluding his speech to the Storting during the debate on the residential property tax yesterday. The other parties remained unmoved. On the contrary, the Conservatives and the Progress Party continued to drill holes in Mr Schjøtt-Pedersen’s credibility when he claimed that the new residential property tax system would mean less tax. In reality a new system would not come into effect before 2005, and until then no one will get any tax relief.

VAT reduction will be eaten up in a year (Aftenposten)

While the Government guarantees more taxes by imposing VAT on services, the public is dependent on the goodwill of the retail trade if they are to benefit from the measure intended to sugar the VAT reform pill – half VAT on food. The last time the Government cut taxes to keep prices down it was the middlemen who swallowed up the entire benefit. "I calculate that in six months to a year the cut in VAT on food will have been eaten up in the form of price rises," predicts Bjørn Tore Stølen, chief economist with the Confederation of Vocational Unions (YS).

Central bank threatens to raise interest rates (Aftenposten)

If Svein Gjedrem, Governor of the Norwegian Central Bank, feels this year’s agreement on wage rises is too expensive he will raise interest rates "quickly and sharply". As he sees it, such an action would be the result of the monetary policy guidelines he has been given. The Governor of the Central Bank pursues an inflationary target two years ahead of the present time. If wage agreements and other conditions could cause inflation to rise more than 2.5 per cent in two years’ time, he will intervene now.

Competition from Norsk Hydro (Dagens Næringsliv)

Norsk Hydro is attempting to win favour with investors before Statoil’s shares are floated on the stock market. An advertising campaign costing over NOK 10 million is aimed at increasing the general public’s awareness of Norsk Hydro. In three weeks’ time Norsk Hydro will be joined by Statoil on the stock market, and will lose its position as Norway’s largest listed oil company.

Complaints about Statoil share price (Dagsavisen)

According to many financial analysts Statoil shares are priced too high. They believe the Government will be the biggest winner when trading in Statoil’s shares begins, and are advising private investors not to invest their savings in the oil company. Institutional investors can subscribe to Statoil’s shares from today, while small investors must wait until Thursday.

SAS considers Finnair acquisition (Dagens Næringsliv)

In SAS’s new business strategy Finnair, the Polish airline LOT, and several Baltic airlines are listed as potential acquisition candidates, while the establishment of joint ventures and alliances is an alternative to acquisition. LOT is the most likely acquisition candidate. SAS’s objective is to reach the same level as Lufthansa and British Airways in the Baltic market.

Five-year delay before schools can be closed (Vårt Land)

The Commissioner for Children, Trond Waage, has proposed a delay of five years between the decision being made to close a school and its final closure. He also wants to introduce a maximum journey time to and from school. Mr Waage’s proposal has been prompted by complaints to the Commissioner’s office from parents who have not had the chance to plan where their children should be raised as a result of unpredictable local authority decisions to close schools. 163 small schools in Norway are currently facing the axe.

Worth Noting

• The centre alliance parties want to strengthen the country’s defence capability in the North of Norway and ensure that more young men are drafted in to do national service. Work is now underway to cobble together a compromise. (Aftenposten)
• The European Commission has decided to mount a full investigation of Norsk Hydro and Statoil for alleged price cooperation in connection with the sale of oil and gas. This could lead to fines amounting to several billion kroner. (Dagens Næringsliv)
• According to a recent count, there are 28 brown bears wandering around in the county of Nord-Trøndelag in central Norway. This is almost twice as many as there were last year. The record number of bears is causing deep concern among the county’s sheep farmers. (Nationen)

Today’s comment from Dagsavisen

The centre alliance parties presented their alternative plans to restructure the Armed Forces yesterday. They want to strengthen the current national service scheme and the Territorial Army, and at the same time increase the country’s defence capability in the North of Norway. These measures are more reminiscent of a regional development policy than a defence policy. The Armed Forces need to be restructured. The changes proposed in the Government’s bill are supported by NATO and are in line with the reforms being undertaken by the majority of NATO countries. The changes are painful for the individuals and local communities affected, but they are necessary. Today, well organized groups are able to carry out major terrorist attacks, which means Norway must be in a position to defend its sovereignty, monitor Norwegian territory and carry out the rapid deployment of highly qualified personnel and the equipment they need. In such a defence scenario there is less need for inexperienced national servicemen. The Government’s defence bill is a good starting point for the future defence of Norway, though some adjustments should be considered.