The Norwegian defence budget 2004

Today the Government proposed a defence budget for 2004 amounting to NOK 29.4 billion. This represents the same budget level as the 2003 budget. The Government is thus, in their third year in office, advancing on a continuing high budget level for the defence sector. The ongoing restructuring of the Armed Forces, in other words, carries on with full force. Furthermore, the budget secures increased investments, increased readiness and it facilitates the consolidation of Norway's current engagement in NATO.

The Government intends to carry out the restructuring process, towards a new defence structure in accordance with the Parliament's decision for the period 2002 - 2005. The work on the forthcoming long-term plan covering the period 2005 - 2008, which the Government will submit to Parliament this Spring, has, however, revealed a demand to reassess certain planned investments concerning the Armed Forces' long-term structural needs. The realization of some of these projects is therefore postponed until Parliament has voted on the long-term plan. With the balance of the overall budget in mind, and in light of the upcoming long term plan, the government does not propose a further increase in the 2004 budget, as it was described in the current long term plan.

The proposition that the current and next long-term plan should overlap and have a mutually reinforcing effect in 2005, is important to ensure maximum speed in the restructuring process. General conscription is of great importance to the Armed Forces, and will be comprehensively covered in the coming long-term plan. The effort to improve the status for the conscripts with NOK 30 million, is initiated in this budget. This results in increased active service pay, and furthermore, a prioritisation of the conscripts engaged in twelve months initial service through increased demobilization pay at about NOK 1000 per conscripted.

Main aims and priorities

The ongoing defence restructuring is carried out according to Parliament's decision for the period 2002 - 2005. The aim of the current long-term plan, to reduce operating costs with a minimum of NOK 2 billion per year before 2005 compared to an alternative without alteration, is steadfast. This will be realized through, among other things, manpower reduction and sale of real estate. The implementation of the restructuring and cuts in operating costs are mainly on schedule.

Main points of the budget proposals

The Government intends to carry out the project of further releasing resources from operating costs to investments. Compared to the 2003 budget, the operation costs are reduced with 1,4 per cent, while investments will be increased by 0.5 per cent.

Investments

The investment budget amounts to NOK 9.6 billion. Planned investments in 2004 that are important for the ongoing restructuring and NATO force goals, are given priority.

Materiel investment

In 2004 NOK 7.4 billion is set aside for materiel investments. As was the case for 2003, the procurement of new frigates in the Royal Norwegian Navy is the largest single project. Other important projects are the procurement of helicopters, preparations for replacing combat aircraft, continuing upgrading the NASAMS air defence system and the upgrading of the electronic warfare equipment for the F-16 combat aircraft, as well as continuing projects for acquisition of materiel to the Army's contribution to the Armed Forces' rapid reaction units. An acquisition programme for a joint system for transmitting data between the Armed Forces' units and weapon platforms, is important to strengthen cooperation between the armed services and our NATO allies.

Infrastructural investments

In 2004 NOK 2.2 billion is set aside for investments in nationally funded and NATO funded investments in building- and property projects. These are aimed at restructuring, force production for multinational operations and necessary building- and property projects in relation to implementation of new weapon systems. Concerning new building- and property projects, efforts are made to choose inexpensive, mobile and flexible modules as opposed to expensive, permanent and stationary solutions. This will free necessary resources for investments in, and the operating of, the Armed Forces' force structure.

Operations

The operating budget for 2004 amounts to NOK 19.8 billion. Improved capabilities and military effect are focused on at the expence of volume and quantity. This ensures a high level of activity in 2004 as in 2003, among other areas in the North of Norway. Norwegian participation in the development of NATO Response Force will be given priority for chosen forces, not least for the Armed Forces' rapid reaction force units. The Armed Forces joint operating headquarters at Jåttå is given the responsibility of coordinating allied exercises in Norway, and is co-located with the recently opened Joint Warfare Centre within the NATO structure. To Norway, it is important to facilitate training and exercises of NATO Response Force, which are included in the activities at the allied Centre of Excellence for cold weather operating. Norwegian support of this part of the transformation activity in NATO will be given high priority for the further development of Norwegian forces.

The budgetary framework for multinational operations amounts to NOK 700 million. Operational tasks abroad will be more firmly based on the services' standing forces. In this way, the pay costs of Norwegian contribution will mainly be financed through the services' payment budget in force. This is done to maximize the total defence resources, and to sustain Norwegian contributions in operations abroad at a high level. NATO has signalled a substantial downscaling of the engagement in the Balkans from 1. July 2004. A future reduction of Norway's KFOR contribution in Kosovo is therefore possible.

The structure and activity of the Coast Guard in 2004 will continue at a 2003 level, and the Ministry of Justice will take over the budgetary responsibility for the helicopter rescue service. In 2004 The Armed Forces will carry through the annual national winter exercise, Joint Winter, as well as the exercise Blue Game which is a large maritime exercise. Furthermore, the Armed Forces will participate in NATO's crisis management exercise NATO CMX 2004 and in "in the spirit of PfP"- exercise US Baltops to focus on cooperation with the partner countries.