A budget that does not respond to the challenges we face

Politics is about priorities and choices. About predictability and trust. This state budget does little to make a difference for those struggling socially and business-wise.

The Norwegian government presented its proposed state budget for 2024 on Friday.

Here are some changes that will affect our finances

In the new budget, the government proposes electricity subsidies for households for the entire year 2024 and wants to allocate NOK 9,75 billion for this purpose. The government proposes that from January 1, 2024, the support threshold value be adjusted from øre 70 to øre 73 per kilowatt hour. Above this level, 90 percent energy prices are paid by the state.

The government proposes to reduce the social security tax rate on wages and social security to 7,8% and on business income to 11,0%. The pension rate will remain at 5,1%.

Another change is the fuel tax. For petrol and diesel it will be increased by øre 15 per liter.

The tax on cigarettes will increase by 4,0 percent and the tax on alcohol will increase by 3,8 percent.

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What CEO Karen Kvalevåg from Revisorforeningen says about Budget 2024

– The state budget plan for 2024 is expansive. It is somewhat understandable that in the current situation there are no plans to significantly reduce the use of oil money. Stability and predictability are important in turbulent times. What is worrying, however, is the continued increase in the use of oil money, says CEO Karen Kvalevåg of Revisorforeningen

– Strictly speaking, we do not need increased development impulses from the state budget now. More money won't lower prices. And this will not reduce the pressure on interest rates. Contrary. If fiscal policy fails to deliver results, Norges Bank will have to accomplish this task through monetary policy.

Every fifth budget crown is oil crown

– The long-term goal must be to reduce the use of oil money. Currently, every fifth budget krone is oil krona. And this is fundamentally about more than just price increases. It is also about fair distribution between generations, the long-term stability of the economy and our ability to maintain a strong and profitable private business life.

– If the political will is there, it is entirely possible to prioritize action for those who need it most, within a neutral framework. This of course requires making cuts or giving up something, but the main task of politics is precisely to set priorities, says Kvalevåg.

Sensible scope of taxation

– The government is struggling to determine a reasonable scope of taxation of private consumption in companies. It is currently planned to present the proposal in 2024, which will enter into force in 2025. The additional year of deferral gives time for adjustment, which entrepreneurs should take advantage of, says Kvalevåg. 

The additional employer contribution has not been removed

– The positive is that nothing significant is being proposed changes in the overall system tax. At the same time, it is disappointing that it is extraordinary employers' tax on high incomes, which is considered temporary, has not been withdrawn. Entry point increased from PLN 750 to PLN 850. is completely irrelevant. This is an additional tax without logical justification that penalizes competence and affects companies that are already severely experienced, concludes Kvalevåg.

The pace of this work is disappointingly slow

Under the Hurdal platform, the government has set a savings target of $11 billion for the corporate sector over the current period. Currently, halfway through this period, there are not many simplifications and it does not seem to be a priority in next year's budget.

– The pace of this work is disappointingly slow. We and other organizations have submitted many simplification proposals to the Ministry of Industry, but in our opinion, not much is happening. At this rate, it will be impossible to keep the promise of simplification, Kvalevåg concludes.

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Source: Revisorforeningen

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