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The key policies from Norway’s new government that you need to know about

Norway’s incoming government on Wednesday presented the key policies and proposals it will plans to implement when it takes over the reins.

Published: 13 October 2021 17:41 CEST
Updated: 16 October 2021 09:10 CEST
The governments policy platform has been revealed. Pictured is a statue outside of Norway's parliament.
The governments policy platform has been revealed. Pictured is a statue outside of Norway's parliament. Photo by Arbeiderpartiet on Flickr.

On Wednesday, Labour leader Jonas Gahr Støre and his counterpart from the Centre Party, Trygve Slagsvold Vedum, unveiled their government policy platform. 

“Now Norway will have a government that will listen to the people. We will not overtake people but work to reduce the differences socially and geographically,” Vedum told the press at the reveal. 

The incoming government will pursue tax cuts for lower earners, cheaper childcare and more affordable electricity. 

Tax cuts (but not for everyone) 

The government wants to reduce income tax for those on incomes less than 750,000 kroner per year. This was a key promise that the Labour Party made throughout the election, and the Centre Party also said that it wanted a tax cut. 

Whether the tax cut will be in addition to the proposed bracket tax cuts for those on low-to-middle incomes the outgoing government announced on Tuesday remains to be seen. 

READ MORE: How Norway’s proposed state budget for 2022 could affect your finances

While those on lower incomes may pay less in tax, higher earners can expect to be taxed more. 

Working life

The incoming government wants to tighten the Working Environment Act to improve working conditions, cut down on the number of temporary positions, and regulate the staffing and recruitment industry more closely.

Other tax changes

There will be other changes to taxes, including bad news for anyone hoping to purchase an electric car soon. 

VAT will be applied to new EV’s sold for more than 600,000 kroner, while the new minority coalition proposes lowering deductibles on the wealth tax to ensure the wealthiest in society pay more. 

EEA and immigration 

The eurosceptic Centre Party is a vocal critic of Norway’s membership of the European Economic Area or EEA. Before the election, it said it wanted to regulate labour immigration and pull Norway from the Schengen agreement renegotiate with the EEA. 

The new government has said it will remain part of the agreement, but it will be examined and investigated to see whether there is any room to manoeuvre within it. This will come as a relief to many foreign residents in Norway, knowing their right to live and work in Norway will be protected. 

More affordable childcare

The maximum price for kindergarten places will be lowered during 2022, and families won’t have to pay for a third child to attend at the same time as their siblings. 

In addition, the two parties have agreed to gradually introduce a healthy daily meal into schools and more daily physical activity. 

Free afterschool activities for all first-graders could also be implemented, although there are currently no details on when this could happen. 

Cheaper electricity 

More affordable power is also on the agenda. The coalition has promised to lower taxes on electricity, increase housing support and introduce a geographical price equalisation of grid rent. 

READ ALSO: What are the knock-on effects of rising energy prices in Norway?

This is as well as strengthening consumer rights, increasing the output of Norwegian energy and ensuring no new cables transferring power are constructed. 

Climate

The government will continue looking for oil in new areas, a policy point that caused the Socialist Left Party to leave negotiations to be part of the coalition. 

Despite that, there’s still green policy. Norway’s CO2 tax will gradually increase to around 2,000 kroner per tonne by 2030. Greenhouse gases will be cut by 55 percent by 2030 compared to 1990 levels, and this obligation will apply to sectors of the economy subject to climate quotas. This will bring Norway in line with EU climate targets. 

READ MORE: New Norwegian government outlines climate ambitions despite commitment to oil

Healthcare

Ullevål hospital will be closed and replaced by new hospitals at Gaustad and Aker that will need to be built. 

Dental care looks set to become cheaper. Free dental care will be extended to those aged between 19-21, and the cost of dentistry will be subsidised to the tune of 50 percent for those aged between 22-25. 

The health trust model will also be put under the microscope with the parties examining whether the current system is fit for purpose. 

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POLITICS

How Norway’s 2025 budget will impact foreign residents

Norway’s government won’t unveil its budget for another few weeks, but several proposals, such as income tax cuts, have already been made public. Here's how foreign residents in Norway will be affected.

Published: 19 September 2024 12:06 CEST
How Norway's 2025 budget will impact foreign residents

Norway’s budget for 2025 will be unveiled on October 7th. It is the last budget the current government will present before the general election next year.

Tax cuts

Finance minister Trygve Slagsvold Vedum said this summer that those on ordinary incomes would pay less income tax in 2025. How much income tax will be cut is currently unknown.

Tax residents of Norway currently pay a flat tax rate of 22 percent, and then a further “bracket tax” based on how much they earn. For example, those who earn up to 670,000 kroner per year pay a four percent bracket tax, while those making between 670,001 and 937,900 kroner pay a 13.6 percent bracket tax.

READ ALSO: How does Norway’s bracket tax for income work?

Norway’s tax card system would also be tweaked to benefit those with part-time jobs. Next year, you can earn up to 100,000 before paying tax. This could benefit foreign students in Norway.

Finances

The government will continue its electric subsidy for households next year. The government announced its intention to continue the policy this spring.

Currently, the state covers 90 percent of the electricity price above 73 øre per kWh – or 91.25 øre including VAT.

Residents of Norway’s 212 least central municipalities will have 25,000 kroner of their student loans written off per year from 2026.

Those in Finnmark and Nord-Troms will have their loans written off at a rate of 60,000 kroner a year.

READ MORE: The incentives to attract people to northern Norway

Crime

The government will spend an extra 2.8 billion kroner on fighting crime. Of this, 2.4 billion kroner will go directly to beefing up the number of police officers in Norway. Some 90 million kroner would be put towards cracking down on financial crime.

Furthermore, 405 million kroner would also be spent on fighting youth crime, by creating a fast track court for young offenders and creating more juvenile detention places.

Travel changes

Up to 2.9 billion kroner extra spending will go into maintaining Norway’s rail infrastructure. Signal and track failures have been a constant source of delays in east Norway, where services regularly struggle with punctuality.

Over 12 billion kroner will be spent on Norway’s rail system.

Norway could finally reveal more details on its proposed tourist tax. The country’s industry minister, Cecilie Myrseth, has previously said that a proposal would be tabled this autumn.

The minister didn’t say whether this would be related to the raft of proposals included in the budget.

A potential tourist tax has long been promised by the current government as part of the Hurdal Agreement it was formed on in 2021.

As part of its budget cooperation with the Socialist Left Party, the government will be required to assess whether a subsidy scheme should be introduced for long-distance bus travel in Norway.

Bus routes without an alternative, such as train, could be subsidised under the scheme.

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