Norway PM Doubles Down on Tax Cuts in Bid for Second Term
With four weeks to go before an election that is too close to call, Norway’s Conservative prime minister, Erna Solberg, pledged on Monday to cut taxes to boost growth and job creation if she was re-elected.
In power as head of a minority coalition government since 2013, Solberg is attempting to become the first right-wing prime minister to win re-election since 1985.
While taxes, unemployment and a rural backlash against government reforms are hotly debated, opinion polls show a near dead heat between Solberg’s right-wing coalition and center-left parties seeking to replace it in a Sept. 11 vote for parliament.
Support for the main opposition Labor Party, which seeks to raise taxes on high earners and the wealthy, has slipped slightly in recent weeks, erasing the narrow lead held by the center-left in most polls during spring and early summer.
“We must get across the message that Norwegian politics won’t have to go left when it’s so obvious that the economy is improving and jobs are being created,” Solberg told Reuters on the sidelines of a news conference.
She highlighted spending on education and transport, as well as “growth-enabling tax cuts” as key priorities ahead.
The price of oil, Norway’s key export, fell by more than 70 percent from 2014 to 2016, lifting unemployment to a 20-year high of five percent last year, but crude has since staged a partial recovery and the jobless rate has eased to 4.3 percent.
The government increased spending from Norway’s $975 billion sovereign wealth fund, the world’s largest, to aid the recovery, but the growth in public spending should moderate now that growth is normalizing, Solberg added.
Labor leader Jonas Gahr Stoere reiterated a plan to raise income and wealth taxes by up to 15 billion Norwegian crowns ($1.89 billion) to pay for public services while avoiding becoming too dependent on the wealth fund’s cash.
“It’s fair and necessary to do this,” he told independent broadcaster TV2, adding the money would be used to hire more teachers, improve care for the elderly and help combat climate change.
A survey published by TV2 on Monday, asking eligible voters who they believed would win, showed 50.3 percent expected Gahr Stoere to become prime minister, while 48.4 percent of those polled thought Solberg would stay in power.
An Aug. 11 poll by Respons on behalf of the newspaper Aftenposten showed Labour and two key backers, the Center Party and the Socialist Left, obtaining a combined 44.6 percent support, down from 46.3 percent in June. The government and its backers rose to 47.1 percent from 46.3 percent.
The outcome of the vote could ultimately be decided by the results for several small parties, including the right-leaning Liberals, the far-left Reds and the unaligned Green Party. All are battling to surpass a four-percent election threshold.
Leaders of all eight parties that currently hold seats in parliament, as well as the Red Party, are due to hold their first televised debate of the campaign at 1930 GMT.
($1 = 7.9371 Norwegian crowns)