Bloomberg News

Norway’s Premier to Fight for Wealth Tax in Bid for Re-Election

February 13, 2013

Norway’s Prime Minister Jens Stoltenberg is making taxing the rich a focal point as he tries to overcome a deficit in the opinion polls seven months before elections in western Europe’s biggest oil producer.

The 53-year-old premier today laid out his agenda and lambasted the opposition’s plan to almost eliminate the nation’s wealth tax.

“My task is to speak about our politics, about jobs, education and health care and to show the differences because an election is about choices,” the Labor Party leader told reporters in Oslo. “It’s important whether we use many billion kroner to abolish the wealth tax for the very richest people or whether we use the money for schools and health care.”

The premier, hailed as the “father of the nation” following his response to the July 22 terror attacks in 2011, has seen his support dwindle as the terror response was reassessed and the government was criticized for a hospital overhaul and slow progress in building roads and railways. His three-party coalition has also been hurt by an internal rift over oil exploration in restricted areas off the environmentally sensitive Lofoten islands as well as an unpopular cheese tariff.

Gloomy Polls

Polls show that Stoltenberg, who’s seeking an unprecedented third consecutive term, may be ousted in September after eight years in power. In 2009, he became the first leader in 16 years to win re-election after steering the economy out of a recession by tapping a record amount of the nation’s oil wealth.

According to a survey by broadcaster TV2 published on Feb. 11, Stoltenberg’s Labor Party and his coalition partners, the Socialist Left and Center Party, would win 61 seats, compared with 89 for the two largest opposition parties, the Conservatives and the Progress Party. The Conservatives, who have vowed to cut taxes and increase oil exploration, had 32.1 percent backing, compared with 28.7 percent for the Labor party.

The Conservatives yesterday proposed to reduce the wealth tax to shield small businesses and home owners. The party plans to cut the wealth tax to 0.5 percent from 1.1 percent and raise the threshold to as much as 25 million kroner ($4.6 million) from the current 870,000 kroner. The proposal will eliminate wealth taxes for 99 percent of those that currently pay the levy, the Conservatives said.

The premier said today at a party convention in Oslo that he hasn’t given up on winning a third term.

‘Within Reach’

“It’s fully possible to win the election,” Stoltenberg told party members. “It’s absolutely within reach.”

The world’s fourth-richest nation per capita has so far withstood the euro area’s debt crisis thanks to its oil wealth. Record investment in its petroleum industry has fuelled demand for workers, keeping unemployment at about 3 percent. Growth in the mainland economy, which excludes oil, gas and shipping, is estimated to slow to 3 percent in 2013 from 3.75 percent last year, according to central bank forecasts. This compares with an economic contraction of 0.3 percent in the 17-nation euro region, according to European Central Bank forecasts.

A report today showed the economic expansion, excluding oil, gas and shipping, slowed to 0.3 percent in the fourth quarter from a revised 0.8 percent in the prior quarter, Oslo- based Statistics Norway said.

The premier faced calls for his resignation last year after a formal probe revealed the government’s failure to prevent the 2011 terror attacks, where Anders Behring Breivik bombed Stoltenberg’s Oslo office, killing eight, and massacred 69 people at a summer camp of the Labor Party’s youth wing.

Breivik in August was sentenced to 21 years in prison with an option to extend his term.

To contact the reporter on this story: Josiane Kremer in Oslo at jkremer4@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net


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