On Friday, the government was able to present good news to hard-pressed municipalities: NOK 5 billion extra will be transferred to the municipalities and counties this year and next year. It comes in handy for municipalities that are struggling with high interest costs, many statutory tasks and depleted municipal coffers.
It is a paradox in Norway that we have an enormously rich state, while many of the municipalities, which are supposed to provide several of the services that form the front line of the welfare state, struggle with poor finances. There are therefore good reasons to look at the revenue system for municipalities, as the government has done. The new system has resulted in large transfers from rich to poorer municipalities.
Forces that want a different direction for the country are blood.
The government is now following up with fresh billions to the municipalities both this year and next year. Specifically, an extra 4.3 billion will be transferred to the municipalities and 700 million to the county councils for 2024, and the same sum for 2025. With this, the government is permanently lifting transfers to the municipal sector, according to Local Government Minister Erling Sande.
It is absolutely necessary. Several municipalities have desperately announced that schools must be closed and that there will be cuts in health and care. The fresh transfers, which come just a month after the government presented its proposal for next year’s national budget, will be of great help.
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Nevertheless, criticism rains down on the government. The opposition believes that there is too little money and wonders why the government did not find room for these transfers in the state budget, while NHO believes that “more money is the wrong answer to the challenges”, and fears that these transfers will have consequences for the interest rate level.
Such is everyday life for a hard-pressed government. Forces that want a different direction for the country are bloodthirsty, and see their intention to attack the government no matter what it does. On the other hand, we believe that the government should have the honor of tackling the municipalities’ poor finances before consequences in the form of poorer welfare services and discontinued services take effect.
The level of transfers can certainly be debated. In any case, what is absolutely certain is that we have a government that is responsive and that adapts the map to the terrain. And that NOK 5 billion will come in handy when politicians around the country now have to balance the budget for next year.
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