November 21, 2014 / 11:28 AM / 4 years ago

Norway's minority government gets budget deal with minor concessions

OSLO (Reuters) - Norway’s minority right-wing government struck a deal with opposition parties on the budget on Friday, making minor adjustments to its original proposal but keeping the overall spending targets unchanged, the parties said.

The deal, which ends weeks of debate, includes a reduction in the planned wealth tax cut, a smaller cut in benefits for disabled parents and an increase in so called green taxes, like emission charges for airlines, the parties said.

The Conservatives and the populist Progress Party rule in a minority, relying on two smaller parties for support in parliament. Those parties had challenged several of its proposals, forcing negotiations and a last minute deal.

The budget was supposed to go to parliament this week. Debate and a vote is now scheduled for Nov. 27.

The government has proposed spending 3 percent of the country’s $860 billion oil fund next year to pay for cuts in the income and wealth taxes, well below its self-imposed 4 percent cap but up from 2.8 percent this year.

With hydrocarbon tax revenue included, Norway runs budget surpluses on the magnitude of 10 percent of GDP.

The deal will also mean lower taxes on biofuels and hybrid cars, a charge on plastic shopping bags and more kindergarten spaces.

The budget proposal, which also includes some cuts in welfare benefits, has weighed on the government’s popularity and the main opposition Labour party now holds a commanding lead over the government in opinion polls.

Still, the government was not in any immediate danger as Norway’s political system does not allow for early elections. Even if a government collapses, parties have to form a new government based on their current mandates.

Reporting by Balazs Koranyi, Camilla Knudsen and Stine Jacobsen; Editing by Sonya Hepinstall

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