Norwegian general election 2021
The election results are in, and the Labor Party is set to form a majority center-left government with its two probable governing parties, the Center Party, and the Socialist Left Party. The new government, headed by Norway’s next prime minister, Jonas Gahr Støre (Labor), will hold 89 seats and a clear majority.
The final count took a few days but did not impact the coalition’s majority in parliament. With the Red Party and the Green Party, the political center-left holds a total of 100 seats.
The Norwegian political system has become more fragmented. While the smaller parties have gained ground in the last few years, the traditionally large parties have lost support. With the Labor Party at 26.4% and the Conservatives at 20.5%, the two largest parties are in the minority in parliament.
Center had its best election since 1993, while support for the Labor Party declined slightly from 2017. The Socialist Left increased its seat count from 11 to 13 seats. The Red Party is the first party to surpass the electoral threshold since it was introduced in 1989 and will hold eight seats. The Green Party came in below the threshold but gets three seats.
The Conservatives lost the most support this cycle. The Progress Party has lost ground compared with the last election but recovered some of its losses in the lead-up the election. The Liberal Party is the only party on the center-right to gain support this election cycle. Like the Green Party, the Christian Democrats came in below the threshold but get three seats.
Majority governments are the exception in modern Norwegian politics. Since 1985, Norway has only been governed by majority coalitions in 2005-2013 and 2019-2020 respectively. With a majority government, the practical implication is that power is transferred from parliament to the government.
Here, we describe what is to be expected from this new political reality.
Norwegian General Election 2021
The election results are in—what happens now?
Incumbent Prime Minister Erna Solberg will lead a caretaker government until a new government can be formed.
The Labor Party will begin negotiations to form a new government, initially with its preferred governing group. Shortly after the election, the parties will present their lists of demands for the negotiations, which will begin at the end of the month. Here, the newly formed majority negotiates both a joint political platform and the distribution of ministerial posts.
The negotiations can be expected to last a few weeks. The official change of government will take place in mid- or late October. In 2013, this was a five-week process. The final agreement will reflect the new division of power among the Labor Party, the Socialist Left Party, and the Center Party. While Labor was twice as large as Center and the Socialist Left in 2005-2009, the party is barely larger than the two parties combined this time around.
Parliament convenes on Oct. 11. On Oct. 13, Solberg’s government will present a proposal for the 2022 national budget. Because the change of government comes after the national budget has been presented, the new government will present an additional bill with its amendments by Nov. 20. The new committee compositions will be ready shortly after the change of government.
We can expect that the new government will practice a different form of parliamentarism than under the 2005-2013 center-left government. While former Prime Minister Jens Stoltenberg demanded that the governing parties appear unified, the incoming prime minister will accept that the parties, to a greater extent, mark their respective party stances, even where there is disagreement. This can be of great importance, as there are clear political differences between the new governing parties.
New government, new policy
What can we expect from the new coalition?
While negotiations are soon underway and important decisions await, there is some policy we can expect with relatively high certainty over the next four years.
Business and industry
The government should play a more active role in economic development.
Consider increased state ownership in strategic sectors, such as minerals, hydrogen, ammonia, offshore wind, as well as health tech and pharmaceuticals.
Support the proposed new oil tax package.
Facilitate sustainable growth in aquaculture but demand reduced emissions and pollution.
Introduce new aquaculture licenses for offshore aquaculture.
Redistribute fishery quotas and ensure that more of the catch is processed in Norway.
Energy and environment
Increase funding for full-scale carbon capture and storage (CCS) projects.
Establish a CO2 fund to facilitate low- and zero-emission transportation technology.
Only the state (Statnett) is to build and operate electricity links with other countries. NorthConnect will not be built with its current ownership. Before new electricity links can be approved, the government needs to conduct a study of how electricity links affect Norwegian electricity prices.
Still unclear what happens with the CO2 tax—likely to be increased but mitigating efforts can be expected. Investigate options for industries that pay both EU Emission Trading System climate quotas and CO2 tax.
Labor, tax, and social affairs
Increased taxation of income over NOK 750.000. Increase the rate on the wealth tax.
Increase tax deductions for union membership fees and commuters.
Strengthen workers’ rights.
Prevent the use of gig workers instead of employees.
Tighten the rules for temporary employment.
Tighten the rules for staffing agencies.
Transport and infrastructure
Keep the road construction company Nye Veier but consider changing its mandate.
Introduce value-added tax on electric vehicles over NOK 600.000, contingent on EU approval.
Reverse the railroad reform by restricting competition in railways and centralizing government control.
Reverse the taxi reform (contingent on EU approval).
Education and children
Tighter regulations for private childcare and kindergarten companies.
The proposed national school intake scheme will not be implemented.
Tighter regulations for private schools.
Consider changes to the new competence requirements for teachers.
Strengthen afterschool programs.
Gradually introduce a national school meal program.
Health and welfare
Abolish the patient choice reform (fritt behandlingsvalg).
Tax private health insurance.
Governance and funding reforms in health care.
Reduce the scope of private companies in health care and child protective services.
Police, security, and defense
Reverse the judicial reform that reduced the number of district courts from 60 to 23. The government will work for a more decentralized court structure.
Reverse parts of the police reform.
Strengthen the Norwegian Home Guard and conscription.
Continue to increase defense expenditure, in line with the NATO 2% pledge.
Foreign policy, humanitarian aid, and EU/EEA policy
The humanitarian aid budget expects a boost.
European cooperation will continue to be important. However, the Socialist Left and Center will push for the safeguarding of Norwegian national interests in the European context.
What issues can leave the parties far apart?
The parties differ on a range of issues:
Government spending: The Socialist Left will push for a large-scale welfare reform where kindergarten, after-school activities, and dental health services become cheaper and government benefits are increased. The Center Party does not support these priorities. Labor wants some of the welfare reforms but does not want a level of government benefits that would make it less profitable to work.
Climate policy: The Socialist Left has the most pronounced green ambitions and wants to cut emissions by 70% by 2030, which would transform Norway into a low-emission society by 2040. While Center opposes tripling the CO2 tax, Labor and the Socialist Left are both in favor.
Oil and gas: Labor and Center want to continue the development of the Norwegian oil and gas industry, while the Socialist Left’s ambition is to put an end to all exploration activity and the allocation of new licenses.
Tax policy: The Labor Party and the Center Party have promised that increases in taxes and fees in some areas will be offset by deductions in others. The Socialist Left wants to increase the general tax and duty level. Moreover, the Socialist Left supports inheritance tax, while both Labor and Center are opposed. Center also wants to protect business owners from wealth taxation.
Fisheries and aquaculture: While the Socialist Left is critical of aquaculture production growth, Labor and Center are supportive of industry growth. The Socialist Left wants to reallocate fishing quotas. Labor and Center are less clear on how they would want to revise the quota system.
Wind power: Labor still supports building wind power farms on land, while the Socialist Left wants the municipalities to be able to veto wind power projects. The Center Party and the Socialist Left want to develop the offshore wind industry but do not support building new foreign connections.
Infrastructure: The Socialist Left wants to shut down the government-owned road construction company Nye Veier and halt the development of highway projects. The Center Party wants to increase infrastructure spending in the rural areas. Labor wants to modify Nye Veier’s mandate, emphasize nature considerations in infrastructure projects and to continue the development of large road construction projects.
Family planning: Center does not agree with Labor and the Socialist left on matters such as egg donation, first-trimester screenings, and the Biotechnology Act. The Socialist Left and Labor are both in favor of removing the abortion committees, albeit to varying degrees.
Growth vs. preservation: The Labor Party and the Center Party want to develop the mineral industry, which can spur a struggle with the Socialist Left Party.
This article was first published by AmCham Norway on Sept. 15, 2021, and is reprinted with permission from AmCham Norway and Gambit Hill+Knowlton. The content is attributed to Gambit Hill+Knowlton and Peter Skovholt Gitmark.
This article originally appeared in the Oct. 8, 2021, issue of The Norwegian American. To subscribe, visit SUBSCRIBE or call us at (206) 784-4617.