News of Norway, September 6, 2002
"The Norwegian authorities share many of the assessments of the Norwegian economy presented in the report," says Foss.
"Among other thing, we agree with the need to maintain a larger, more active workforce by reducing sick leave and reversing the lowering of the effective retirement age. I notice that the OECD all in all is positive in regard to the guidelines for economic policy. I also notice that the OECD underscores the importance of not easing fiscal policy beyond the present fiscal rules."
Some disagreement
In some areas the OECD report is critical of Norwegian economic policy. For instance, it disapproves of the high level of agricultural subsidies in Norway, and it expresses serious doubts whether the system of voluntary tripartite agreements is the correct instrument for reducing sick leave.
This year’s survey contains a chapter on the effectiveness of Norway’s public spending programs. The OECD expresses concern that the growing wealth from offshore oil production will complicate the implementation of necessary reforms.
To ensure a more sustainable fiscal policy, the OECD recommends that Norway consider supplementing the current fiscal deficit rule with an explicit expenditure rule and the introduction of multi-annual budgeting. The OECD also recommends that the private sector should play a larger role in providing public services. This can be done, the report suggests, by increasing the use of the principle that the money follows the user. According to the OECD this will contribute to an increase in competition and user choice, and ultimately to higher efficiency.
Increasing competition
Minister of Finance Per-Kristian Foss says that the OECD has produced a comprehensive and interesting analysis of Norway’s public spending policies.
"The recommendation that we should limit the growth in public spending is clearly in line with the ambitions set forth in the government’s Sem-declaration. The Sem-declaration also stresses the importance of modernizing the public sector. In fact in many areas we find that the recommendations offered by the OECD coincide with the government’s own modernization program. For instance, we are in full agreement on the importance of increased competition between public and private providers of public services", Foss stated.