General government revenue and expenditure, 2010

General government’s total revenue for 2010 increased by NOK 62 billion¹ to NOK 1 410 billion¹ in 2010. The increase was mostly due to increased taxes on income and wealth, and taxes on goods and services. Total expenditure rose by under NOK 48 billion¹ to NOK 1 144 billion, mainly because of growth in social benefits in cash and compensation of employees.

Central government net lending: NOK 292 billion

Central government’s revenue increased by NOK 50 billion from 2009 to 2010. The increase was due, in large parts, to increased taxes on income and wealth from extraction of petroleum (up NOK 29 billion), but also revenue from taxes on goods and services (up NOK 20 billion), where especially value added tax and motor vehicle registration tax increased substantially.

Central government expenditure increased by approximately NOK 33 billion to NOK 911 billion in 2010. Social benefits in cash increased by NOK 18 billion. As of 1 March 2010, as part of the NAV (Norwegian Labour and Welfare Service) reform, vocational rehabilitation benefits and time-limited disability benefits are replaced by a work assessment allowance. There is therefore a break in the series for disability pensions and vocational rehabilitation benefits. However, in total, these expenses increased by NOK 6 billion from 2009 to 2010. Retirement pensions, also a component of social benefits in cash, increased by NOK 9 billon, while central government’s grants to local government increased by NOK 10 billion.

The deficits continue for local government

Compared with 2009, local governments’ revenue increased by NOK 20 billion to NOK 354 billion in 2010. Total expenditure rose to NOK 383 billion¹ in 2010; an increase of NOK 23.8 billion¹. For 2010 the deficit, measured by net borrowing, amounted to NOK 28.8 billion¹; NOK 3.4 billion¹ higher than the previous year. Except for a small surplus in 2002, local government has been a net borrower every year since 1995.

The increase in revenues in 2010 is mainly due to increased grants from central government and increased national tax on individuals’ income. Also, local government had proceeds from toll collection on classified roads and ferry services transferred from central government in 2010. Local governments’ total expenditure increased mainly as a consequence of increased compensation of employees, use of goods and services, and acquisitions of fixed capital.

Expenditure by function

Social protection is the largest group of expenditure for central government, and also shows the largest increase from 2009 to 2010. Social protection which, amongst others, includes benefits related to sickness and disability, old age, family and children, increased by NOK 20 billion compared to 2009.

In table 9, which deals with local governments’ expenditure by function, we find that the largest expenditures are related to social protection and education. However, the largest change from 2009 to 2010 is found under economic affairs, where the sub-group transport increased from NOK 18 billion to NOK 30 billion. This is mostly caused by the abovementioned transfer of roads and ferry services from the central government.