A tenth invested in fixed assets

Published:

Slightly more than 10 per cent of total government expenditure in 2016 was related to investments in fixed assets such as buildings, roads and railways, and research and development.

New figures from the statistics General government revenue and expenditure show that investments in fixed assets in 2016 constituted the largest share of total government expenditure in more than 25 years – and one has to go back to the late 1980s to find a higher investment share. Under normal circumstances, investments in fixed assets fluctuate more than other expenditures. This is because they are influenced by sizable one-off acquisitions made in the course of a few years. Construction of new hospital buildings and procurement of new fighter aircraft by the Norwegian Air Force are examples of investments that have contributed to higher investment expenditure in recent years.

Figure 1. Gross fixed capital formation in per cent of total expenditure
Figure 1. Gross fixed capital formation in per cent of total expenditure
Central government Local government
1980 5.0 6.5
1981 5.6 5.7
1982 5.3 5.0
1983 5.5 4.8
1984 5.5 4.5
1985 5.7 4.1
1986 5.5 4.8
1987 5.7 5.2
1988 6.4 5.1
1989 6.5 4.5
1990 6.6 3.8
1991 6.7 3.8
1992 6.6 3.5
1993 5.6 3.4
1994 5.5 3.5
1995 5.3 3.7
1996 5.3 3.7
1997 5.3 4.8
1998 5.6 4.6
1999 5.1 4.7
2000 4.4 4.2
2001 3.9 4.4
2002 4.8 3.6
2003 4.9 3.7
2004 5.2 3.6
2005 5.3 3.3
2006 5.7 3.6
2007 5.9 4.1
2008 6.0 4.1
2009 6.1 4.3
2010 5.1 4.5
2011 5.3 4.3
2012 5.2 4.1
2013 5.8 4.3
2014 6.1 4.2
2015 6.0 4.3
2016 6.2 4.6

Significant investments in roads and R&D

Expenditures grouped by function, or purpose, show that investments related to construction and maintenance of public roads form the largest investment group. In 2016, these amounted to approximately NOK 33 billion, which corresponds to 20 per cent of total fixed asset investments. Two thirds of the total amount was spent by the Norwegian Public Roads Administration – a government body responsible for all national roads. The rest was spent by the municipalities and county authorities in the local government sector.

Research and development (R&D) expenditure is classified as investments in fixed assets in the framework of this statistics. In 2016, public R&D investments are estimated at NOK 25 billion – a share of 15 per cent of total investment expenditure. The R&D activities take place in universities and state university colleges, hospitals, and public research institutions.

Figure 2. Gross fixed capital formation by function. 2016
Figure 2. Gross fixed capital formation by function. 2016
Central government Local government
Culture 0.88 7.36
General public services 5.44 3.93
Railways 13.78 0.92
Defence and public order and safety 14.84 0.87
Environment protection and housing 0.06 19.45
Health and social protection 9.01 10.52
Education 4.50 15.73
Research and development 24.86 0.00
Roads 21.33 11.47

New tax figures incorporated

New information on tax revenues from personal tax payers and companies have been incorporated into the statistics. As a consequence, both total government revenues and surplus have been revised upwards in 2015 and 2016.

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