The public sector can be divided into two sub-sectors: general government and public corporations. General government consists of central and local authorities and other non-commercial units that carry out a range of public tasks. The Storting (the Norwegian parliament), municipalities, public hospitals and schools are all examples of institutions that are included in general government. Public corporations are involved in commercial activities and are owned or controlled by general government. Public corporations include municipal enterprises such as waterworks and waste disposal sites and large listed companies in which the central or local government owns more than half of the shares.

General government

Authorities and roles

The general government is essential in a democratic and constitutional society. It ensures the provision of various common tasks on a national, local and international level. Authority is exercised through the legislative, executive and judicial branches of authority. General government is also responsible for the police service, law courts, prisons, national defence and foreign policies.

Service activities

General government provides services to its citizens, either for free or at low cost. The provision of services is extensive in areas such as health, education and care for the elderly and disabled. Furthermore, general government is responsible for infrastructure such as roads, railways, airports and ports.

Redistribution

Another task is the redistribution of income, which is partly carried out through the tax system. To ensure that everyone has a reasonable standard of living, general government provides benefits through the social security system. Some examples are unemployment benefits, sickness benefits and pensions.

Economic policies

The government is responsible for carrying out the decisions made by the Storting. One important instrument in order to influence the economic development is the fiscal policy. Another important part of the economic policy is the monetary policy, carried out by Norges Bank. Among other things, Norges Bank determines the policy interest rate.

Financing

The most important sources of financing are tax and excise. The central government prepares the tax programme for central and local government and also determines the income of the municipalities through transfers in the fiscal budget. The municipalities can influence their income to some extent by imposing property tax and fees on services.

Tax on income and wealth and contributions to the National Insurance Scheme (employer contributions and member contributions) are collected by local government.

Public corporations

A corporation is public when it is controlled by the public sector, which means that the public sector owns more than 50 per cent of the corporation. Public corporations are involved in commercial operations. They are divided into non-financial and financial corporations in the statistics. The non-financial corporations include large enterprises such as StatoilHydro, Telenor, Statkraft and Hafslund. However, the majority of the non-financial corporations are municipal enterprises engaged in transport, property management, waste management and electricity and water supply. The municipalities also own many sheltered firms that employ people who are unable to participate in the ordinary labour market.

Financial corporations include Norges Bank (Norway’s central bank), and public lending institutions such as the Norwegian State Housing Bank and the Norwegian State Educational Loan Fund. In addition, central and local government own and control several pension funds, life insurance companies, general insurance companies and other financial companies.