Strong growth in expenses has stopped


After several years of strong growth in government expenses on Svalbard the expenses dropped by 6 per cent from 2014 to 2015.


Figure 1. Expenses of public sector on Svalbard and domestic

While expenditure in 2015 was NOK 875 million, which is NOK 60 million less than the year before, the spending level was nearly 60 per cent higher than the level in 2010. The decrease from the previous year is due to lower expenses in the Norwegian Mapping Authority’s activities on Svalbard and the loss of subsidies to Kings Bay AS. Compared with the level five years ago, the growth of expenses has been strongest in knowledge-based activities, the Governor's transport services and local government of Longyearbyen.

Low taxes

The income of taxes corresponds to only about 40 per cent of the administration costs of Svalbard. Remaining expenses are financed by transfers from the state budget. The low tax revenues reflect the low tax rates. In 2015, the rate was only 8 per cent of earned income up to NOK 1.1 million. The level of taxation for companies is also significantly lower than elsewhere in Norway, and companies are not subject to the requirement to pay contributions and VAT.

More employed in knowledge-based businesses

The proportion of central government employment is bigger at Svalbard compared to the national scale. This is because knowledge-based businesses like Norwegian Polar Institute and the Norwegian Mapping Authority perform a relatively large proportion of their operations on Svalbard. In addition, the University Centre in Svalbard is a major employer in the Svalbard scale. On the other hand, several of the largest state employers, such as the Norwegian Armed Forces and the Norwegian Public Roads Administration, are not represented on Svalbard. Moreover, the hospital on Svalbard has relatively few employees since it carries a smaller range of services compared to hospitals elsewhere in Norway.


Figure 2. Expenses of public sector on Svalbard. 2015

The proportion of municipal employees is somewhat less than elsewhere in the country. This is because it does not perform nursing and care services on Svalbard.

Decline in employment in public corporations

The proportion of employment in government business is very high compared to nationwide, but the percentage had a substantial drop in 2015 as a result of downsizing in the state cornerstone enterprise Store Norwegian Spitsbergen Kullkompani AS. This downsizing has continued in 2016. The extent to which these jobs will be replaced by new jobs will have a major impact on the development of the public sector on Svalbard.