General government revenue and expenditure, 2011

Petroleum revenue up more than 20 per cent

General government revenue from petroleum activities stems from taxes on income and wealth, taxes on goods and services as well as dividends from government-owned companies. For 2011, these sources of government income rose by NOK 70 billion, or more than 20 per cent, to NOK 364 billion. The observed volatility of petroleum earnings is due to changes in production volume, but also fluctuations in oil and gas prices and changes in currency exchange rates as most petroleum products are sold on the international market, which predominantly operates in US dollars.

General government revenue excluding petroleum, which consists of taxes from households and companies, social security contributions and various transfers, fees and charges, increased by 7 per cent to NOK 1 205 billion in 2011. Combined with moderate increases in expenditure, the surplus for 2011 is calculated to NOK 368 billion, nearly NOK 86 billion more than in 2010. The majority of the increase is thus explained by increased revenue from petroleum activities.

General government expenditure on services

Throughout the period 1995-2011, general government expenditure on production of services, defined as the sum of compensation of employees, use of goods and services, and consumption of fixed capital, has been relatively stable when measured as a percentage of the gross domestic product (GDP) for mainland Norway, averaging 27 per cent. The percentage was increasing until 2003, before decreasing the following years. The financial crisis, which began in autumn 2008, reduced the GDP. At the same time, government authorities initiated measures to lessen the negative effects of the crisis. This contributed to increased government expenditure on services. Over the last couple of years, the percentage of GDP used on government services has been stable.

In the aforementioned period, there have been several reforms affecting which sub-sector carries out the different services. As of 2002, central government took over the responsibility of the public hospitals, which were previously part of the county authorities (defined as part of the local government sector). This led to a significant increase in expenditure on production of services in central government. In 2010, responsibility for a large part of the classified roads was transferred from central government to the county authorities, again affecting the sub-sectors of general governments’ expenditure on services (see box).

Revisions to revenue and expenditure

General government revenue and expenditure have been revised since the last release. The revision is predominantly due to previously estimated figures being replaced by actual accounting figures. In addition, accrued taxes have been updated. As a consequence, both revenue and expenditure are adjusted downward, by NOK 8 billion and NOK 2 billion respectively.

Local government revenue up 8 per cent

Total revenue was NOK 382 billion in 2011, representing a growth of slightly less than 8 per cent compared to 2010. Tax income declined by nearly 4 per cent due to changes in the income system for municipalities. The changes involve a lower tax rate at municipal level and higher block grants from the central government, which have risen by about 14 per cent. There was also an increase in dividends received and withdrawals from the income of quasi-corporations.

Reduced local government deficit

Figures for local government show a deficit of more than NOK 23 billion in 2011; NOK 4 billion less than the previous year.

Total expenditure, the sum of expense and net acquisition of non-financial assets, grew by nearly NOK 23 billion, and totalled NOK 405 billion in 2011. Wages and salaries represent more than half of the total expenditure, and totalled NOK 210 billion in 2011; a growth of around 8 per cent. The figures show a modest increase in the use of goods and services, which grew by about 4 per cent.

Local government fixed capital formation has grown at a high rate in recent years. However, with an increase of less than 2 per cent in 2011, the growth rate has diminished. Reduced acquisition of fixed capital in public schools and kindergartens contributed to the low growth rate.

Tables

Published tables