The government's immediate measures to curb the economic impact of the coronavirus

Press Release | Date: 13.03.2020

| No: 45/20

The government is now presenting the first and necessary immediate measures to secure jobs and help businesses in a demanding situation.

The comprehensive measures taken in recent days both here at home and in many countries are necessary to limit infection. They have consequences for the individual, for Norwegian companies, jobs and employees, and for society at large. Large parts of the economy are affected.

• See the press conference on March 13, 2020 for admission

- It is difficult to say what the consequences will be and how long they will last, but we know that it is likely to get worse before it gets better. Our actions now are therefore the first contribution to avoiding unnecessary bankruptcies and dismissals. We must ensure that we have jobs to go to at the other end of this crisis, ”says Prime Minister Erna Solberg.

- Fortunately, the Norwegian economy is fundamentally solid. We have a good starting point. Unemployment is low, we have profitable companies and solid banks, and we have room for maneuver in economic policy, says Finance Minister Jan Tore Sanner.

- It is important to secure liquidity now, and therefore four measures have already been put in place: Norges Bank has reduced interest rates, countercyclical capital buffer has been reduced so that banks can have the freedom of action to finance business in the time to come, and Norges Bank will offer extraordinary short-term loans to the Norwegian banks. In addition, the self-employed can defer payment of the withholding tax, says the finance minister.

The Government is working on three phase measures:

• Immediate action is now being taken to avoid unnecessary bankruptcies and layoffs for companies that are acutely affected by the virus outbreak.
• In the near future, we will work on further concrete measures, both for industries and companies that are particularly hard hit, and for business and industry as a whole.
• We also consider broader measures to maintain the activity if necessary.

The Government emphasizes that the measures implemented should be targeted, effective and reversible.

- Let me emphasize that the priority measures we are putting forward today are just the beginning. The government will shortly return - before Easter - with new measures, says the prime minister.

In this first phase, the government has prioritized the following measures:

• Measures in the health care system to deal with the emergency situation.
• Reduce the number of days of payroll pay for employers on layoffs from 15 to 2 days and eliminate the waiting days for unemployment benefits for those who are laid off. At the same time, the requirement to reduce working hours in order to receive unemployment benefits during lay-offs is reduced from 50 percent to 40 percent.
• Changes in tax rules so that companies that make a loss can reverse the loss against taxed profits from previous years.
• Change in tax rules so that owners of deficit companies should be able to defer payment of wealth tax. It will provide liquidity assistance to owners of such companies as early as 2020 through reduced payment of advance payments.
• Temporary cancellation of the air passenger fare for flights between January 1, 2020 and October 31, 2020.
• Temporary cancellation of all airport fees up to and including 30 June.
• Strengthened support for competency enhancement and corporate training in companies affected by the outbreak of virus through increased framework grants to county municipalities.
• Increased allocation of discretionary funds to municipalities that have incurred higher costs in connection with the outbreak of viruses.
• Changes in the pension rules so that current retirement pension does not fall away or be reduced by voluntary or ordered service for health personnel in connection with the corona outbreak.

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More information on the various measures

Measures in the health care system: 

• The government proposes to take measures in the health care system to deal with the emergency situation. We must safeguard the necessary access to medicines, medical devices and resources to conduct necessary corona tests.
• Efforts may be needed from health care professionals who have retired. We therefore propose a legislative change so that efforts in connection with the outbreak of virus do not lead to a reduction of the pension.

layoff rules

• The government proposes to reduce the number of days of payroll pay for employers on layoffs from 15 to 2 days. This will allow companies that experience a temporary failure in demand or production disruptions to get better liquidity by reducing their costs quickly. In this way, the reduction in the number of days of paid leave during layoffs can help to avoid dismissal. The measure will be temporary until 31 October.
• The government proposes to cancel the waiting days before the unemployment benefit starts for those who are laid off. This will reduce the loss of income for laid-off workers. The measure will be temporary until 31 October.
• The government proposes to reduce the requirement for working hours reduction from 50 per cent to 40 per cent for entitlement to unemployment benefits during layoffs. The measure will be temporary until 31 October.

Reversal of deficit against taxed profits in 18/19

• The government proposes temporary access to return up to NOK 30 million of corporate deficits in 2020 against taxed profits the previous two years. Today, such deficits must be carried forward and deducted against future profits. The tax value of losses in 2020 will be paid to the companies at the tax settlement in 2021.

Deferred wealth tax for business owners

• The Government also proposes a temporary scheme with deferred payment of wealth tax on business assets for the 2020 financial year. when it becomes due for payment in 2021.

Removal of air passenger fare

• The Government proposes a temporary lifting of the air passenger fare for flights from 1 January 2020 to 31 October 2020.
• The government proposes to temporarily remove all airport charges (Avinor) through June 30.
• The airlines pay fees to Avinor AS for use of the company's services and infrastructure. Three of these fees go to the financing of the airports, and two of them go to the financing of the flight security services. The seriousness of the crisis means that the government believes it is necessary to make temporary changes to airport charges.

Allocation for internal training

• The Government proposes to increase support for skills enhancement and corporate training. During a period of lower activity, it may be beneficial for companies to increase their efforts to strengthen the skills of employees. The county municipalities will receive increased funding for this purpose in order to meet regional needs. This will benefit both employees and companies in the slightly longer term.

Increased funding for municipalities that have incurred additional expenses in connection with the outbreak of viruses

• The government proposes increased allocation of discretionary funds to municipalities that have incurred higher costs in connection with the outbreak of viruses.

Loan arrangement in Innovation Norway

• In the policy instrument, and especially in Innovation Norway, there are several schemes that offer loans, guarantees and capital to companies. Innovation Norway has broad contact with the business community, offices throughout the country and close cooperation with the banking sector. Innovation Norway can also refer companies to other parts of the policy instrument, if it is more relevant to meet their needs.
• It is the private capital market that is, and should be, the most important source for financing Norwegian companies. However, Innovation Norway is a supplement and often collaborates with local banks. Innovation Norway's low-risk loan scheme, innovation loan scheme and guarantee schemes are considered to be the most relevant in a situation where companies should face temporary liquidity challenges.