Politics

Norway MPs had an remuneration freeze in 2021. This year’s increase will most likely offset it

Members of parliament of Norway were supposed to freeze their remuneration. But they will eventually have a raise, not only for 2022 but for 2021 also.

Storting, Norway parliament
The Storting, Norway’s unicameral parliament | © Stortinget, April 2021

Politicians in Norway have been facing an erosion of the public’s trust and it was decided in 2019 that they would freeze remunerations of members of parliament and members of government. It was also decided to freeze increases in light of the difficult context with the COVID-19 pandemic.

But public executives will in the end most likely have raises for 2022 and 2021, amounting to 76,321 kroner gross per year ($7,647), a 7.7% raise in 2022 compared to 2019. The remuneration increase in 2020 remains frozen, but the freeze for 2021 will merely be a postponement.

The president eventually agreed to follow the recommendation of the revenue committee, supported by three political parties that can get a majority in parliament.

If the new remuneration is passed, members of parliament will get paid 1,064,318 kroner gross a year ($106,638) from May 1, members of government 1,518,999 kroner ($152,184), and the prime minister and the president of the Storting 1,869,761 kroner ($187,338). This will be the first time members of parliament of Norway would get paid more than 1 million kroner a year, which is about twice as much as the average salary in Norway.

A 7.7% raise of parliamentarian remunerations between 2019 and 2022

Remuneration of MPs in Norway is decided by the Storting itself based on the annual recommendation of a separate Remuneration Committee created in 1996. The remuneration, which is not considered as a salary, for a member of the Storting was 987,997 kroner gross per annum ($98,991) as of May 1, 2019. They also have perks such as travel and telecommunication expenses covered.

The committee also assesses remuneration for members of the government, which was 1,410,073 kroner gross in 2019. This remuneration is linked to the prime minister’s. Remuneration for the president of the Storting was the same as that of the prime minister: 1,735,682 kroner gross per annum.

Remuneration and pay raises of local elected officials and many public sector employees are also linked to those of the highest executives.

But on April 2020, another committee was set up to audit all compensation schemes for public officials. An interim report was published on May 2022 and the final review should be ready by the end of January 2023.

Remuneration for MPs and members of the government were supposed to remain unchanged while the committee’s deliberations are still in progress. Because of this, no adjustments were made to MPs’ remuneration on May 2020.

This compensation audit was set up as the high degree of trust from the Norwegian population in its leadership has been eroding with a few controversies lately, such as the one about the commuter housing program that ended up forcing the former president of the Storting Eva Kristin Hansen to resign.

In 2021, the increase was frozen also given the context of the COVID-19 pandemic. But it turns out to be only a postponement after all. The remuneration for members of parliament will grow 76,321 kroner per annum ($7,647), from 987,997 to 1,064,318 kroner a year between 2019 and 2022, accounting for a 7.7% raise.

The remuneration committee on June 2 proposed to apply a 3.7% raise for 2022 following the frontline agreement, the year’s general wage increase of 3.7% (the inflation is expected to be 3.3% this year in Norway). But the raise would also be calculated after having applied a first increase of 2.7% for 2021.

The prorated remuneration growth will be 5.1% in 2022 as adjustments apply in May. But the actual raise based on the value of gross annual remunerations proposed by the committee will be 7.7%.

Remuneration for 2021 for members of parliament would be 1,028,011 kroner per year, or a 4.05% actual annual increase compared to 2019. In 2022, it will be 1,064,318 kroner per year, or a 3.53% raise compared to 2021. Prime minister and government members remuneration increases follow the same percentages.

The raise for 2021 will however not be retroactively applied, which means the new pay will only take effect from May 1, 2022. The freeze decided for 2020 has also been maintained.

A thin parliament majority can approve the “sober” pay raise

A few months ago, a previous recommendation from the committee, 45,000 kroner for 2020 and 2021, had already sparked controversy and was rejected by the president of the Storting Masud Gharahkhani.

Smaller than the one that is going to be voted on, it would have already allowed representatives of the Storting to get a remuneration above the symbolic threshold of 1 million kroner a year ($100,193).

The Labor Party, which rules the country in a coalition with the Center Party, wanted to cancel the raise. It considered it was bad timing and proposed the freeze to continue until the assessment committee draws its final conclusions on January 2023. The Marxist Red Party even advocated for a reduction of the remuneration by 200,000 kroner.

The Storting presidency, composed of the president Mr Gharahkhani, from the Labor Party, and five vice-presidents were unable to find a majority on the latest recommendation and to agree on the right scheme.

The first vice president Svein Harberg, from the Conservative Party, the second vice president Nils T. Bjørke, from the Centre Party, and the third vice president Morten Wold, from the right-wing Progress Party, supported the latest remuneration committee recommendation and considered it was a “sober” proposal. They pointed out that the two parties that oppose the increase “cannot see that there has been new information that provides a basis for changing” the remuneration.

The Storting decided on May 2021 that remuneration of representatives should follow the annual wage agreements. The audit in 2021 recommended the remuneration committee could continue its work under the same framework.

Mr Bjørke told Nettavisen that the decision on 2021 remuneration was postponed last winter to this year.

Combined together, the Conservative Party, the Center Party and the Progress Party can gather 85 seats among the 169 seats in the Storting, the thinnest majority possible.

In the end, the president Mr Gharahkhani, who supported to continue the freeze “until the clean-up is done“, eventually decided on June 13 to follow the recommendations of the remuneration committee.

The new remuneration for MPs and government members is scheduled to be voted at the Storting on June 16. This week is the last one of work before the Storting’s summer break.

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