Rise in labour costs Per cent 8  8 6  Norway  6  4  Trading partners  4  2  Euro area  2 0  0 1990  1992  1994  1996  1998  2000  In recent years, cost inflation in the euro area countries and among trading partners has been relatively low. Growth in labour costs in Norway has been roughly 11 percentage points higher than in the euro area and 10 percentage points higher than among trading partners in the past three years. Rise in labour costs  Rise in labour costs and unemployment 1995 and 2000. Per cent  8  Norway  6  Sweden Finland  4  Denmark Euro area  Netherlands  2  0 0  2  4  6  8  10  12  14  16  Unemployment as a percentage of the labour force  4  BIS Review14?/2001  A number of other small, open economies have recorded a decline in unemployment and lower growth in labour costs than Norway. In Sweden, unemployment has shown a substantial decrease over the past five years and wage growth is below 4 per cent. Three-year wage agreements are now being concluded, underpinning the basis for low cost inflation. In the Netherlands, unemployment has fallen to a very low level. Wage growth has picked up, but is lower than in Norway. In Denmark, unemployment has come down without an increase in wage growth.
Government assets and liabilities Estimates In billions of NOK Assets  Liabilities  Petroleum Fund Norwegian National Insurance Fund  390  Direct ownership  300  Minor holdings  100  Bonds and Treasury bills  170  50  State banks’ lending 165 Right to tax  Commitments of the welfare state  The previous table showing government assets and liabilities does not, however, provide a complete picture of the government’s financial position. The right to tax corporate and personal income and wealth and to levy indirect taxes is clearly the government’s most important asset. General government tax revenues are estimated at close to NOK630 billion this year. The expected real return on government net financial wealth is about a sixteenth of this. In 2005, when the value of the Government Petroleum Fund could reach NOK1200 billion, the total return on government financial assets will approach one tenth of general government revenues at the current tax level. At the same time, future expenditure on pensions, health, education, infrastructure and the judicial system represents a major commitment for the government. Government expenditure for maintaining and developing the welfare state will increase substantially in the years ahead, primarily as a result of demographic trends. Estimates show that government expenditure on old-age pensions and disability benefits will double from 7½ per cent of GDP in 2001 to 15 per cent of GDP in 30 years.