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Teeqoz on 21 April 2020
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Mummelmann said:
Teeqoz said:

You finally made me post here because there are so many half truths and falsehoods in this post that I had to address it...

The oil industry makes up 14% of GDP and 19% of government tax revenue, plus a few percentage points for offshore service industry. (https://www.norskpetroleum.no/okonomi/statens-inntekter/)

Of the many oil companies that operate in Norway, the government has a significant ownership in one of them (Equinor), where they own 67%.

In addition, over 50% of petroleum exports from Norway aren't oil, but natural gas, where the price has fallen much less. 

Sorry, got some figures jumbled up, oil and gas provide roughly 35% of the state's income (oil alone is just under 22%), but not nearly as much GDP. My mistake. My point wasn't the figures themselves though, but rather the potential consequences of the state losing massive income rather than private interest, and that this loss is offset further due to the immense productivity and profit per capita and employee that this sector allows. In other words; the private sector losing relatively few jobs and a large income is more desired than the state losing relatively few jobs and a large income.

Half-truths and falsehoods, again, I messed up the numbers. My biggest concern right now is whether the ongoing crisis will deplete more of the oil fund and cause issues a couple of decades from now (eldrebølgen) since these are basically future pensions and state commitment to a massive public sector with fairly highly paid administration and other groups making up an unusually large percentage of it (presenting problems in profitability and productivity per capita).

Norway's economy is deemed highly stable and has been for a long time, in no small part due to clever investment and good economical equilibrium between the public and private sector, but its biggest weakness is the relative level of wages and income across a workforce that is both lacking actual contribution is production and industry as well as employed within the public sector in very high numbers. My parents happen to be in the middle of the generation that will see the biggest impact of these potential weaknesses, especially if and when a prolonged shutdown and subsequent economic downturn forces the government to forego their percentage rules on expenditure covered by the oil fund (handlingsregelen).

But we digress (at least somewhat).

Your numbers are still wrong though...

 https://www.statsbudsjettet.no/Statsbudsjettet-2019/Satsinger/?pid=89003

Petroleum (which includes both oil and gas) contributes 313 Bn of 1430 Bn in government revenue. Or 21.8%. (just check the source)

If an important point of what you are saying is the numbers, and you proceed to mess them up completely, those are falsehoods and half-truths, whether intentional or not.

The offshore oil and gas sector in Norway has contributed tremendously to the Norwegian economy, but it has also led to a "brain drain" from other potentially productive industries because oil and gas was where the money was. As this changes, other industries will pick up some of the slack from lower oil and gas revenues. And while oil and gas will suffer dramatically in the short term, the long term outlook remains largely the same (whether that was good or bad up front is irrelevant because that wasn't because of the current crisis. Revenues were always bound to decline in the long term).

The worst case scenario is that we will have to transition towards something more akin to Sweden, Finland and Denmark, and we have an oil fund equivalent to ~3x GDP (~8x annual government expenses) to help us with this transition that will take many decades. So we will be perfectly fine, because we have been planning for a future without oil since the beginning.