On 10 June 1998, the Government managed to secure a majority in Parliament (Stortinget) in support of the introduction of a child benefit scheme for parents with small children. The so-called child benefit reform has been one of the most controversial issues on the political agenda in recent years.
In June 1998, the Norwegian Parliament secured support for the introduction of a cash child benefit scheme for parents with small children. The general view among the social partners is that the scheme is an expensive reform, and the NHO employers' organisation is worried that it will lead to a reduction in the numbers of people employed in particular sectors of the labour market.
On 10 June 1998, the Government managed to secure a majority in Parliament (Stortinget) in support of the introduction of a child benefit scheme for parents with small children. The so-called child benefit reform has been one of the most controversial issues on the political agenda in recent years.
Under the terms of the scheme - which will be implemented step by step - parents will receive NOK 3,000 a month for one-year-old children from 1 August 1998, provided they do not occupy places in state-supported daycare centres. From January 1999, the scheme will also be applied to two-year-olds. Parents may choose to stay at home with their children, hire childminders or use daycare centres which are not receiving government funds, or they may choose to adopt a "time-account "arrangement whereby they receive reduced cash benefits and part-time places for their children in a daycare centre.
The child benefit reform proposal was circulated for public comment earlier in 1998. The general view among the social partners is that the scheme is an expensive reform, and for that reason it would not be wise to implement it, given the present state of the economy. The Directorate of Labour, in its response to the child benefit proposal, argued that the consequence of such a reform is likely to be a further shortage of labour in the Norwegian labour market, and tentatively estimated that this will result in an annual deficit of between 10,000 and 15,000 person-years.
The Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) wants to see the reform postponed, and is worried that it will lead to a reduction in the numbers employed in areas such as hotels and restaurants and other service-related industries. The Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) expressed its opposition on the grounds that the scheme would be a great blow to gender equality, and that implementing the reform would undermine the long-established cooperation between the social partners and the government on incomes policies. The Norwegian Union of Municipal Employees (Norsk Kommuneforbund, NKF), which is affiliated to LO, is worried that the child benefit scheme may drain the public sector of health service personnel and care workers. Surveys show that women in such low-paid groups would be more likely to make use of the scheme, because they would find it more financially advantageous to stop working.
Eurofound recommends citing this publication in the following way.
Eurofound (1998), Social partners sceptical about child benefit reform, article.
