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Norway PM doubles down on tax cuts in bid for second term

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Norway PM doubles down on tax cuts in bid for second term

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By Joachim Dagenborg ARENDAL, Norway (Reuters) – With four weeks to go before an election that is too close to call, Norway’s Conservative Prime Minister Erna Solberg pledged on Monday to cut taxes to boost growth and job creation if she was reelected. (For grpahic on Norway parliamentary elections, click http://tmsnrt.rs/2ugJCjo) In power as head of a minority coalition government since 2013, Solberg is attempting to become the first right-wing prime minister to win re-election in more than three decades. While taxes, unemployment and a rural backlash against government reforms are hotly debated, opinion polls show a near dead heat between Solberg’s right-wing coalition and centre-left parties seeking to replace it in a Sept. 11 vote for parliament. Support for the main opposition Labour Party, which seeks to hike taxes on high earners and the wealthy, has slipped slightly in recent weeks, erasing the narrow lead held by the centre-left in most polls during spring and early summer. “We must get across the message that Norwegian politics won’t have to go left when it’s so obvious that the economy is improving and jobs are being created,” Solberg told Reuters on the sidelines of a news conference. She highlighted spending on education and transport, as well as “growth-enabling tax cuts” as key priorities ahead. The price of oil, Norway’s key export, fell by more than 70 percent from 2014 to 2016, lifting unemployment to a 20-year high of five percent last year, but crude has since staged a partial recovery and the jobless rate has eased to 4.3 percent. The government sharply raised spending from Norway’s $975 billion sovereign wealth fund, the world’s largest, to aid the recovery, but the growth in public spending should moderate now that growth is normalising, Solberg added. An Aug. 11 poll by Respons on behalf of daily Aftenposten showed Labour and two key backers, the Centre Party and the Socialist Left, obtaining a combined 44.6 percent support, down from 46.3 percent in June, while the government and its backers rose to 47.1 percent from 46.3 percent. The outcome of the vote could ultimately be decided by the fate of several small parties, including the right-leaning Liberals, the far-left Reds and the un-aligned Green Party, that are all battling to overcome a four-percent election threshold.

(Writing by Terje Solsvik, editing by Gwladys Fouche and Toby Chopra)
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