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August 27th, 2012

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Education and research will be the major winners in the government’s proposed 2013 budget, although it is from certain that the budget will find the political support necessary for it to pass in parliament.

The finance minister, Bjarne Corydon (Socialdemokraterne) presented the budget this morning.

“We are supporting employment through investment in infrastructure, for example," Corydon wrote in a press release beforehand. "We have also found more money for education so that young people can get the knowledge and skills that are needed in the future employment market. We are also implementing a responsible and trustworthy budget that complies with EU requirements and that keeps interest in Denmark down, benefiting home owners, businesses and consumers. With the budget’s focus on education, skills building and initiatives for finding work for the unemployed, we are taking another step in the direction of a stronger Denmark.”

Some 20.2 billion kroner will be handed out for research in 2013 – 4.1 billion more than in 2007 – with 596 million going towards research into new green energy sources.

Students will be supported with an additional 2.9 billion kroner to cover the costs of student grants and fees for the largest university uptake ever.

The government predicts that unemployment will top 164,000 this year and 158,000 next year. Thousands of unemployed are set to lose their unemployment benefits in January after the former government halved the length that people can claim the benefit from four to two years.

To support those affected, the government has found 600 million kroner that will be spent through 2016 on upgrading their skill sets.

This initiative is widely regarded to satisfy demands by the far-left party Enhedslisten (EL) who have insisted that the government include measures in the budget to help those who will lose out in January.

The government does not have an outright majority and so is unable to pass their budget without the support of either Enhedslisten or one of the opposition parties.

But EL announced that it was dissatisfied with the government’s initiatives for the unemployed, raising questions as to whether further compromises will be needed before the budget can be passed.

“The few funds that the government has set aside to educate the unemployed that are set to lose their benefits will in no way prevent thousands of unemployed and their families from being hit by a social catastrophe,” EL’s finance spokesperson, Frank Aaen, told Berlingske newspaper.

To help find the money for the extra education support, the government has axed subsidies for businesses to perform energy efficiency renovations. With energy efficiency playing a large part in the government’s energy plan from the spring, opposition party Venstre (V) has accused the government of shooting itself in the foot.

“Improving energy efficiency was included in the energy deal we agreed upon,” V’s  financial spokesperson, Peter Christensen, told Politiken newspaper. “We are going to have to ask the government how it will affect those goals if there won’t be any subsidies after all.”

Overall, the government managed to cut public expenditures from 672 billion kroner this year to 650.9 billion kroner next year and thus managed to comply with the new stricter EU requirements for national budgets. And with government spending only 0.1 percent more this year than last, they did not repeat this year’s 1.5 percent increase in government spending on the previous year, much to the delight of the libertarian party Liberal Alliance.

“We have sat through endless debates in parliament in which Liberal Alliance criticised the government for its wasteful intentions to increase its spending each year by 0.8 percent,” LA’s finance spokesperson Ole Birk Olesen said in a press release. “It’s wonderful that the government did not include this number in its budget.”

Olesen, however, went on to criticise the abandoning of the energy efficiency grants and argued that businesses should be offered some alternative support in order to stimulate economic growth.

In today’s budget announcement, the government stated that the budget, the economic kickstart, the energy deal and the planned renovations of public housing would maintain an economic growth of 0.6 percent in 2012 and 0.3 percent in 2013 while also creating 21,000 jobs in 2013.

2013 Budget | Key points

• A new Stormstrøms Bridge, costing 3.9 billion
• An earlier start to infrastructure projects, costing 15-20 billion kroner
• 300 million kroner to reduce fares on non-peak collective traffic in 2013
• The energy deal from the spring will cost between 90 and 150 million kroner through 2020
• An additional 2.9 billion for education
• 596 million for research into future energy sources
• 645 million between 2012 and 2016 for tackling youth unemployment
• Improving the skills of unemployed that stand to lose their unemployment benefits, costing 300 million in 2013 and 150 million a kroner a year in 2014 and 2015
• The ‘satspuljen’, a fund for social welfare projects, will be given 265 million kroner and will focus on children and young people, health of marginalised groups, integration and strengthened efforts for early retirees and flex workers
• New ‘super-hospitals’, costing 5.2 billion in 2013
• Psychiatric care will receive an additional 200 million kroner