Will cover fixed costs to save jobs
The government proposes a scheme that entails that the state covers a proportion of the fixed costs for companies that have a decrease in turnover.
The government proposes a scheme to cover fixed costs to save jobs.
The government proposes to create a scheme that entails that the state covers a proportion of the fixed costs for companies that have a significant decrease in turnover due to the outbreak of viruses and infection control measures. The ambition is that the scheme should be both easy to use and manage, and designed so that it takes a short time from application sent to the money is on account.
It is planned that the scheme will have a volume of NOK 10-20 billion per month, depending on how many companies will use it.
The scheme is probably aimed at small and medium-sized businesses that now experience income falling abruptly, but who still will have have fixed costs like rent, insurance and other expenses that do not disappear even if they reduce operations and leave employees. The goal is that the companies stay afloat and can more quickly contribute to creating value and jobs when the crisis is over.
Work is underway with Finans Norge on a solution where companies seek support through a central digital portal. The processing of the applications must to a large extent be automated and based on available register data. This will help ensure that the scheme can be implemented quickly and that the money is paid out as soon as possible.
The scheme is designed in close cooperation with both business organizations and the banking industry, through Finans Norge. The government will come back with the details in a week. The goal is for the solution to be operational as soon as possible (estimate: 2-3 weeks).
The arrangement of the compensation scheme will be based on seven principles:
1. The scheme must be effective and work quickly
The money will be paid out as a cash subsidy and benefit the business community as soon as possible. Using the banks and available registry data, rather than setting up a new bureaucratic organization, will help.
2. The scheme must be targeted
The support should go to companies with a significant drop in turnover. The compensation amount should cover unavoidable costs, such as rent and insurance.
3. The scheme must be temporary
The compensation should initially apply for two months, but may be extended.
4. The scheme must embrace broadly
The economic consequences of the outbreak of viruses affect the Norwegian business sector broadly and hit industries in need of assistance and unable to bear their fixed costs. By establishing a comprehensive scheme that strikes broadly, we reduce the likelihood of having to introduce small special schemes aimed at individual industries or cases.
5. The scheme should be simple
It must be as simple as possible to use and manage the scheme.
6. The scheme must comply with the state aid regulations
The scheme must be designed so that it does not conflict with the state aid regulations.
7. The scheme must be compliant and controlled
The individual company must apply for support on its own, and will be responsible for ensuring that the information is correct and not for abusing the scheme. It must also be possible to verify that the funds have been used in accordance with the scheme.
Details in the scheme are still missing
When the scheme was presented 27 March, the details were not yet in place. Issues like coverage, reduced turnover, how to avoid that the scheme is exploited by businesses that should not be covered by the scheme etc. are still being discussed.
The Government has stated that the details of the criteria shall be published Friday 3 April.