7M KRONER IN CRISIS AID FOR SVALBARD’S ‘EXEMPT’ LAID-OFF EMPLOYEES: Preliminary plan by Norway’s government offers 20 days of benefits, effective until June 20

crisisplan

Svalbard residents exempt from regular unemployment/insurance benefits because they are from non-EU/EEU countries will be eligible for 20 days of benefits until June 20, according to a preliminary crisis plan announced Friday by Norway’s government.

The Svalbard section of the nationwide plan – drafted due to a March 19 request of Parliament, which will need to approve the final proposal – is “a one-time limited crisis package for Svalbard because of the consequences the coronavirus has had and will have for the settlements in Svalbard,” the report states.

“Employees as mentioned above and registered in the population registry with addresses in Longyearbyen will be able to receive benefits based on social assistance rates for up to 20 days, up to June 20,” the plan states (which, practically speaking, means four five-day work weeks). “For families with children with a registered living time of at least six months benefits may be received throughout the period up to June 20.”The Svalbard section of the preliminary report does not specifically address requests by the Longyearbyen Community Council for reimbursement of any reduction in municipal fees, which currently total tens of millions of kroner a month, or funding for infrastructure projects using laid-off workers. But the Ministry of Finance declared in a statement “we expect that municipalities are likely to receive increased social assistance expenses because many have lower income than usual. There may also be municipalities that receive increased expenses because (of people who) have to quarantine.”

Many specifics of the “exempt” assistance – such as whether any will be received by self-employed residents owning businesses and freelance employees who represent a large percentage of seasonal tourism workers – remain to be defined.

“Right know I do not know all details are of how these benefits will be handled and provided, but like all the measurements done these days I expect there will be more details later on,” Terje Aunevik, a council member and head of the Svalbard Business Association, stated in an online interview. “In my point of view there should not be any difference for freelancers/self-employees compared to people with regular working contracts.”

While some local residents quickly raised questions about the 20-day compensation limit – far less than other “eligible” residents can receive – Eirik Birger, a longtime resident and deputy mayor until last fall’s election, stated on his Facebook page “we can hope to think that if this stretches out in time, then more will come.”

“The government has acted fairly quickly until now,” he wrote. “This is the third proposition that has come in a very short time related to the coronavirus situation.”

The plan’s seven million kroner allocation nearly matches the 7.5 million sought by the council in its request for exemption-specific help.

Also, the requirement for a Longyearbyen address suggests those working in other Svalbard settlements – including Norwegian-controlled Ny-Ålesund, Bjørnøya and Hopen – are ineligible in the preliminary plan, although virtually all employment there involves government entities with “eligible” employees. The Russian-operated settlements of Barentsburg and Pyramiden are also exempt from the special benefits, although no layoffs have been announced.

The release of the plan comes the same week the Norwegian Labour and Welfare Administration reported a 95 percent nationwide jump in unemployment claims the past two weeks, resulting in the highest unemployment rate since World War II and Svalbard the highest ‘locality’ rate at more than 14 percent, compared to 10.4 percent nationally. About 90 percent of Longyearbyen’s tourism workers are being laid off and about 300 – near or exceeding a majority – are ineligible for benefits.

Also released Friday showing worst-in-Norway figures for Svalbard was a survey by the Confederation of Norwegian Enterprise, the country’s largest business/employee lobbying association. One-third of respondents nationally stated there is a serious possibility their companies will go bankrupt, 50 percent have made layoffs and 75 percent say more are possible near-term. In Svalbard, half of respondents say they’re facing bankruptcy, 75 percent have made layoffs and 50 percent report more are possible.

Among the measures in the government’s national plan released Friday – touted as a phase-two step following a large-scale funding of immediate measures after coronavirus cases in Norway necessitated major restrictions, with at least a longer-term phrase three to come – is five billion kroner in business assistance via entities that have funded Svalbard entities, including 2.5 billion kroner for Innovation Norge which targets “small and medium-sized growth companies with development projects.”

The government is also proposing 100 million for the Travel Guarantee fund that will “give those who have purchased a package trip the right to get all their money back within 14 days, should they have to cancel the trip due to extraordinary circumstances.”

“Companies that offer package tours are now experiencing many cancellations,” a ministry statement asserts. “It hits them hard. The government is now introducing several measures to help the industry and customers.”

Longyearbyen is included in a proposal for the state compensating “for the loss of income from parental payment by closing kindergartens, and after-school activities as a result of the virus outbreak.” However, “the government does not plan to compensate for the loss of dietary allowance, since these are mainly expenses that lapsed on closure. Compensation for cancellation of parental pay and ordinary allowance will be reduced if employees are laid off or if already paid parental pay is not refunded.”

Besides the high number of benefits-exempt residents, total coronavirus-related assistance to Svalbard on a per-person basis is likely to be lower in several aspects since public services are lower due to the archipelago’s exemption from the mainland’s 25 percent value-added-tax and residents generally pay either percent income taxes (or 16.2 percent for foreigners to cover insurance benefits) compared to 28 percent on the mainland.