Norway's Labour Party Wins Re-election as Wealth Tax Debate Intensifies

In Norway's parliamentary elections held on September 8, 2025, Prime Minister Jonas Gahr Støre's Labour Party-led coalition secured re-election, obtaining 88 seats in the 169-member Storting and surpassing the 85-seat threshold required for a majority. This outcome reflects the electorate's preference for continuity amid global uncertainties and domestic economic challenges.

The Labour Party garnered approximately 28% of the vote, a slight increase from the previous election. The right-wing Progress Party, led by Sylvi Listhaug, achieved significant gains, doubling its vote share to 24% and becoming the second-largest party. Despite this surge, the Progress Party was unable to form a coalition due to limited support from other right-leaning parties.

A central issue in the campaign was Norway's longstanding wealth tax, which imposes a levy of up to 1.1% on net assets exceeding 1.76 million kroner (approximately $176,000). The Labour Party advocated for maintaining the tax, emphasizing its role in promoting economic equality and funding public services. Conversely, the Progress Party called for its abolition, arguing that it penalizes entrepreneurs and hinders economic growth. Listhaug stated, "The money paid in wealth tax could have been spent creating businesses, new jobs, and more innovation."

The debate over the wealth tax intensified following the 2022 removal of certain exemptions, which led to an exodus of ultra-wealthy Norwegians to countries with more favorable tax regimes. Notably, billionaire Kjell Inge Røkke relocated abroad, sparking domestic controversy and further polarizing public opinion on the tax.

During Støre's first term, Norway faced economic challenges, including surging inflation and interest rates. Inflation peaked at 7.5% in 2022 but declined to 3.3% by mid-2025, prompting the central bank to implement a rate cut aimed at stabilizing the economy. Despite these hurdles, Norway's substantial oil reserves have contributed to a sovereign wealth fund valued at approximately $2 trillion, reinforcing its status as one of the world's richest and most egalitarian nations.

The election also highlighted the growing influence of social media in Norwegian politics. Platforms like the YouTube channel "Gutta" played a significant role in mobilizing younger voters against the wealth tax, reflecting broader dissatisfaction among youth regarding issues such as immigration, crime, and green subsidies.

Despite internal party unrest and cabinet scandals, including high-profile ministerial resignations, Støre's administration managed to retain power. The return of Jens Stoltenberg to domestic politics as Finance Minister and the Centre Party's exit from the coalition are credited with bolstering the Labour Party's resurgence.

The election results are not expected to shift Norway's foreign policy, as the country remains committed to NATO and continues its support for Ukraine.

In summary, the 2025 Norwegian parliamentary elections reaffirmed the electorate's support for the Labour Party's social democratic policies, underscored the contentious nature of the wealth tax debate, and highlighted the evolving political landscape influenced by economic challenges and youth engagement.