Good evening, everyone!

It is an honor for me to speak to you today, about Norway’s experience with taxing the riches of nature and sharing the prosperity from national resources.

We humans have always depended on harvesting the resources given to us by nature.

Natural resources have generated massive wealth in many countries, countries which are lucky with what nature has provided to them.

And in my remarks today, I will talk about the Norwegian experience, which I think is relevant across borders.

Thanks to important political decisions in history, Norway has managed to make sure that this wealth does not go directly to a small group of powerful people, but rather to the wider population.

Through many Norwegian generations, we have asked: Who should benefit from these values that come from nature around us, in our country?

A few people?

Or everyone living in Norway?

And politicians both in the past and today have ended up deciding that this wealth should benefit the whole of society.
We have been lucky that the people with the power to make decisions have chosen to put society as a whole first.

An important starting point to do this is to ensure national control of natural resources. And a decision that all of society should get a fair share in the value created from using the natural resources, which we jointly own.

Norway is quite an equal society. But still there are some really rich people in Norway, and others with less.

There are many smart and hard-working people – and some of them have made big financial gains because they have had access to the country’s natural resources.

But the rest of the people in the country have also benefited from this wealth.

This is what I want to tell you about today.

The story of our economy has been shaped by our natural resources and sharing their value for businesses, individuals, and society as a whole.

And I think we need to ask whether there are new resources that we should treat in the same way. Not in Norway alone, but on a global level.

When we think about natural resources, we often think about physical things we can see and measure, like land, forests, oil and hydropower – rivers and waterfalls. I will come back to these things.

But I also want to consider the worldwide digital economy and put it in this context.

It has grown two and a half times more than the global economy in the last 15 years.

*

What is the one major resource that the technology industry uses? The foundation that allows a few central players to create enormous wealth?

It is our data.

My data. Your data. And the entire digital history of modern civilization.

You probably have a phone in your pocket – or hand – right now, sending and receiving data while you are sitting here listening to me.

The information that you and I leave behind us on all the different digital platforms.

The new raw material being sold is human data.

The industry that uses the data is also in absolute control of the infrastructure – the digital platforms.

The digital economy creates fantastic opportunities, but this is one of many challenges.

Who owns the data?

Can anyone just take it and create wealth from it?

Or does it belong to everyone?

There are a lot of questions.

Let’s start with the big and central ones.

Should we have a common goal for how to manage the resources and share the wealth generated from this digital economy?

Can the value that comes from these assets benefit the majority, and contribute to a better quality of life for everyone?

I don’t have all the answers, standing here in front of you.

But I am convinced we need to ask the questions. And find the answers together.

And I hope that the experience Norway has from the last hundred years, may be useful and relevant to the discussion.

*

It all started with water. The story of hydropower.

Let’s go back a hundred years, to find the roots to the Norwegian approach to jointly owned assets and fair distribution of value.

It all started with this (picture of waterfalls).

Hydropower. In Norwegian we have called it white gold.

Water is a fantastic resource.

It creates huge amounts of clean and renewable energy in Norway.

We are really lucky.

Just by nature, due to the mountains, our rivers flow through lots of waterfalls.

These are sources of energy that can be used. You have it in Brazil too.

The question is – who does the waterfall belong to? And who owns the right to earn money from using it?

*

In 1879 the American economist Henry George wrote the book “Progress and Poverty”.

He is best remembered for his ideas about tax on the extra income from natural resources, the so-called “land rent”, or more generally the “resource rent”.

Henry George had seen the massive speculation and property price increases in San Francisco, in the time before the first railroad across the continent was completed.

The railroad companies harvested a lot of these profits.

George argued that the income from the extra value of land because of the railroad should be owned by everyone.

Not just the few people who could earn a lot of money because they controlled the land around the railroad.

These ideas about resource rent and taxation reached Norway, on the other side of the Atlantic.

Towards the end of the 1800s, Norway was formally controlled by Sweden.

We gained full independence in 1905.

It was a time of strong development of industry.

And a period where it was important to secure income for the new, independent nation.

During the last half of the 19th century, investors had started buying up land with waterfalls in Norway.

The waterfalls they bought, could generate power to drive heavy industry.

There was not much capital in Norway at that time.

In 1906, three quarters of the waterfalls which were developed for industry, had foreign owners.

Our white gold was not under national control.

We risked that all the resource rent from the hydropower produced by the Norwegian waterfalls was being channeled out of the country, and not for the benefit of the Norwegian people.

Could it be changed?

*

It is no surprise that these questions caused tough political fights back then. Like they do today.

Some politicians believed that Norway needed to get control over its own natural resources, and the value generated from using the resources.

Others thought this was madness: That it would scare away investors and much-needed capital.

An active political debate ended with victory for the ones who argued in favor of national control of important natural resources – and the extra income.

We secured national control of the assets and later taxed the income from them, to benefit the whole Norwegian people.

This is how we managed the riches from the waterfalls. And this is what we did about 70 years later, when we found oil.

From water to petroleum

This (picture) is Troll A.

It’s a gas production platform in the waters off the coast of Norway.

The world’s tallest movable man-made structure. As you can see, taller than the Eiffel tower.

And it’s a symbol of how huge the Norwegian oil industry has become.

It was our experience with hydropower, inspired by the thinking of Henry George, which formed Norway’s approach to managing the newly discovered oil riches.

Norway’s oil and gas policy today is to collect a large portion of the profits for society as a whole – and manage the wealth this gives us with a long-term perspective.

We do this through ownership and the tax system, including resource rent tax.

We found oil in 1969.

Soon after, the parliament decided that a large share of the profits from oil should go to the Norwegian people – society as a whole. At the heart of this was national control and the tax system.

It is important to say: Public control does not exclude private stakeholders and business. Norway depends on skills and innovation in the private sector.

But while the industry needs to make a profit, it must share the income from extracting oil and gas with the Norwegian people.  We jointly own these natural resources.

The understanding we have developed over time is that the oil wealth belongs to the whole of the Norwegian people, not just a powerful few. And not just today’s Norwegian people, but also future generations.

To ensure this, the Norwegian State Petroleum Fund was set up in 1990. This was a fund to secure our future pensions.

The Governor of the Central Bank, Ida Wolden Bache, will talk more about this afterwards.

The value of the fund right now is close to 1.7 trillion dollars, more than four times the GDP of mainland Norway.

The profits from this fund help us provide good public services today, and in the future. In 2001 we introduced a fiscal rule how to spend the income from petroleum.

The fiscal rule means we can use some of the money in the annual state budgets – but over time no more than 3 per cent of the fund’s value per year. That is the expected real return of the Fund.

The basic idea is – firstly – that we should gradually phase in the income from oil and gas into the economy in a responsible way.

And – secondly – we should keep the capital in the fund for the generations that come after us.

In this way all our children and grandchildren will also enjoy the wealth ​​we generate from the petroleum assets.

*

We are also mindful about the dilemmas of managing oil and gas wealth, in the context of the climate threat.

This is a large and important topic.  Consideration of the environment and climate is a major part of Norwegian policy towards the petroleum industry.

But today I will focus on Norway’s experience and how we manage and distribute the extra value from natural resources.

*

So, the blueprint for how we manage valuable resources in Norway goes back more than 100 years.

Recently, we took this tradition and applied it to some new industries that have extraordinary profits from access to the country’s commonly owned natural resources:

Onshore wind power and aquaculture.

Again, there was a lot of debate.

But in the end, parliament decided on resource rent tax to share the profits with the people.

*

Your data: whose profit?

As you know, I am here for the G20-meeting, which Brazil is hosting now.

And I have to say, you are fantastic hosts.

It is really useful for Norway to join these meetings.

And I am happy to be here to share Norway’s experiences.

*

Now I want to connect these experiences to reflect on the global perspective.

Business is global, people are more connected across the world. We have started to think globally about tax.
Successfully!
And we are working together globally to develop solutions.

I have been talking about tax as a good thing.
As a Minister of Finance, I know very well that many do not think of tax that way.
But let me underline that fair taxes are good for society when used for the benefit of the people.

Brazil’s presidency of the G20 has put hunger and poverty at the top of the agenda. Together with sustainable development and a fair energy transition.

I warmly support Brazil’s agenda. Governments need revenues to achieve these important goals.

A good tax system and fair distribution is key to create a better society, a society for all.

This is why I hope the Norwegian experience can be useful.

The countries in the OECD and G20 – along with dozens of other countries – are cooperating to meet the challenges of taxing the digital economy.

Not least how to make sure that taxation is fair, both for business and citizens, in all our countries.

We have worked together for a long time to achieve harmonized rules.
These frameworks suit today’s digital business models, and hopefully the businesses of the future as well.

For me this work is interesting, and exciting.

And – in light of how we Norwegians have thought about taxing natural resources like water, oil and gas – I am also inspired to look into new issues for fair global taxation.

In the global digital economy, one sector with extraordinary profits is the tech companies.

They earn a lot of income from using the data of humans. It’s a digital natural resource, as I mentioned at the start.

Let’s return to the American thinker Henry George for a minute.
In the late nineteenth century when the railroad was expanding westwards, he was interested in the extraordinary income that could be generated, from the extra value of central land.

What if he had been alive today?
How would he have looked at the digital platforms and large-scale A.I. models?
Could we consider it as something like digital railroads?

A few companies earn their superprofits through building the digital infrastructure. And they depend on our data to generate profits.
Not just our joint digital history, but also our thoughts, emotions, expressions and interactions.

Everything your mobile phone and smart watch registers.

What you search for on the web.

Where you look on the screen. For how long.

How you are feeling.

What triggers your happiness, or what makes you angry.

The total of all of this is very valuable. Extremely valuable.

Thousands, millions, billions, of people join together on digital platforms – and just a handful of companies are controlling them.

The asset, the resource they can earn from, is me. And you. Our data. Our values.

Like the land, the oil, the waterfall, the power – our data is the resource.
It forms the basis for the super income the platform owners can extract.

And just imagine what A.I. is going to do with the potential to generate even more income from this precious resource.

Their business models only work because of data from you and me – and human history. Our common story. This is what adds the value.

So, should we be thinking of our collective data as the new jointly owned property? The natural resource?

And if this resource generates super-profit, how should these enormous values be shared?

Of course, the businesses who invest time, knowledge, capital – and take risks, should get returns for their efforts.

But shouldn’t we – at the same time – think that the value generated by using our common property, our data, should also come back to the global community?
To benefit society as a whole?

Is this a direction for sharing the wealth generated in our digital world today?

Can it be, that our data is a resource which generates superprofit, and is something which should be taxed across the worldwide digital economy?

I don’t have all the answers.
No person or country can answer it alone.
We need to continue working together internationally and find a joint approach.
Common challenges call for common solutions.

But I will say that our history in Norway shows that it is possible to create and share significant value from natural resources. And it can benefit both business and the people as a whole.

We must learn from our history and joint experience when we tackle these new challenges.

Data is different. While physical natural resources can be taxed nationally by individual countries, the digital world is global.

It needs global cooperation.

I want to ask: Is it fair, for a small number of people or businesses to become superrich from taking all the wealth generated by a natural resource – in this case data, from human thoughts and values?

I don’t think it is.

*

All of you have a mobile phone. In your bag, your hand or pocket right now.

Next time we look at our phones, let us all remember the value of our data.

And that we are a valuable resource.

We must find a fair way to distribute the financial gain from using our data, to the benefit of those who actually generate the resource. The true owners.

Humankind.

*

Friends, the Governor of the Central Bank of Norway, Ida Wolden Bache, will tell us more about having the whole population as shareholders – and how we manage the wealth that we have gained from taxing our natural resources.

But, just before you give her a warm welcome:

Remember always,
when your phone is active, someone earns money on that.
And it’s not you. Not yet.

Many thanks for your attention!

Source – Norwegian Government