Mr. Svein Gjedrem:

All Norwegian Government oil money goes into the fund. The three sources of our oil income are taxes, direct government ownership of shares in the oil fields and surpluses from Equinor, an oil company that is part-owned by our government. We take all of the oil money into the oil fund and the fund has to finance the non-oil deficit in the fiscal budget. Petroleum income goes into the fund and we transfer enough of it into the fiscal budget to finance the fiscal deficit.

When deciding on the non-oil deficit, we follow a fiscal rule – the government should, over time, only spend the expected real return from the fund. As such, there is a link between the real return and the fiscal deficit. When considering establishing a fund, it is important that Ireland not let the fund's size impact the fiscal trajectory of its ordinary budget. There is a temptation to have a fiscal deficit and to spend more in the budget while building up a large net fund. Having a rule so as to avoid slippages in the ordinary fiscal budget is important.

I will respond to the Deputy's question on the reason for not financing domestic companies. In the 1970s and 1980s, there was pressure from Norwegian companies that wanted our government to co-finance their internationalisation as a passive co-owner of their foreign investments. There was also a great deal of interest in using oil money to stimulate the building of a financial centre in Oslo. It was important that we avoided doing so, though. These days, companies have access to capital in national and international markets and do not need to be supported by the Norwegian Government. There used to be a great deal of discussion on this matter, but it is accepted nowadays.

The oil fund can mostly only invest in public markets. To some extent, it can also invest directly in wind energy internationally, but not domestically. However, that is only a small part of the fund. The fund's main purpose is to maximise the real return on investments based on a clear approach to risks and politicians are not directing it towards special purposes.