The net salary scheme
The government implemented the so-called net salary scheme (Norwegian: nettolønnsordningen) in 2017 as an incentive to strengthen the competitiveness of the Norwegian maritime industry.
The net salary scheme consists of several incentives. The incentive most relevant for Odfjell is the removal of tax and other fees for Norwegian seafarers working on ships registered in NIS (the Norwegian International Ship Register). Although Norway still has a high-cost level overall, the cost competitiveness between Norway and other countries are significantly improved by these measures.
The government's expressed target was to create jobs, uphold the maritime industry's expertise, and secure that the historically strong industry is kept vital in an increasingly competitive international market. The scheme therefore also includes incentives for cadetship programs, to encourage recruitment and competence development.
When activated in 2017, the incentive had an immediate effect. One example is Odfjell's cadetship program.
Odfjell is one of the largest contributors to the cadetship program in Norway, a priority that first and foremost has to do with developing industry competence. "Of the last 300 Norwegian cadets we have enrolled, many have continued their career within Odfjell, onboard and ashore. But as we have not had the opportunity to hire all, many work elsewhere and contribute with their competence in a wide range of maritime segments: offshore, aquaculture, pilotage, local ferries, coastal administration, suppliers, etc.", Fotland said.
"The competence that Odfjell offers is highly sought after, so we consciously 'overproduce' to secure the competence Odfjell needs today and in the future, but also to do our part as a responsible company and contribute to a thriving maritime industry as a whole."
"I've never seen a political incentive that worked so well," COO Harald Fotland continues. "Since 2017, Norway has more mariners at sea, more employees in the industry ashore, more cadets and apprentices, a higher number of students applying to the maritime educations, and more ships sailing the Norwegian flag."
So when the same government suddenly suggested dropping the entire scheme in their budget proposal just three years later, it came as a complete and unsuspected surprise for everyone.
"I'm speechless," Fotland told a Norwegian newspaper. A broad industry unanimously reacted. Within hours, everyone joined forces to fight for the scheme's continuation.
Fortunately, Fotland quickly regained his ability to speak, and embarked on a solid lobbying round together with supporting partners from cluster organization Maritime Bergen, the Norwegian Shipowners' Association and other maritime resources. They held several meetings with politicians from the government and from opposing parties, explaining the positive effects the scheme has had. The reactions to the government's proposal got solid coverage in national and regional media – and (naturally) wall-to-wall in the many maritime news sites.
After weeks of intense lobbying and negotiations running on overtime, the government's budget for 2021 was signed and sealed – with the net salary scheme not only secured, but further strengthened.
"This political win was achieved thanks to the joint and solid efforts of a broad maritime cluster, where everyone was working towards the same goal. We also owe a great thanks to the opposing party FRP and the politicians from the government coalition that supported this crucial incentive. The continuance of the net salary scheme is a solid positive in an otherwise challenging year, and it gives a strong foundation for a thriving Norwegian maritime cluster in 2021 and onwards."
Harald Fotland, COO
