Prime Minister Per Dalsgaard's decision to pull both the National Labour Party and the Kazulian Kingdom at-large back towards
social democracy is about to undergo its first of many difficult tests. Minister of Finance Dr Elis Palmcrantz unveiled the
government's social democratic budget in the Stortinget earlier this morning, reducing defence spending by nearly 30% and using
the Government's surplus to pour billions into social welfare, health, education, infrastructure and science/technology. "This
government's approach to fiscal policy is ensuring that Kazulia remains a highly competitive society and a place where persons
would want to start a life." The budget comes on the backdrop of the Zardic Institute for International Relation's downranking of
Kazulia's economy. According to the Kazulsk Bank report, austerity under successive governments had paved the way for the
reduction in growth in the Kazulian economy. It noted that the policies enacted by previous Finance Minister and Deputy Prime
Minister Karoline Bejefford, although prudent, her austerity campaign which saw spending being cut in critical areas such as
healthcare and social welfare proved to be detrimental. Dr Palmcrantz states that his budget intends on laying the foundation for
the complete transformation of the Kazulian economy by implementing long-term, high-impact policies aimed at improving the
quality of living. A staunch social democrat himself, Dr Palmcrantz believes that it is the government's duty to focus on
long-term, high impact economic measures (along the lines of a social-democratic programme) instead of focusing on short-term
economic policies. In outlining the priorities for the government in the coming fiscal years, Dr Palmcrantz noted: reducing
defence spending, supporting the complete diversification of the Kazulian economy away from oil and natural revenues, promoting a
highly-educated and highly-skilled population, improving healthcare and social care standards, enabling the growth of the states
and increasing the standards of living of refugees, immigrants and minorities. In recognising the inefficiencies in spending
among the government departments, Dr Palmcrantz stated that he had been working with the budget departments of all the government
departments, statutory bodies and state-owned companies in ensuring that wastage is cut by nearly 50% across the board. He noted
that although the government has maintained a sizeable, albeit significantly reduced surplus, it will be focused on reducing
wastage in the government to ensure that the surplus can grow in the coming years.
In speaking on the government's budgetary shortfalls in the future, Palmcrantz stated that he intends on amending the law which
addresses the Critical Investment and Stabilisation Fund (CISF). He noted that previous governments commissioned studies into
reforming the CISF to ensure greater efficiency and better use of the world's largest sovereign wealth fund. A Green Paper
commissioned by the previous Rasmussen Government recommended that the Critical Investment and Stabilisation Fund be divided into
two separate entities; one with the purpose of being used to address budget shortfalls and fiscal deficits and the other for the
future generations. Palmcrantz stated that he intends on executing the recommendations of the green paper and intends on forming
the Federal Stabilisation Fund (FSF) and the Future Investment Fund (FDF) which both sovereign funds to be managed by Kazulsk
Bank. On the government's surplus, in his presentation in the Stortinget, Palmcrantz stated that the surplus had fallen from 256
billion to 56 billion (a 78% decrease) due to increased spending. Whilst the surplus fall by 78%, spending increased by 16% from
626 billion Krona the previous year to 730 Billion krona. Traditionally, the expenditure profile of previous governments saw
defence taking the large percentile of the pie, however, Dr Palmcrantz new budget cuts defence spending by 25% and saw
Education/Culture, Health/Social Services and Science/Technology increased by 20%, 10% and 125% respectively. With defence
spending cut by 25%, Minister of Defence Herse Malmkvist stated that the Department of Defence had to undergo a major
transformation. He noted that the Department of Defence would oversee the decommissioning of Kazulia's aircraft carriers and the
withdrawal of troops from overseas bases. He stated that the government had ordered that the Kazulian Armed Forces would
transform itself into the Kazulian Defence Force and would take up a total defence role. This is a reverting of Kazulia's foreign
policy, which existed along similar lines under the stewardship of Foreign Affairs Minister Ellinor Ketelsen. Whilst the Kazulian
Armed Forces would be reduced both in size and range, Malmkvist stated that the new Defence Force would remain extremely capable.
Apart from carriers, Malmkvist stated that the government would also seek to reduce the number of combatant vessels underneath
the Kazulian Navy. He said that he wanted to aim for a cost-effective, nimble and effective defence force.
Minister of Foreign Affairs, Kasper Busk stated that the increase in expenditure by the Foreign Affairs Department comes amidst
the dawn of a new sub-department and portfolio within the Department of Foreign Affairs. The Department for International
Development was established by Prime Minister Dalsgaard to ensure that the Kingdom of Kazulia remained committed to the promise
of development in the region. Amanda Bergmann has been tapped to hold the portfolio of Minister for International Development.
Under this new department, the Kazulian Developmental Assistance Agency (KDAA) would be overseen. Amanda Bergmann is the former
Director-General of the United Developmental Assistance Programme (UDAP), a non-profit humanitarian assistance organisation
founded by Bernhart Hofmeister and Hendrik Gardarsson. On the increase in Science and Technology, Minister Palmcrantz alongside
Minister of Science and Technology Arthur Thomassen stated that the Kingdom of Kazulia would undergo a major shift towards
embracing information technology. He also noted that with SEED restarting the Arcadia Programme, the Kazulian Government had to
ensure that funds remain committed to the programme albeit it with greater efficiency amidst a smaller budget than requested.
Palmcrantz stated that he intends on laying the estimates in the Stortinget in the coming days for parliamentarians to
scrutinise.